|
|
Post by goldservice on Sept 8, 2014 10:41:53 GMT
Investing on FC has been time-consuming though there has been the opportunity to increase returns by spending more time on it. I was surprised to find that even after I was fully invested, I still had to spend significant time on FC to reinvest, to monitor loan comments etc. I began to wonder how much I was paying myself in order to earn this greater return. I compared the ongoing management of three investments each of approx. £100k:
1) five year bond at 2.8% gross (tell me where I could get better, please!) - no time required;
2) FC - about 5 hours pw; 8.5% net before tax
3) RS - about half an hour per week; 6.0% before tax
The hourly rate for the extra benefit over the bond of FC and RS is therefore around:
FC £20 per hour
RS £120 per hour
If one is retired, then the hours may be readily available.
What are others paying themselves?
Do scripters save time but then spend extra time ‘tweaking’?
|
|
|
|
Post by davee39 on Sept 8, 2014 12:01:50 GMT
I am retired. I have also been building a model railway for the last three years and hours can disappear while tweaking a track laying glitch. I put FC in a similar category, I would not spend time on it if I did not enjoy it. The challenge is to maximize returns within the flawed system (as in exploiting the ever faithful autobidders).
The Daily Telegraph has described how opening 12 Different current accounts a return of 6.5% can be made on £15k. I think I would rather stick to FC.
|
|
|
|
Post by batchoy on Sept 8, 2014 12:44:18 GMT
I'm not that sad that I equate my time in terms of monetary return. Like davee39, I do it because I enjoy the challenge of attempting to maximize my returns and if I didn't enjoy it I wouldn't do it. |
|
|
|
Post by GSV3MIaC on Sept 8, 2014 13:08:38 GMT
Likewise .. FC is a sort of online computer game for me, with score measured in pounds and p, and occasionally in terms of businesses assisted. I guess if I was playing with 6 figure sums instead of 5 figure sums I might be less laid back, but it'd probably be less fun / more worry. I fess up to probably two hours a day, including forum time, so I doubt I'm getting a very high wage, even at double digit IRRs.
|
|
baz657
Member of DD Central
Posts: 500
Likes: 189
|
Post by baz657 on Sept 8, 2014 14:56:27 GMT
I work full time running my own business therefore the odd five or ten minutes here and there aren't a problem and my total P2P commitment probably adds up to an hour or two per day. It's the only hobby I have that comes without outrageous costs.
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Sept 8, 2014 15:29:28 GMT
Yes it's much cheaper than drinking. My time is my own, so I do not count it.
Edit: However, I do have most of my cash in FC and the size of each purchase is substantial so not wasting time on doing due diligence for a £20 loan part. Also I have found FC educational, not least from forum members, so the time has not all been wasted.
|
|
|
|
Post by chielamangus on Sept 8, 2014 17:46:50 GMT
Investing on FC has been time-consuming though there has been the opportunity to increase returns by spending more time on it. I was surprised to find that even after I was fully invested, I still had to spend significant time on FC to reinvest, to monitor loan comments etc. I began to wonder how much I was paying myself in order to earn this greater return. I compared the ongoing management of three investments each of approx. £100k: 1) five year bond at 2.8% gross (tell me where I could get better, please!) - no time required; 2) FC - about 5 hours pw; 8.5% net before tax 3) RS - about half an hour per week; 6.0% before tax The hourly rate for the extra benefit over the bond of FC and RS is therefore around: FC £20 per hour RS £120 per hour If one is retired, then the hours may be readily available. What are others paying themselves? Do scripters save time but then spend extra time ‘tweaking’? I think, goldservice, that only you and I around here count the cost of investing in P2P. It's not a hobby for me. I wish I did not have to do it but the majority of my income depends on what returns I get. I don't count the labour cost in monetary terms though I did once estimate what I was earning per hour from FC. It made me realise that I needed to be investing a minimum of £500 per business over at least 100 businesses to get anything like a reasonable return to labour while spreading my risk. But even that was too big a step for me so my return to labour has stayed well below a notional level that I think is reasonable. The cost for me though is the opportunity cost - all those other things I could be doing which I prefer doing. It seems for most on this forum that P2P investing IS their hobby - if it is their preferred activity their opportunity cost is low. I have found Wellesley (before they reduced their rates) to offer the best combination of returns and work (zero!) for me, but income requirement means that I have had to stay in FC for the moment. AC are much better than FC for me, because the security behind the loans means less diversification is necessary and fewer loan proposals need to be examined for a given level of investment. RS are inferior to Wellesley, in my view, on both returns to labour and to capital.
|
|
merlin
Minor shareholder in Assetz and many other companies.
Posts: 902 
Likes: 302
|
Post by merlin on Sept 8, 2014 22:10:39 GMT
I guess if you are serious about investing and want to make money it is going to cost you in time and it does not much matter where you invest.
My best guess is that P2P costs me about an hour per day on average to manage four different accounts and writing on here. The stock market costs me a similar amount in time but involves far fewer transactions. My property portfolio cost me very little perhaps half an hour a week but I employ an agent to look after the nitty gritty. Other investments perhaps 3 to 4 days per year which is about the same time I spend sorting out the tax man.
P2P is fun and a way to make more than you would via any "conventional route" but only if you don't count the cost of your time.
|
|
adrianc
Member of DD Central
Posts: 9,994
Likes: 5,134
Member is Online
|
Post by adrianc on Sept 9, 2014 9:50:04 GMT
I think, goldservice, that only you and I around here count the cost of investing in P2P. It's not a hobby for me. I wish I did not have to do it but the majority of my income depends on what returns I get. I don't count the labour cost in monetary terms though I did once estimate what I was earning per hour from FC. It made me realise that I needed to be investing a minimum of £500 per business over at least 100 businesses to get anything like a reasonable return to labour while spreading my risk. But even that was too big a step for me so my return to labour has stayed well below a notional level that I think is reasonable. The cost for me though is the opportunity cost - all those other things I could be doing which I prefer doing. It seems for most on this forum that P2P investing IS their hobby - if it is their preferred activity their opportunity cost is low. This might sound a trite question, but if you're doing this "commercially", working out your hourly return - and finding it lacking - umm, why do it? Why not do something more lucrative with that time instead?
|
|
|
|
Post by chielamangus on Sept 9, 2014 10:06:04 GMT
I think, goldservice, that only you and I around here count the cost of investing in P2P. It's not a hobby for me. I wish I did not have to do it but the majority of my income depends on what returns I get. I don't count the labour cost in monetary terms though I did once estimate what I was earning per hour from FC. It made me realise that I needed to be investing a minimum of £500 per business over at least 100 businesses to get anything like a reasonable return to labour while spreading my risk. But even that was too big a step for me so my return to labour has stayed well below a notional level that I think is reasonable. The cost for me though is the opportunity cost - all those other things I could be doing which I prefer doing. It seems for most on this forum that P2P investing IS their hobby - if it is their preferred activity their opportunity cost is low. This might sound a trite question, but if you're doing this "commercially", working out your hourly return - and finding it lacking - umm, why do it? Why not do something more lucrative with that time instead? Try reading what I wrote!
|
|
adrianc
Member of DD Central
Posts: 9,994
Likes: 5,134
Member is Online
|
Post by adrianc on Sept 9, 2014 10:11:13 GMT
This might sound a trite question, but if you're doing this "commercially", working out your hourly return - and finding it lacking - umm, why do it? Why not do something more lucrative with that time instead? Try reading what I wrote! "It's not a hobby for me. I wish I did not have to do it but the majority of my income depends on what returns I get. ...my return to labour has stayed well below a notional level that I think is reasonable." So your income depends on doing something that you find returns less than a reasonable amount. So, umm...?
|
|
|
|
Post by qwerty on Sept 9, 2014 14:22:27 GMT
For me it is just a hobby, my wife says it is like i'm playing Monopoly but with real money. I have a few thousand over FC and AC and will not invest any more, I will just reinvest the repayments and interest. I see it like a Casino, I may win, may loose, just a bit of fun  |
|
maxmarengo
Member of DD Central
Posts: 96
Likes: 28
|
Post by maxmarengo on Sept 9, 2014 16:22:07 GMT
You remember that old joke about the Nuclear power station that was so automated it could be run by a man and a dog. The man watched the dials and the dog was there to stop him touching any of the levers.
In my investing world FC acts a bit like the dog. The time I spend on FC gives me the sensation of being an active investor with a small part of my portfolio and it helps me resist the temptation to meddle with my main investments.
|
|
blender
Member of DD Central
Posts: 5,719
Likes: 4,272
|
Post by blender on Sept 9, 2014 18:51:07 GMT
I used that old joke a little while back about the core software. But I thought the man was always there to feed the dog, not to do anything useful like watching dials.
|
|
mikeb
Posts: 1,072
Likes: 472
|
Post by mikeb on Sept 10, 2014 17:37:01 GMT
I used that old joke a little while back about the core software. But I thought the man was always there to feed the dog, not to do anything useful like watching dials. It's so old, it at least dates back to Strowger (mechanical) telephone exchanges. Man feeds the dog, dog bites the man if he attempts to touch anything.
|
|
