pikestaff
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Post by pikestaff on Aug 10, 2014 6:38:31 GMT
You said in an earlier post that your mum would be reinvesting in the 5 year market. If that's so, then your last post doesn't make sense. Early repayment just triggers early reinvestment.
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c88dnf
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Post by c88dnf on Aug 10, 2014 18:57:15 GMT
You said in an earlier post that your mum would be reinvesting in the 5 year market. If that's so, then your last post doesn't make sense. Early repayment just triggers early reinvestment. Indeed I did, but she is starting to get a better understanding of the P2P picture. In particular that a 5 year P2P deal does not equate to a 5 year term at the bank or building society.
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c88dnf
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Post by c88dnf on Aug 15, 2014 19:25:42 GMT
Week 2 update:
Ratesetter: all £2k lent out. Portfolio value now £2025 as the incentive payment has been received. Ave investment rate 6.1%
Zopa: £1,997.31 lent out. Portfolio value £2000.18 including interest received from rapid return payments). Ave rate 5.06%
Mum is so far very happy with Ratesetter, not least as the incentive payment arrived so quickly. Her only negative RS point is that that payment went directly into the monthly interest queue and is out at 2.0%. She'd expected to be able to choose what to do with her £25. On the other hand, she's now discovered the shorter term options with RS and invested another £2000 in the 1-year market at 3.7%.
Mum's views on Zopa are much less positive. She doesn't like the inability to see where her moeny is in the queuing system and doesn't understand why she has been stuck on just under £2,000 lent for almost one week. As she puts it "they wouldn't be trying to avoid giving me that £50 would they?". Presumably not, but she certainly doesn't have the degree of comfort with Zopa she has with RS. She's put another £100 into Zopa to try to get over the £2k loan level required for the £50 incentive payment, but nothing has moved so far.
In summary, after just 2 weeks, RS have made a highly favourable impression on a newbie to P2P. Zopa quite the reverse.
I leave it to others to decide if mum is typical, but if the two companies management are reading this, consider yourselves informed of one elderly investor's views on how you appear to a new customer
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c88dnf
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Post by c88dnf on Aug 23, 2014 17:36:33 GMT
Much to report at the end of week 3.
Zopa - the extra £100 to get past the £2k hurdle for the £50 incentive payment has finally been lent out. It took a full week. There are 57 loans in the portfolio: 20 for 4 years; 37 for 5. Average interest rate as shown by Zopa is 5.04% (after 1% Zopa take), so the 5.2% guarantee will apply.
Ratesetter - profile topped up with £96 to match the Zopa portfolio. It went at 5.9% in 4 hours. Two loans with average interest rate 6.09%.
Portfolio values: Zopa £2096.70; RS £2121.00 (RS includes £25 incentive payment)
Due to the long delay in getting funds invested on Zopa, my mother has decided that she will not recycle any funds there. To keep the experiment straightforward, the same will be done with the RS 5-year funds. In practice, both sets of money will get invested in RS for whatever loan period appeals to mum at the time. Mum is very enamoured of RS, especially the ease of getting money loaned out and - to her - the clarity of their web pages. She describes Zopa as "too slow", "confusing" and also noticed mismatches between her "dashboard" and "account" screens' information for 2-3 hours after the £100 had been lent out. That caused a phone call to me as it worried her that money might have disappeared into a black hole!
There is also one curious thing which those "in the know" or with better maths than me may be able to explain. On Ratesetter, the expected end value of the £2096 is easy to find and comes out at £2428.03, plus the £25 incentive payment. On Zopa, the end product requires a deal of tedious adding up, but having done so several times it comes out higher at £2438.24 (plus £50 incentive) despite a lower overall interest rate. I wonder if that's because Zopa's "expected return" includes Zopa's 1% rake-off and is, therefore, not the end-user's expected return at all? If so, it seems somewhat misleading.
Anyway: game on! Next report in 2/3 weeks' time when regular income should have started flowing in.
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Post by Ton ⓉⓞⓃ on Aug 23, 2014 22:03:33 GMT
There is also one curious thing which those "in the know" or with better maths than me may be able to explain. On Ratesetter, the expected end value of the £2096 is easy to find and comes out at £2428.03, plus the £25 incentive payment. On Zopa, the end product requires a deal of tedious adding up, but having done so several times it comes out higher at £2438.24 (plus £50 incentive) despite a lower overall interest rate. I wonder if that's because Zopa's "expected return" includes Zopa's 1% rake-off and is, therefore, not the end-user's expected return at all? AFAIK all figures in ZOPA's MLB (My Lending Book) ignore Fees and Tax. I don't know RS In the quote above are Zopa & RS mixed up or am I misunderstanding something?
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c88dnf
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Post by c88dnf on Aug 24, 2014 10:40:35 GMT
There is also one curious thing which those "in the know" or with better maths than me may be able to explain. On Ratesetter, the expected end value of the £2096 is easy to find and comes out at £2428.03, plus the £25 incentive payment. On Zopa, the end product requires a deal of tedious adding up, but having done so several times it comes out higher at £2438.24 (plus £50 incentive) despite a lower overall interest rate. I wonder if that's because Zopa's "expected return" includes Zopa's 1% rake-off and is, therefore, not the end-user's expected return at all? AFAIK all figures in ZOPA's MLB (My Lending Book) ignore Fees and Tax. I don't know RS In the quote above are Zopa & RS mixed up or am I misunderstanding something? No Ton, the figures/ lenders aren't mixed up. As displayed to the lender as "expected return" the data on Zopa's "my loan book" shows a higher return than Ratesetter's "my portfolio" info, despite a lower interest rate. If both our expectations are correct, then Zopa's presentation of information to lenders is misleading at best.
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dorset
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Post by dorset on Aug 24, 2014 17:18:20 GMT
Interesting trial but you are comparing fundamentally different investing models. RS gives you a degree of control while Zopa is entirely passive. RS is growing at a fair pace while Zopa is in effect becalmed.
I started out at the beginning of 2012 with more in Zopa then RS and have been adding in funds to both over the last couple of years. I now have three times more invested in RS than Zopa. I am not adding to Zopa but watch with dismay at the time lag in reinvesting. At the beginning of August I had about £300 or so reinvestment funds on offer with Zopa and this is now down to about £80. No control. In the same period I have reinvested about £1000 with RS at a speed and at a rate that I choose.
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c88dnf
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Post by c88dnf on Aug 25, 2014 0:18:54 GMT
Interesting trial but you are comparing fundamentally different investing models.
That's what makes this interesting to me dorset! I too have been in P2P for quite a while, but my mother hasn't. Her knowledge of this investment sector is derived from two sources: (1) me and (2) the general press' financial reports of P2P. Although I advised her to plump as an elderly, conservative investor wholly for Ratesetter, she elected to split her initial investments across the two, not least as Zopa offer a significant "kickback" of £50 on a £2k investment. Remember, for many investors - though probably not you or I - passive and boring = goodness! Although it's fair to say that mum is already leaning towards RS rather than Zopa as a wider investment medium (while avoiding admitting in any way that my advice might have been more accurate than the press), the overall payback is still up for grabs on a true 5-year term.
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Post by Ton ⓉⓞⓃ on Aug 26, 2014 13:41:36 GMT
AFAIK all figures in ZOPA's MLB (My Lending Book) ignore Fees and Tax. I don't know RS In the quote above are Zopa & RS mixed up or am I misunderstanding something? No Ton, the figures/ lenders aren't mixed up. As displayed to the lender as "expected return" the data on Zopa's "my loan book" shows a higher return than Ratesetter's "my portfolio" info, despite a lower interest rate. If both our expectations are correct, then Zopa's presentation of information to lenders is misleading at best. About the unexpected difference between the two expected returns; could that be down to the £25 RS and £50 Zopa being invested for five years gives £10 more interest for Zopa? That sounds too simple. Or is it just the maths treatment is different for the two loan books, anyone know?
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c88dnf
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Post by c88dnf on Aug 26, 2014 18:57:06 GMT
About the unexpected difference between the two expected returns; could that be down to the £25 RS and £50 Zopa being invested for five years gives £10 more interest for Zopa? That sounds too simple. Or is it just the maths treatment is different for the two loan books, anyone know? Ton - it isn't the incentive payments being reinvested as they won't be. Take off the incentive payments from the returns shown on RS/Zopa and there is still an apparent advantage to Zopa which seems unlikely, but I can't be sure. My guess is that the Zopa "expected return" figures are simply wrong. Time will tell.
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c88dnf
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Post by c88dnf on Sept 5, 2014 12:25:26 GMT
A quick update on the senior Mrs C88DNF's foray into P2P.
Ratesetter - invested £2096; earnings to date £25.00
Zopa - invested £2096; earnings to date £49.94
Both earnings figures include "newbie bonus" payments (RS £25, Zopa £50). No interest yet received from RS, but Zopa has produced 35p. On the other hand, Zopa's return is diluted by their fees: hence under £50 return, despite £50.35 income. My mother very much dislikes the way Zopa take their fees on a daily basis in advance of interest payments. Her view is that they should only go out when payments are received.
We have noticed one other odd thing with Zopa which other Forumites may be able to explain. Experimenting with Zopa's Rapid Return feature, £100 worth of loans are always not eligible for repayment. This can't be due to repayments imminent,as the first won't happen for some weeks. Could the 2 loans which mum acquired (automatically) from Rapid Return customers be ineligible? It's another little irritation which is nettling mum.
Mum has firmly come down on the side of Ratesetter based on her first few weeks' experience. All her returns will be recycled into Ratesetter and she has this week put more money onto that platform (and loaned it out within 4 hours). In some senses, I suppose that makes the experiment conclusive. Zopa have irritated mum enough that she doesn't want to invest more with them, whereas Ratesetter have consistently impressed her. On the other hand, the actual amount coming back from Zopa is greater (by the amount of the introductory bonus differential). Plus there's a long way to go in terms of borrower defaults or early repayments.
Another report towards September month end....
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mikes1531
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Post by mikes1531 on Sept 7, 2014 4:31:41 GMT
And if you get a Zopa default you wait AT LEAST 4 months for the money back, could be a lot longer if there is the odd partial payment. With RS you just get the money back immediately to re-lend. The flip side of the delay before the Safeguard Fund pays out is that you continue to earn interest at the specified rate until the payout.
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c88dnf
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Post by c88dnf on Oct 18, 2014 14:59:37 GMT
October update on my mother's foray into P2P. Remember, £2096 originally invested in each platform.
Ratesetter: Earnings £45.21, of which interest payments £20.21. Capital remaining invested £2037.17, spread across 2 loans.
Zopa: Earnings £70.27, of which interest payments £20.27. Capital remaining invested £2004.13, 56 loans.
During the past month 1 Zopa loan was repaid completely and 2 others were repaid in part. Hence less capital remaining on offer. The critical differentiator so far remains the upfront incentive payments to new investors. At the time, £25 with RS, £50 Zopa and the same to the recommender (me!).
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Post by webbski9 on Oct 18, 2014 20:46:02 GMT
Suggest you try eMoneyUnion or Madiston to get " real" returns. They both have " protection" for defaults .Only my opinion .
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c88dnf
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Post by c88dnf on Oct 18, 2014 21:29:01 GMT
Suggest you try eMoneyUnion or Madiston to get " real" returns. They both have " protection" for defaults .Only my opinion . Thanks for the suggestions. Neither appears suitable for a novice to P2P like my mother.
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