wanaberetiree
Full time employment: Posting here.
- Joined
- Apr 20, 2010
- Messages
- 718
Does anybody have experience with peer-to-peer investing?
Good/bad idea?
Thx
Good/bad idea?
Thx
Is peer-to-peer investing something like lending money to people?Does anybody have experience with peer-to-peer investing?
Good/bad idea?
Thx
When you say it that way, it sounds like a bad idea...Is peer-to-peer investing something like lending money to people?
I have been using Lending Club for the past 12 months and have had good results with it. YMMV.
I do some research on each loan and I have very strict selection criteria. I have not had a single default or late payment yet. My net annualized return has been about 10.9%.
Despite this relative success, I will probably close my account in the next year or so. For one thing, it is getting harder to find loans that meet my strict selection criteria. It is also a lot of work to constantly search for new loans to reinvest the cash (a requirement if you want to keep the returns high).
Personally, I will reinvest the money in VWEHX and let Vanguard do the work.
Not judging, just asking for clarification. Subsequent comments indicate this is direct lending, not investing.When you say it that way, it sounds like a bad idea...
I've lent 55k-ish on Prosper. Would not do again. Last loan was made in '08 or so. I was an early adopter from launch in Feb 06 and very active on their forums. They did enough to irritate their lenders that I don't trust them as a company. LendingClub may be better, but I've mostly soured on the idea of p2p lending as a whole. Better risk/reward places to invest, IMO.
clifp said:I was also an early lender on Prosper (July 06) fortunately I limited my exposure to a $3,000. I lost 16% which is probably about the same as than I would have done if I left in the stock market in 2006-2008.
By all accounts Lending Tree has a better business model, and both Prosper and Lending Tree have got smarter about who they lend money to. Still fundamentally the concept is that we the average Joe can do a better job loaning money than the banks. A somewhat dubious proposition made doubly so by the observation that banking is a terrifically profitable business until it isn't. As a group banks have lost of a ton of money lending over the last few years, and would have lost even more except for being able to borrow money from the Fed at near 0% rates.
@travelover: Ditto, I've loaned out $200 over and over but haven't lost anything yet.
But KIVA are a bit sneaky, as they keep asking for a donation whenever you reloan $25. So if you keep accepting the 15% donation default in the popup, eventually your $200 will be severely depleted. ........
I have done the same as you, I have just over 12% return, no defaults, but I am slowly cashing out as loans get paid off. As you said the selection of outgoing loans have dropped in quality and quantity.