Some 'Of Us' already have ;-)
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LC NAR: 14.01% (no longer investing - various reasons)
HM RAR: 17.84% (now have a second account for further investing)
Everyone invests differently and makes different returns...even when people invest in the same 'grades' of loans the outcome will be very different...
On Platform 1.5 I'm 12.8% RAR after just over 4 months.
I have no trust in XIRR, so calculate my own adjusted version of RAR, which is at 11.87%:
Number of individual units ($25 blocks) months paid: 504
Number of unit months missed payment: 8
Nominal interest rate (using WA) of those units: 18.34% (includes payment protect)
Compound interest rate of those units: 19.96%
Harmoney charges (currently @20%): -4.0%
Expect defaults:
-I have 8 arrears between 1-30 days, although HM only records 1. This includes a 10 day buffer (I ignore payments 0-10 days late). Zero 31-60 days.
-Estimate the probability of default as 20% on 1-30; 70% on 31-60%; 100% 61+ days. This is applied against the outstanding sum (not the missed payment).
- Giving expected defaults of: $220 (outstanding principal on missed payments) x 20% = $44
Expect default RAR impact: - 4.1%
19.96%-4%-4.1% = Overall 11.87%
Will be interesting to see how it pans out, I've increased my risk mix (more CDEFs), so expected return on all loans with or without payments calculates to 22.7% compounded. With the likelihood of increased arrears I'm hoping my adjusted RAR can stay above 12%
Ok if you put it like that I'm calculating it the wrong way. Will try another
Download the latest statement "transaction detail". Dates in one column, cash outflows in the other, total balance at the end. Gives 11.70% If I factor in an estimate of defaults from arrears 8.2%.
Does that sound right?
Tomorrow is my 2-year anniversary in the platform. I put $75,500 in there and I keep pretty much exactly that in there, pulling out any profit to put into LC for diversification (currently at 14.1% there with no losses).
So you can compare:
2900 loans (no auto-invest)
Just over $200,000 of loans funded
$6900 written off
$163 in arrears
$46 recovered...hopefully selling the debt might improve that
$31600 interest received
14.9% at the moment (was as high as 17% about 8 months ago and has been down as low as about 14.4%).
I was investing in all grades (selectively) but now don't. My target is 15% gross.
Actual return (excluding writing off the losses) is around 8.8% nett, not counting the 3 months it took me to get the whole $75k invested.
I'm happy with the platform, despite the losses. It's just a portion of my overall investments, not the whole shebang.
I claim my losses as I treat it like a business, evaluating and manually investing, and my accountant is comfortable with that.