My LC portfolio value finally reached $10,000 a couple of weeks ago which prompted me to discontinue future contributions for now. I plan on letting things ride for a while and may continue building up my loan balances in a few months.
In the mean time, I do plan on reinvesting all the interest payments I receive.
I have been investing $25 at a time and now have 492 notes up from 421 notes last report. I am continuing to use the automated note selecting mechanism which lets the computer spread the capital across a variety different loan grades.
Right now as you can see above, my current return is 5.50% after all defaults and past due loans have been written down.This is a significant drop from previous months. Obviously this happens when defaults start to rise and hopefully this is a temporary phenomenon. I would like to hope that the Christmas holidays are partially to blame as families can become pretty strapped this time of the year.
Also, my monthly payments have increased to approximately $384.
2016 Net Annualized Returns
July --- 6.77%
August --- 6.33%
September --- 6.65%
October --- 6.76%
December --- 5.50%
DEFY MEDIOCRITY
I've been wanting to try this but I've never really seen actual returns before. I think I'll put $10k in and see what happens. Thanks for sharing.
ReplyDeleteIH,
DeleteYou definitely have no fear when it comes to new investing ideas. This is just one bullet in my passive income revolver.
MDP
Hopefully some of your late notes start paying again. It is still good that your are still making money.
ReplyDeleteDividendMonkey,
DeleteSo far the delinquencies have been fairly consistent over the past year and I have had less that 5 defaults. Like dividend investing, diversification is key and having almost 500 small loans provides some stabilization.
MDP
MDP -
ReplyDeleteStill solid; but on an after-tax basis, would you say you are in the 4-5% range?
How often do you find yourself checking your accounts or are you looking at it once per week, etc. etc.?
Thanks MDP, solid, but if the mid to low 5% range continues, I would say it's worth investigating into!
-Lanny
Lanny,
DeleteYou are correct about the after tax return. It's definitely not the most tax efficient investment vehicle while in a high income tax bracket. I hope that the return stays above 6% and reaches 7% over time. By the way, I typically check the account a couple of times each week.
I love the idea of passive income regardless of how it originates. This is just one additional way to create some passive income and I want to over time have a multiple diverse streams of cash coming at me each month. :-)
MDP
Thanks for sharing, I have a similar experiment going and am building up to $10,000. My weighted average is around 22% so I think our strategies differ a little. Only time will tell which is better, but I think its a great idea to funnel cash through some of these avenues. Good luck in the coming months!
ReplyDeleteAustin
MonthlyCents.com
Austin,
DeleteYeah I was planning on having three separate LC portfolios. One with 800 credit scores only, one with a mixture of different loan grades, and then a low grade portfolio.
I decided it would probably be simpler to just create a balanced portfolio and hope for a 7% net return. I'll look at how things go and may tweak things a bit next year.
MDP