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Post by watergate on Jan 30, 2015 13:15:51 GMT
Hello
I am new to the forum and not yet invested. Very simple question here folks. Everything is screaming at me not to touch something "this good" with a very long version of someone else's !
So starter for ten.....do I or don't I ?
Are you making big or losing big ?
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Post by oldnick on Jan 30, 2015 13:45:51 GMT
Welcome to the forum.
Making it big?
Yes, if earning better than bank and building society rates is your measure, and yes, if you mean after tax and inflation - but some of the rates are marginal depending on the rate of tax you pay - buyer beware, and do your sums - don't be a lemming :-)
Remember also that past performance is no guarantee of the future...These investments are not backed with taxpayer's money.There is also no absolute guarantee of you being able to withdraw all your money at will - there has to be a willing buyer of your loan, and, if the loan goes into default, there may be little or no money returned in the worst cases.
Oh, and don't invest more than you can afford to lose.
Apart from that it's all good as I'm sure you will have gathered if you've consumed every word written on this forum - which I of course strongly recommend.
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Post by tybalt on Jan 30, 2015 16:35:18 GMT
In a World in which :
Warren Buffet can make a seriously bad investment in Tesco. Government Bonds have a negative redemption yield. Banks and Building Societies are paying less than 2% of funds deposited with them and yet there is still real inflation.
I think that two years in at an average of 8% after losses I am doing fine. I do not expect to make a huge return and I study the loan documentation. I now believe I can avoid the worst of loans but accept that some must go under through circumstances beyond anybody's control.
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bigfoot12
Member of DD Central
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Post by bigfoot12 on Jan 30, 2015 17:19:42 GMT
Welcome watergate, I am doing okay, I have been lending for nearly 8 years and some years have been worse than others, but on the whole better than in the bank, especially over the last three years. I think that you need to realise that there is a big difference between the platforms. And I think that the rate on offer does reflect the risk to some extent. There is also a big difference in the amount of work you need to do. Zopa and Ratesetter require very little work and your money will be lent out quite quickly. Other platforms, in particular those lending to businesses require more effort, and there can be long periods when the money isn't lent out and so doesn't earn interest. You need to diversify both across loans and platforms, watch out for void period, understand the risk, understand the liquidity, expect losses on some of the platforms, and understand how tax will impact those returns. Hopefully soon the tax problem is going away as there are proposed changes. At the moment most UK individuals can't offset losses against the interest for income tax purposes, but as I said this might change soon. Good luck. |
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Post by ranjeb on Jan 30, 2015 18:39:35 GMT
If you do decide to take the plunge make sure to check for cashback offers for new customers and if you want a refer a friend bonus message me  ? |
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j
Member of DD Central
Penguins are very misunderstood!
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Post by j on Jan 30, 2015 19:22:18 GMT
Most important thing to remember is diversify. On one platform where loan output has been almost non-existent, very recently a loan has gone bad (pending, still early days but, looks very bleak), many of us lenders had parked the cash there till more loans came through & the aforementioned happened. Lesson? Do not get greedy or restless, even if some of your money is stagnant, wait for the right opportunity to diversify rather than overload in one or two loans for the sake of a few quid. I personally like where/who you choose to lend to but, decide on how much work you want to do & pick some options accordingly. Did I mention...DIVERSIFY  |
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Post by GSV3MIaC on Jan 30, 2015 20:18:49 GMT
And finally .. decide how much you value your time. Some platforms are fairly easy to park money in (Zopa, Ratesetter) and ignore it (auto invest interest if you want) .. others require you to check where you are putting you money, and manage it on a monthly or daily (or in the case of FC, sometimes hourly if you want to get into auctions at the best rate!) fashion, which can chew up a lot of your time; so don't do it if you don't enjoy doing it. As others have said .. de-worsify .. building societies may offer rubbish interest, but if you need a new roof you are fairly sure you can get your cash out. Stocks and shares - riskier, but ISA-able, which helps. Property - yep, everyone should have an interest in a house, IMO. P2P lending .. one of the options in the toolbox, but as someone already said, don't punt what you can't afford to lose. You probably WON'T lose it, but you might (same is true of shares, of course). If you are of a nervous disposition, think carefully (cautious is OK .. cautious is even GOOD .. 'nervous', probably not so good).
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Post by watergate on Jan 31, 2015 15:18:25 GMT
Thank you all for your time and valuable advice. Really appreciate the welcome and support. The key messages are reasonably straightforward but it's really valuable to speak with each of you that have first hand experience in this particular group and platform.
So I'm off to do lots more reading as suggested and I'll set my goals and affordable budget as advised.
Thanks again.
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