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I have about $50K to initially invest in the P2P lending space. From reading the threads here many people agree that LC is more secure than Harmoney (all loans have either vehicle or house as security) so I am starting off with LC. I also know about the SquirrelMoney LoanShield and most people seem to say that is "most secure"? I will probably try both LC and SM and avoid Harmoney.
My biggest question is how much out of the $50K would you recommend I invest into each loan? Obviously diversification is better, but I also don't want money sitting there doing nothing while I wait for loans to come in. From what I gather it could take a while for all the $50K to be invested. In the Harmoney thread people are investing from $100 to $400 into each loan but it looks like that would take months to be fully invested on the other 2 platforms.
Also many here seem to say that they ignore the A loans on LC (eg the current loan L00-13-072 at 8.95% which I see has been available for a day or so now (seemingly much more time that other loans) and for that interest rate, would prefer SM) - is that correct? It sounds like Bs are the sweet spot on LC?
Thanks everyone
Last edited by Entrep; 16-05-2017 at 08:25 AM.
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Originally Posted by Entrep
From what I gather it could take a while for all the $50K to be invested. In the Harmoney thread people are investing from $100 to $400 into each loan but it looks like that would take months to be fully invested on the other 2 platforms.
Also many here seem to say that they ignore the A loans on LC (eg the current loan L00-13-072 at 8.95% which I see has been available for a day or so now (seemingly much more time that other loans) and for that interest rate, would prefer SM) - is that correct? It sounds like Bs are the sweet spot on LC?
Thanks everyone
Hi Entrep, with the SM platform you can just invest it in a lump sum as the reserve fund (loan shield) provides the full diversification benefit. No need to spread it over loans and you can't choose loans anyway. We currently have $50k available right now, so you'd be able to invest it in a day. Or you could put it in progressively in amounts of $10k and kust see how it goes.
There is about $1m going through the platform per month now and we have no institutional investors or banks, just retail investors so you wont get crowded out.
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Originally Posted by JB@Squirrel
Hi Entrep, with the SM platform you can just invest it in a lump sum as the reserve fund (loan shield) provides the full diversification benefit. No need to spread it over loans and you can't choose loans anyway. We currently have $50k available right now, so you'd be able to invest it in a day. Or you could put it in progressively in amounts of $10k and kust see how it goes.
There is about $1m going through the platform per month now and we have no institutional investors or banks, just retail investors so you wont get crowded out.
Thanks, when you say "the reserve fund (loan shield) provides the full diversification benefit" you mean by way of socialising losses from any loans right? But strictly speaking, my lump sum would not be diversified as it would be all lumped into one big loan, and I would have to rely 100% on loan shield versus a more thorough loan diversification strategy of investing in several loans (plus have Loan Shield on all of them obviously).
What do you mean you can't choose loans? That I can't see specifics of loans? I believe I could still choose/diversify by creating 5 x $10K orders for example?
I have uploaded all the docs and am waiting for verification BTW.
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Originally Posted by Entrep
Thanks, when you say "the reserve fund (loan shield) provides the full diversification benefit" you mean by way of socialising losses from any loans right? But strictly speaking, my lump sum would not be diversified as it would be all lumped into one big loan, and I would have to rely 100% on loan shield versus a more thorough loan diversification strategy of investing in several loans (plus have Loan Shield on all of them obviously).
What do you mean you can't choose loans? That I can't see specifics of loans? I believe I could still choose/diversify by creating 5 x $10K orders for example?
I have uploaded all the docs and am waiting for verification BTW.
@ entrep >> When you invest in SM you have no control over how your lending funding is invested.
So say your 10K lump sum may go in 20 x $500 individual customer loans or make up just a part of a 1 x 50K loan to just one customer.
Last edited by Saamee; 16-05-2017 at 01:13 PM.
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Originally Posted by Saamee
When you invest in SM you have no control over how your lending funding is invested.
So say your 10K lump sum may go in 20 x $500 individual customer loans or make up just a part of a 1 x 50K loan to just one customer.
Thanks I see now. So if I have $50K to invest then I should just create an investment order for that amount with the particulars (length and interest rate) that I want and that's it? Then I just wait for the loans to be taken out and my money to start working?
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Originally Posted by Entrep
Thanks I see now. So if I have $50K to invest then I should just create an investment order for that amount with the particulars (length and interest rate) that I want and that's it? Then I just wait for the loans to be taken out and my money to start working?
Exactly
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Originally Posted by Entrep
Thanks I see now. So if I have $50K to invest then I should just create an investment order for that amount with the particulars (length and interest rate) that I want and that's it? Then I just wait for the loans to be taken out and my money to start working?
You can expect somewhere between 20% to 50% of your Loans being early repaid every year - It varies from one lender to another with Harmoney being the highest @ 50% and LC @ 30%. ( my own figures )
Last edited by Saamee; 16-05-2017 at 03:16 PM.
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Originally Posted by Entrep
Thanks, when you say "the reserve fund (loan shield) provides the full diversification benefit" you mean by way of socialising losses from any loans right? But strictly speaking, my lump sum would not be diversified as it would be all lumped into one big loan, and I would have to rely 100% on loan shield versus a more thorough loan diversification strategy of investing in several loans (plus have Loan Shield on all of them obviously).
What do you mean you can't choose loans? That I can't see specifics of loans? I believe I could still choose/diversify by creating 5 x $10K orders for example?
I have uploaded all the docs and am waiting for verification BTW.
This SM website is worth checking in with everyday!! Loan Shield Value
>> https://www.squirrelmoney.co.nz/look...er-your-money/ <<
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