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  1. #41
    Squirrel Mortgages (Verified) JB@Squirrel's Avatar
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    Quote Originally Posted by whitt View Post
    I would like to deposit $100 a fortnight regularly into my squirrel account.
    Is this possible as it mentioned minimum $500.

    Also if I did these regular deposits how would I use the funds? Can I order and invest small amounts or would I need to wait and invest larger?
    Hi Whitt,

    Our platform wont work that well for you just now. You don't earn interest when the money isn't invested and we have a minimum of $500 for term investments. Better to keep it in a bank Call Account and then transfer over larger amounts when you can.

    We're going to launch a few things early to mid next year.

    The first is we are going to put interest on money that is in bids put not yet invested. Investors should get some sort of return from the moment they commit funding and not have to wait until we lend it out.

    The second is that we will launch a Call Product for regular savers and those needing quicker access to their funds. Once we get this product sorted we can allow smaller transactions into it (like your suggestion.)

    Third is that we are introducing a Secondary Market. This is built and we are just waiting on getting an approval from the FMA next year and can then launch it. With the way we allow Investors to sell back to the platform we don't want millions on tiny loans clogging up the system hence have a $500 minimum.

  2. #42
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    I have an investment order 500$ sitting there at 9%.it seems I have to lower this to 8% to get it invested? When squirrel say 500$ min investment what do they mean exactly? Can I only provide 100% of the loan for 1 borrower,then the min investment will be whatever the min loan a browser wants?

    Have I got that right?

    Interesting re p2p socialism. If there is no defaults squirrel will do very well. If there is a lot of defaults,or it gets to a certain point,squirrel will start reducing the investors rate of return.don't think i'm a fan, but each to their own.

  3. #43
    Squirrel Mortgages (Verified) JB@Squirrel's Avatar
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    Hi AppleCrumble.

    Yes you may need to change your order to be within the market rates. At 5 year you can go up to 9% but 2 year is currently max 8%. There is currently a $30k loan awaiting funding at 5 years that you could bid 9.00% against.

    In terms of the Reserve Fund and P2P Socialism:

    First point is Squirrel does not financially benefit from the reserve fund. The Reserves never go back to Squirrel (other than the funds we have tipped in to seed the initial reserves.) The Reserves are held in Trust for investors.

    Second point is that if the Reserves were fully depleted then we replenish the Reserves by temporarily reducing the interest paid to investors. In essence this means that any excessive losses are socialised/borne across all lenders. This means investors don't need to be concerned with specific loan selection or even security and that investors are getting the full diversification benefit across the entire lending book. This is a protection mechanism for investors and purely for the benefit of investors. It is a very efficient way of reducing risk.

    Cheers, JB

  4. #44
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    Tks JB,

    I will look at cancelling my order and see if I can get in on the 5 year loan.

    What happens the money going towards the reserve fund when the reserve fund reaches 4% of the loan book? I was of the thinking it went to squirrel.

  5. #45
    Squirrel Mortgages (Verified) JB@Squirrel's Avatar
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    Quote Originally Posted by AppleCrumble View Post
    Tks JB,

    I will look at cancelling my order and see if I can get in on the 5 year loan.

    What happens the money going towards the reserve fund when the reserve fund reaches 4% of the loan book? I was of the thinking it went to squirrel.
    So, we've seeded the Reserve Fund with some initial money to get it started and we'll continue to top up the reserves to maintain it at 4.00% for the first year. We think we'll need to tip in around $400k. In the meanwhile obviously part of the borrower interest will be getting diverted to the reserve fund and continuing to build it up.

    After the first year, and only if reserves allow it, we can pull our seed money back out. (But only our seed money and only to the extent that reserves are over 4.00%.) Personally I don't think we'll be getting it out for a while as the growth rate in the book will mean we'll struggle to get over 4.00% after the first year.

    If, at some point in the future, we get to over 4.00% reserves then we'll just keep building it up. The more reserves for investor protection, the better! I don't imagine us ever getting to a point where we say that we have too much reserves.

    If we find that we are reserving too much then we'll tweak down the credit premium charged to borrowers and slightly lower the rate we reserve at.

    At no time does Squirrel ever have any rights over the Reserve Fund. If Squirrel Money was wound down then any residual reserves after all investors have been paid will be paid to charity which is currently Starship.

  6. #46
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    I'm starting to like the idea of Squirrel over Harmoney.

    I've had some big returns from Harmoney (over 10% after tax), but I've got a number of issues with it... The interface is a bit rubbish - I have no idea whats going on with my investments. They don't talk to you. Loans get paid back into their holding account and it's not worth my while to check this every day to see if there's anything to withdraw or reinvest - and I don't get interest on this amount. Finally, I have no way to automatically reinvest.

    If Squirrel could make it so that I could have an allocated percentage of money repaid to me, to be automatically reinvested in vetted loans and a percentage automatically paid back into my bank account, this would mean I could use Squirrel to get an income. With the income protection, it would mean that I could tip money into it for a self perpetuating retirement fund giving a return that is above inflation (after tax) with low risk. Automatic reinvestment would also be a good feature to encourage investors and allow Squirrel management to pull reports that could be used to do business forecasting, etc.

    You are part of the way there by planning to pay interest on unallocated money. Do the rest and I'll throw a quick $100k into the system as a quick starter with more to come if it plays out nicely.

  7. #47
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    Have stopped investing capital into Harmoney. Am getting good returns but the work required plus the risk is too much for me. I will continue to reinvst the interest, but all of my P2P capital will be invested in Squirrel next year.

    Should be a lot easier / less stressful.

    Edit: just had my first write off with Harmoney, they never made a payment. Reaffirms my plans above.
    Last edited by unhuman; 14-12-2015 at 12:04 PM.

  8. #48
    Squirrel Mortgages (Verified) JB@Squirrel's Avatar
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    Thanks Lewy,

    Like your thinking above and will incorporate it in our next change window for early next year. It fits with our plan to create great retirement/income products.

  9. #49
    Squirrel Mortgages (Verified) JB@Squirrel's Avatar
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    Thanks Lewy,

    Really like your ideas and we'll incorporate them into our next change window in March. Fits nicely with our goal of creating world-class retirement/income products.

  10. #50
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    Quote Originally Posted by JB@Squirrel View Post
    Thanks Lewy,

    Really like your ideas and we'll incorporate them into our next change window in March. Fits nicely with our goal of creating world-class retirement/income products.
    Cool, do you have a subscription to email me when changes are implemented?

    also, how's the secondary market work in Squirrel? I imagine that if you are investing in loans and there's a loan that's been reliably paid off for months, that would be more attractive... But if you have repayment protection, it wouldn't matter so much. Is the advantage for investors that the loan periods are shorter on the secondary market or have I misunderstood what that's about?

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