Lending Club Investing: Good Passive Income Source? (Answer: NO)

[MJ DeMarco]

just couldn't justify the time spent

Huh? How do you know how much time I spent? I think since I started I've spent maybe 90 minutes TOTAL. I don't think 90 minutes is a waste of time to find out how to deploy capital earning 0% into capital earning 10%. And yes, what I'm learning now will transcend into larger amounts by adding notes, not by increasing the amount loaned.

Anyhow my daily investment is about 45 seconds a day-- in reality I spent more time answering your post than I have spent at LC in the last two weeks.

Duh.

I'd much rather be reading about you doing the next *amazing* business thing

I guess you didn't get the memo that I retired. I'm not interested in the "next amazing business thing" or being some guru talking about the "next amazing business thing" -- I'm interested in staying retired, investing, and promoting entrepreneurship-- the very thing that allowed me to retire 3 decades early.

Not you sitting at home chasing 9.5% by lending to Joe Broke in Oklahoma.

And I love it...

Sitting at home...

Because I can. @Vigilante

In any event, sorry that I have failed at satisfying your guru expectations.

 

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[Ikke]

I have looked at Bondora, Twino and Mintos here in Europe. I choose for Mintos for several reasons, the most important being:
#1 Mintos is a lending platform and not a lending agency. This means loans are issued by (long standing) lending companies whos core business is doing credit checks on clients.
#2 The loans are funded by the lending companies.
#3 You make the lending agreement with the lending company, who hold the collateral.
#4 Mintos has a third party bank account for investor money only.
#5 Some lending companies offer a buyback guarantee on their loans which gives us the lenders an extra shell of protection.

After 5 months all loans have paid and those that have defaulted were bought back exactly when 60 days overdue. Interest was also paid during the overdue period.

I have invested very small amounts (<€1,00) in a few loans with collateral but without buyback guarantee to see what happens if such a loan defaults.

 

[Vigilante]

Huh? How do you know how much time I spent? I think since I started I've spent maybe 90 minutes TOTAL. I don't think 90 minutes is a waste of time to find out how to deploy capital earning 0% into capital earning 10%. And yes, what I'm learning now will transcend into larger amounts by adding notes, not by increasing the amount loaned.

Anyhow my daily investment is about 45 seconds a day-- in reality I spent more time answering your post than I have spent at LC in the last two weeks.

Duh.



I guess you didn't get the memo that I retired. I'm not interested in the "next amazing business thing" or being some guru talking about the "next amazing business thing" -- I'm interested in staying retired, investing, and promoting entrepreneurship-- the very thing that allowed me to retire 3 decades early.



And I love it...

Sitting at home...

Because I can. @Vigilante

In any event, sorry that I have failed at satisfying your guru expectations.

You're not a good guru. You're supposed to be creating a sales funnel.

Stop trying to teach us new stuff you are learning. Do you think Tai Lopez is worried about this shit?

By the way, here is my office this afternoon. Hope @LightHouse doesn't see this. I think I made a bad decision. I AM working, though. I'm actually writing some of the best copy here, inspired. My biggest fear was that I think I set my computer bag down in Gulf Coast Seagull shit. And, my battery is about to run out on the Chromebook. I might have to go to the office in a bit.

Carry on with your lesson. Many of us are listening.

 

[Vigilante]

I think of you as going to mixers and meetings and networking with the next wave of internet professionals, hustlers, grinders.... the people working to make the next awesome internet things....

Shit I would PAY to watch that show. Perhaps I could arrange you and Tim Ferriss and Tai Lopez and RK to all meet, and I could sell tickets.

INE.

 

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[GlobalWealth]

Huh? How do you know how much time I spent? I think since I started I've spent maybe 90 minutes TOTAL. I don't think 90 minutes is a waste of time to find out how to deploy capital earning 0% into capital earning 10%. And yes, what I'm learning now will transcend into larger amounts by adding notes, not by increasing the amount loaned.

Anyhow my daily investment is about 45 seconds a day-- in reality I spent more time answering your post than I have spent at LC in the last two weeks.

Duh.



I guess you didn't get the memo that I retired. I'm not interested in the "next amazing business thing" or being some guru talking about the "next amazing business thing" -- I'm interested in staying retired, investing, and promoting entrepreneurship-- the very thing that allowed me to retire 3 decades early.



And I love it...

Sitting at home...

Because I can. @Vigilante

In any event, sorry that I have failed at satisfying your guru expectations.

When I read that reply I was just waiting for you to respond MJ. This was highly amusing. Muchos gracias.

Sent from my SM-G900FD using Tapatalk

 

[Runum]

I wasn't specifically asking you MJ, but since you responded

Listen, I still think it makes little sense. I don't believe the dynamics of you learning a $25-$50 loan are going to carry over to a $1000-$5000 loan on a P2P site. (yes, I understand we aren't discussing the total loan amount, but just your portion).

The guy looking to borrow $500 to pay for some medical bill is a different debtor than the person wanting $50k to remodel their rental.
They are different customers with unique backgrounds and goals - and I'm not sure the small scale investments teach you about the bigger ones.
Now, it's been at least a year since I poured into any of this myself, so, maybe the game has changed....

Maybe my more simple point is - I guess as wealth preservation, on a large scale at $100k+, sure, it's better than the bank, and it's probably a bit more fun than truly passive income. I get that.

But, I looked at it, and just couldn't justify the time spent, even if it was to learn.
By the time real capital is deployed, it's like fishing with dynamite. I just didn't see the return justifying the energy inputed. Even at 9.5%+.....

--
Also, on a much more simple note. You, MJ, are a very smart guy. You are the reason behind all of us being here.
I will be rather honest and say I'd much rather be reading about you doing the next *amazing* business thing, than you playing in P2P lending with the rest of us.

Maybe that's just giving you a hero complex, and I shouldn't do that, but, I think a lot of us look up to you, and what you've done.
It motivates us (me at least).

I think of you as going to mixers and meetings and networking with the next wave of internet professionals, hustlers, grinders.... the people working to make the next awesome internet things....

Not you sitting at home chasing 9.5% by lending to Joe Broke in Oklahoma.
You're amazing and you're an inspiration, maybe this thread is one of the first that doesn't inspire me (well, that float tank one was pretty weird too...) - and that's coming off here.

I just hope you're out crushing it today, keeping the beacon shining strong for the rest of us trying to emulate what you did.

This was a lesson I had to learn from @MJ DeMarco @RussH @SteveO and others in a book study we did many years ago. There are financial seasons in life.

There is a time to go go go and there is a time to work to preserve wealth. I believe the young guys and beginners are full of push to the limit, nothing wrong with that.

I also think that as you grow and become more successful you have more to protect. These guys have shown me several ways to preserve wealth for that time of life.

 

[WestCoast]

Guess I misunderstood then, thought you were still hustling each day.

 

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[Bananas]

My additional money deposited to LC today and BV is already picking up notes for me. Come September, my first notes will be at their 1 year mark. At that time, I should have enough experience and information to determine if I want to invest more in P2P or not, where I want to drop my IRA contribution for 2016, and whether or not I want to open a second, regular account with bigger money.

 

[LeDV03]

I started investing with LC for a little over a month now. I checked my Net annualized Return and it was up at 15.86% then a few days after that it dropped down to 1.81%. Anyone else experienced this?

 

[Daytraderz]

Mj, not specific to Lending Club, I'm working on a Peer 2 Peer lending project with a couple of friends. From our research however, we're seeing this to be a very profitable business. I can send you an interesting article privately on p2p lending, and they touch upon LC and Prosper - if you're interested.

could you send me this article as well?

 

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[Captain Jack]

I have been investing with Lending Club for about a year now. I've included my current statistics to date.

I was not fully invested until about 2 months ago.

 

[GuestUser140]

Would you invest more?

11% is nice, but $500 doesn't buy you an awful lot these days...

 

[Captain Jack]

Would you invest more?

11% is nice, but $500 doesn't buy you an awful lot these days...

Well, my actual return thus far, based on those numbers, is $344 since a few notes defaulted or are late. This number, however, is not an accurate reflection of the amount of money invested since I invested slowly throughout the year.

I think that this is a great investment strategy, but, like MJ said, it's speculative. I wouldn't feel comfortable investing significant savings into this one platform.

With that said, I'm seriously considering opening up accounts on other P2P sites. I'm looking at Prosper right now. I figure if one goes under (which is unlikely, but possible), then I'll be adequately diversified so that I don't take a major hit.

So to answer your question, yes, I would invest more, but I would spread my investments throughout multiple platforms.

 

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[DaveC]

Well, my actual return thus far, based on those numbers, is $344 since a few notes defaulted or are late. This number, however, is not an accurate reflection of the amount of money invested since I invested slowly throughout the year.

I think that this is a great investment strategy, but, like MJ said, it's speculative. I wouldn't feel comfortable investing significant savings into this one platform.

With that said, I'm seriously considering opening up accounts on other P2P sites. I'm looking at Prosper right now. I figure if one goes under (which is unlikely, but possible), then I'll be adequately diversified so that I don't take a major hit.

So to answer your question, yes, I would invest more, but I would spread my investments throughout multiple platforms.

11% is what I am at since 2009 with prosper....that's nothing to sneeze at IMO and is better than several other investment classes, especially since there's some liquidity with trading notes now.

 

[SEBASTlAN]

I would personally invest in the "D" range - what about you guys?

 

[Captain Jack]

I would personally invest in the "D" range - what about you guys?

The vast majority of my notes are Grade E.

 

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[MJ DeMarco]

My account is nearing a 10% return -- so far it seems to be a decent passive income source, picking up a few bucks freely without any time investment.

11% is nice, but $500 doesn't buy you an awful lot these days...

If I give you $500 for breathing, are you going to refuse and say, "Meh, that doesn't buy a lot."

 

[Mineralogic]

My account is nearing a 10% return -- so far it seems to be a decent passive income source, picking up a few bucks freely without any time investment.



If I give you $500 for breathing, are you going to refuse and say, "Meh, that doesn't buy a lot."

I was near 14%...just got hit with a loan already late 3 months in. WOW, now i'm not as positive on this vehicle especially with markets acting like they are

 

[GlobalWealth]

I use 2 platforms in Europe. Both have buyback guarantees for past due loans and guaranteed by the loan originator.

I have had a few default and every one was bought back with interest. One platform averages around 10%. The other around 12%.

Sent from my SM-G900FD using Tapatalk

 

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[Runum]

Ceo resigned today. Article in usa today. I am on cell and can't get link.

 

[MJ DeMarco]

can't get link.

http://www.marketwatch.com/story/le...rutiny-of-the-peer-to-peer-lending-2016-05-09

And this is why I refuse to allocate big dollars to, what I still call, a startup.

 

[Captain Jack]

Ceo resigned today. Article in usa today. I am on cell and can't get link.

http://www.wsj.com/articles/lendingclub-ceo-resigns-over-sales-review-1462795070

Based on this article, it seems like LC had sold loans to a big investor in which the borrowers had a lower credit score than advertised. Also, they had extended the due dates on these loans to give the appearance of compliance.

Obviously, this is an issue. Where there's smoke, there's fire. If they were caught this time, they likely did it multiple times in the past without being caught.

Like MJ (wisely) said previously, this is speculative money in an unproven niche. It's a good lesson in diversification. I've paused my automatic investing at this point and will just ride out the rest of the loans that I'm invested in.

 

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[Runum]

Thanks for the link guys.

It reads like the freaking amateur hour. After 2008 debacle and the passage of peer to peer lending didn't they think that this crap would be uncovered? Maybe more crap to come out in the near future?

 

[Captain Jack]

Thanks for the link guys.

It reads like the freaking amateur hour. After 2008 debacle and the passage of peer to peer lending didn't they think that this crap would be uncovered? Maybe more crap to come out in the near future?

At least the board of directors cut it off and announced it quickly (at earnings time, no less). But you're right. Who knows what will happen. It's surprising that the founder of this company would do something that could potentially destroy it (as opposed to a non-founding CEO, who has much less blood, sweat, and tears in the company). That is also not promising.

 

[Runum]

And cue the ambulance chaser.

http://finance.yahoo.com/news/important-investor-notice-lundin-law-220300344.html

And the Treasury is calling for more oversight.

http://www.marketwatch.com/story/tr...ersight-of-online-lending-industry-2016-05-10

 

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[vinylawesome]

"More money has been lost reaching for yield than at the point of a gun."

- Ray DeVoe

 

[Captain Jack]

And cue the ambulance chaser.

http://finance.yahoo.com/news/important-investor-notice-lundin-law-220300344.html

And the Treasury is calling for more oversight.

http://www.marketwatch.com/story/tr...ersight-of-online-lending-industry-2016-05-10

That guy really messed up. With all of the recent scrutiny on lenders, he pulls a stunt like this for (what is to him) a few extra dollars.

These greedy CEOs kill me. They really do.

He's destroying everything he built.

 

[Runum]

It's getting worse.

http://www.wsj.com/articles/lendingclubs-ties-to-fund-under-fire-1463011193

http://finance.yahoo.com/news/ryan-maniskas-llp-announces-investigation-231500272.html

 

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[IceCreamAction]

Where money talks, bullshit walks.
Greed has no prejudice.

Given LC's recent news curious if you guys ever saw /checked out Lendinvest, been on their newsletter for curiousity but curious to anyone on the other side of the pond who's heard of them. Or this side.

 

[Mineralogic]

amazing huh guys..a new avenue/tool is offered to us outside the regular banking system. You take action with some money/investment...and same ole corrupt wall st shit happens. unreal