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  1. #1171
    Senior Member
    Join Date
    Sep 2015
    Location
    Norf Eyelynd
    Posts
    776

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    With Inflation running at 6+% ( cough cough ) and most LC loans offering about 10% minus 25% flex, these days..... After Tax the true return is now almost zero.

    As funds now get repaid - I too am withdrawing every cent and investing elsewhere.

    Do not get me wrong, I really really like LC and they have served me very very well for 6 years, but perhaps now with changing external financial variables, for me their time with re-investing is finished for now.

  2. #1172
    Member
    Join Date
    Sep 2019
    Posts
    51

    Default

    It's a valid viewpoint. Everyone will have their own strategies, and different "tipping points".

    For me, inflation is one factor when considering return on investment, but just as important is "where else would I put my money". Inflation might be 6% (those of us who pay rates, buy building materials, employ tradespeople and shop at supermarkets will know it has been at least that for a while!), but it doesn't mean that bank term deposits have caught up: TD rates are still very very low.
    Managed funds returns have been good, but only partly impacted by inflation - I wouldn't say their returns have dramatically increased in the past 2 years. So while I do have money in managed funds as part of my diverse portfolio (same with NZ property), I feel that P2P still has a part to play in that portfolio.

    I think a good loan of around 11-12% with 10% going to LC is still a very productive investment. Anything below 10% at 25% fee, or below 8% at 10% fee, is not worthwhile for me, I do agree on that.

    I treat P2P like those managed funds actually: where in funds, you split between conservative, medium and risky, I do the same with loans. Each has a return in line with the risk. I have to say the risks with LC are a lot lower than what they were with Harmoney.

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