From my total $1000 investment, if I began cashing out now, I’d realize approximately $5000 in profit since I started. Of course it would take me years to cash out.
I haven’t invested additional funds in years. Now that direct investing has been approved in my state, I no longer have to muck around in Foliofn and have settled pretty well into automated investing. I currently have no plans to change this. I think I will let things ride for another 5 years or so and see where I am then.
Not getting rich from this, but with more than 300 active loans, I am certainly reinvesting quite a bit and an increasing amount of cash each month.
I bow to you! What is your strategy? I have invested $5150 and have an outstanding principal of $6050 (344 notes) so I’m only up $900 over the many years.
I really don’t have a strategy, or if I do it has changed so frequently as to not be one for practical purposes.
For almost five years I couldn’t invest directly with Lending Club because of the restriction in my state so my only option was to purchase discarded notes from others on Foliofn. Someone in this thread gave me the idea of selling the notes I purchased almost immediately so I started doing that and was able to sell quite a few of them before I received a single payment, and at a profit. This was an awful lot of work but it was profitable.
Recently, I realized my heart really wasn’t into the amount of work required to keep on top of every single note. Around the same time, investing in Lending Club directly opened up in my state. I initially tried automated investing, but didn’t like it as the amount of uninvested available cash in my account seemed to be increasing (which I complained about here), but after a suggestion from someone here and few weeks of watching, it began to make sense what was happening and so I made adjustments to my class thresholds and it has been pretty good since then. Now, I fluctuate daily somewhere between $15 and $50 in available cash, and typically have approximately $25 in committed cash, although I have seen it at $50 from time to time.
I don’t have the patience to keep on top of my LC account on a daily basis so at this point I am just letting things ride. My net annualized return rate fluctuates from around 5.5% to up to 8% at times with the dips occurring during periods of high charge-offs, which I have stopped freaking out over. I am making money and that is good enough for me.
I don’t get it then: My net annualized return has been in the 9-10% range. If you go to the account details section, what is your deposits (mine is 5150 - no relation to VH) and outstanding principal (mine is 6050 with another $60 in available and committed)? How have I been so unlucky to make so little?
Ah. I see where our disconnect is. We are looking at different data. My total deposit is: $1,000.
Instead of outstanding principal, I was looking at total payments, which is: $6,286.85. I currently have $24.75 in available cash, $75 in committed cash, and 327 active notes.
I haven’t gone back to Foliofn since direct LC investing opened in my state. It was way too much work, even though I had more control there and could invest in a note for as little as $1 if I wanted.
Another month of high charge offs. I lost 1.38% of my portfolio to charge offs in November, which is the highest since I started tracking (from beginning 2015). This exceeded my interest received, so I made a loss. Quicken reports gains over the last 12 months to be 3.44% whereas LC is reporting returns of 6.44% Annualized returns over the last quarter were a mere 1.24% After interest rates rise this month, you may well be able to get that in a totally safe savings account.
I have been able to withdraw one third of my money since I started my exit in June.
Is that (5 months to sell 1/3) just because they aren’t selling? Out of curiousity what kind of markup or discount are you typically setting?
I’ve had two chargeoffs this year, both Chapter 7 bankruptcies. 2 more are 30+ days late and another one is in grace period - must make a note to try to sell that last one if it comes current again (the 30+ days late ones would have to go for a big discount to get rid of them - maybe worth it).
I definitely don’t follow it NEARLY as closely as I used to, since I set up the automated investing. I’m averaging 30ish a month, though the two chargeoffs and two impending ones do, as you note, take a big chunk out of it. I’m much smaller potatoes than you ever were though - my balance is barely over 3,000.
I have not attempted to sell any. I am getting about $1,000 a month just from interest payments, so I am just pulling cash out. I might try selling some when the cash slows to a dribble. As I only invested in 3 year notes, worst case is it will take another 2.5 years to cash out completely.
I am not going to keep posting these every month, but I thought I would publish the annual position. After losing 1.29% of my portfolio to charge offs last month (second highest ever, after the previous month) my position on the year was an average loss of 0.98% per month, versus 0.51% in 2015.
Lending Club reports my net annualized gains as 6.19% Quicken reports it as 2.95%
I have been largely ignoring the LC since I set it on auto-invest. So I don’t routinely d&d (discount and dump) loans that are acting like they’ll become troubled. And unless they’ve changed, LC’s downloads don’t make it easy to identify which loans have ever had a late payment or have dropping credit scores or whatever - you have to look at each one individually.
So right now I have 159 current loans, 1 in process, 117 paid off, 1 15-30 days late, and 3 31-120 days late. Plus 6 loans charged off. Three of those were in 2016, the others were in 2015, 2011 and 2010. Clearly my chargeoffs have increased since I’ve gone to auto-investing; while my total loans have certainly increased over the years, it’s not by that much as I’ve added very little cash in any given year (and none in the past year).
Looking at one that was charged off in March, the last payment activity was the previous September, and the last logged collections activity was November. So either they aren’t bothering to do collections or they aren’t posting the activity.
I put in a total of just under 1900 dollars over the past 7 years, and it’s grown to just over 3,000. Mostly C-class, then B, some D, a very few A and E, and a tiny percentage of F and G (like one each). I’m pulling in 30ish dollars per month in interest, so about 1% per month. The next month or two will have that wholly offset by the expected chargeoffs, of course.
Supposedly my combined returns are just over 10 percent (includes sold notes as well as primary). So, not too bad though I’ll have to compare the annualized figures for the past few years. I don’t keep detailed enough records to make Quicken really do the calculations, and haven’t even been doing the monthly bought / sold / interest totals in quite a while. I should update that to see how Quicken’s return rate compares to Lending Club’s.
All in all it’s been a fun and slightly profitable experiment. Dunno if I’d get into it right now, but I don’t regret doing so in 2009. We don’t have the spare cash to invest to make the profits notable, as 1,100 (my total profit over 7 years) is really just chump change in the long run.
I decided to see if I could sell my E/F/G class loans at a markup. While looking around at the notes for sale, I spotted a large number with 15% markups. I have to guess that there are sellers there that routinely do that just in case someone is dumb enough to bite. For example one with 17.57 interest rate and a dropping credit score - the buyer’s yield would only be 2%. Crazy. Of course, in the early days I sold some older notes for MORE than the total of their remaining payments which was even crazier. (FolioFn won’t let you do that now).
Update: charge-offs have exceeded income for each of the last 3 months. LC reports my annualized gains as 5.85% Quicken reports it as 0.48% over the last 12 months. I have got over 60% of my investment out of there now.
After 4+ years, I’m getting out as well. Not buying any more notes, letting them just “naturally” expire by being paid off or defaulting.
LC saw what I was doing and reached out to me, I just told them I didn’t like what I was seeing (increasing defaults), paying (I have to go through Folio platform because LC can’t work directly in my state), and I think their agenda and actions are often at cross-purposes with individual investors (crazy fees, weak underwriting, flaccid recovery practices, opaque reporting).
In hindsight, the tax implications were also bad for me - should have done this in a tax-advantaged account. If at all. My 7.4% LC “real” return sucked a$$ when I otherwise would have put it in with my regular portfolio. (The one saving grace was that I got in on the LC IP and flipped my initial shares for $24 before it imploded!)
Anyway, I’m hoping the P2P lending market holds out - at least until I’m fully divested.
I’m debating doing the same. I’ve had 6 chargeoffs this year (this is on a fairly small portfolio worth about 3,000 dollars total). Abother 7 are in some flavor of late (6 are 30+ days late). Oh yeah: they’ve also made it much harder to find the link to FolioFn - used to be a link to the trading platform right on the main page.
I have a little over 400 notes now ($7200) and I continually have 4-5 going south (I invest mainly in C’s). I think that’s just the price of doing business once you get enough. I’m still making money and those become a tax write-off to offset the interest (not that I wouldn’t rather just have all the notes stay current and pay off).
I’m more concerned about the overall health of LC. Are there indications that the platform is in trouble? Are there really increased numbers of defaults overall? Does LC not go after folks enough where people are learning to just stop paying with no consequences?
Anecdotally, defaults are increasing (both here and on Bogleheads, where I also post, also as amarone). In my case (I use automated investing in mostly B, C and D loans), monthly charge-offs averaged 0.51% of my portfolio per month in 2015, 0.98% in 2016 (I started to exit mid-year) and a staggering 1.48% so far in 2017. If that is a cost of doing business, then the cost is way too high for me.
I do not know the reason the defaults have increased so much. One possibility is that the corporate investors and people using computers to analyze loans snap up the best ones, leaving the dregs to the rest of us. However, if you have to work hard on this investment, it is not for me. I used automated investing because I was not prepared to put effort into researching a $25 investment.
Thanks for your insight. I stopped putting money in each month a while back so I have become more cautious. However, I haven’t seen nearly 1.5% of my notes go bad each month. No wonder you are fleeing! Is that 1.5% of the total value of the notes or 1.5% of the total count (which could be a lot higher than 1.5% of the total value)?
I only have a small amount invested - I never really jumped in so I’m not too concerned. I wouldn’t like to lose that amount but this was just a “hobby” for me.
