sosilly
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Post by sosilly on Jun 22, 2015 7:04:48 GMT
I'm at the other end of the scale. 25 years old, a PG student with zero commitments beyond my current rent. My goals are best summarised as
-A first mortgage in 5 years
-Saving for retirement
-Saving for children
But with mortgage rates so low at the moment I see no reason to try and save more than a 20% deposit required to fix at a low rate (hopefully split with a SO), nor any reason to try and second-guess the interest rates in five years time; I'm happy to assume they won't change from now and take that to be the best guess I can make.
So then, my money earmarked for 'house deposit' is mostly in asset-backed P2P because five years is long enough to get most of it back if I need to, and it's unlikely I will need to quickly get cash-to-hand between now and then. Five years is chosen because of the new Help-To-Buy ISA scheme which coincides well with my plans to return to the UK (I'm currently overseas) and get a `proper' job.
Retirement money currently goes into a SIPP at a maximum of 2880/year in order to get the maximum bonus given I'm not earning anything in the UK, this probably will increase when I relocate and staying paying income tax.
Saving for children comes after saving for a house, but for as long as I am child-less I probably would put that into P2P too (and then a bigger house for when a sprog or two arrives).
Other than that, I have some cash in some old fixed-term savings accounts but anything I have access to is in P2P or my small SIPP, and so far I am happy with the returns I have seen during the poor high street rates.
I must say, if I were wealthier then I would feel the need to diversify more the type of investment I make (P2P side is currently almost all with AC) - but given my net worth (<30k) I consider my young age to be exploitable in that I'm in no rush to spend money on anything and should I loose significant quantities, I do have the time to make that back - and as arrogant as it may sound I fully expect to be a HR income tax payer within several years from now.
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adrianc
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Post by adrianc on Jun 24, 2015 19:06:59 GMT
So then, my money earmarked for 'house deposit' is mostly in asset-backed P2P because five years is long enough to get most of it back if I need to, and it's unlikely I will need to quickly get cash-to-hand between now and then. So what do you plan to do with the repayments as they come through, and if you aren't reinvesting in five-year, what will happen to your actual rate?
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Post by Financial Thing on Jun 24, 2015 22:49:09 GMT
I'm extremely new to P2P and have 5% of liquid assets spread across 11 platforms and plan to spread to 15. I think the more platforms you spread across the better because it's inevitable that one or two will fail. Just look at the list of past failures: www.p2pmoney.co.uk/companies.htmSince P2P is exploding in popularity, I wonder what will happen to investors confidence when a platform fails? If lots of people run for the exits and liquidate out of P2P, it could create a domino affect.
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sosilly
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Post by sosilly on Jun 24, 2015 23:21:20 GMT
So then, my money earmarked for 'house deposit' is mostly in asset-backed P2P because five years is long enough to get most of it back if I need to, and it's unlikely I will need to quickly get cash-to-hand between now and then. So what do you plan to do with the repayments as they come through, and if you aren't reinvesting in five-year, what will happen to your actual rate? Jah - for now, reinvest. Five years is a long time, and as time goes on the more I have saved in P2P the easier it is to liquidate a fixed amount as that becomes a smaller proportion of total lending. As far as property-buying goes, the worst case is I end up delaying a short time while I sell loans which won't be the end of the world
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bigfoot12
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Post by bigfoot12 on Jun 25, 2015 7:44:51 GMT
So what do you plan to do with the repayments as they come through, and if you aren't reinvesting in five-year, what will happen to your actual rate? Jah - for now, reinvest. Five years is a long time, and as time goes on the more I have saved in P2P the easier it is to liquidate a fixed amount as that becomes a smaller proportion of total lending. As far as property-buying goes, the worst case is I end up delaying a short time while I sell loans which won't be the end of the world It might be better for you to invest in amortising loans so that your loans are always being paid back. That way the exact repayment date doesn't matter so much. In a year you might consider lending with a maximum maturity of four years and so on. I agree with you that you are more flexible unlike someone saving up for school fees or to repay a tax demand, but you might want to consider that the event which makes property cheaper for you might also make P2P less liquid. Not one to lose sleep over, but worth keeping in mind.
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bigfoot12
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Post by bigfoot12 on Jun 25, 2015 7:54:39 GMT
Since P2P is exploding in popularity, I wonder what will happen to investors confidence when a platform fails? If lots of people run for the exists and liquidate out of P2P, it could create a domino affect. I do worry about this. I think that certainly liquidity could dry up on several platforms very quickly. There seem to be a lot of investors on this forum who assume that liquidity will always be there. There have been failures but so far only to smaller platforms. I guess it will depend on how big the platform is that fails and why it fails, but I agree that we can't ignore contagion in P2P. I'm ... spread across 11 platforms and plan to spread to 15. I think the more platforms you spread across the better ... I agree that you should spread across several platforms, but I think that there is an upper limit. I can't find 15 of the current crop that worth investing in. As you have less than 0.5% of your wealth in each it might be a good strategy for a beginner to try a lot and then prune some back as you understand how they work so I am not saying you are wrong, just I can't find a 9th platform I am happy with.
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pom
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Post by pom on Jun 25, 2015 11:48:03 GMT
I think when you're a newbie the only way you can really gain the experience to decide which are worthwhile is to try a lot to compare . I've invested in 13/15 of the ones I've registered with (not fancying 2 of them now I can see more), but already have a list of those I'm unlikely to add to, or maybe will reduce/consolidate once I decide I've invested "enough" - and once the novelty wears off and tracking them becomes a faff! There's a few others I'm considering but I'm definitely getting more picky, I think they'd have to to have something really good/unique to be worth the hassle of adding more now.
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webwiz
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Post by webwiz on Jun 25, 2015 18:18:51 GMT
I was quite surprised when I counted them up to find that I have substantial investments in 7 platforms and am registered but with little or no investment in 6 others. Unless you make this a full time job this is too many. Maybe one relatively safe and boring, one paying a better rate but needing more attention, and one exciting if risky one would be a good mix.
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jonah
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Post by jonah on Jun 25, 2015 18:21:57 GMT
If you don't mind the question... Which 13 or 15? I am on three and checking on two more, but I can't see any way to get to double figures let alone 15!
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pom
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Post by pom on Jun 25, 2015 19:15:48 GMT
If you don't mind the question... Which 13 or 15? I am on three and checking on two more, but I can't see any way to get to double figures let alone 15! Well there are links to plenty to try on this board, so if you can't see that many that are tempting, congratulations, you're clearly already more discerning than I am !! I currently have investments in Ratesetter, Saving Stream, MoneyThing, Funding Circle, Lend Invest, Lending Works, ablrate, Zopa, Landbay, FundingSecure, BridgeCrowd and also HouseCrowd and PropertyMoose for something a little different. Zopa & Landbay I don't think I'll take any further just due to the rates available, but never say never when they're an easy home and I still haven't quite worked out where to put everything anyway. There's probably another 3 of these that are already on my list of likely to be ditched because I'm either not liking so much or they are proving hard work. I also registered for CrowdProperty (but don't think I'm going to invest, looks too small) and ThinCats (but feel I'd need to do a lot more homework before I would feel comfortable investing there, and just haven't had time yet). And that's in my first 2 months, so probably a little bonkers !!! But my circumstances are such that it made a lot more sense to wildly dip toes in and evaluate later - if I were building up slowly rather than trying to find a home for a scarey (to me) lump sum, then I'm sure my strategy would have been different. Anyway I think Webwiz has hit the nail on the head about how it can become a full time job, and at some point that may be a decision I need to make, and maybe prune severely. Next years tax return is going to be fun to do the calcs for anyway...!!!
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bigfoot12
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Post by bigfoot12 on Jun 25, 2015 21:01:35 GMT
... trying to find a home for a scarey (to me) lump sum, then I'm sure my strategy would have been different. Might be better to earn a little less interest for a few months whilst you see how those investments you have made so far work out. Stick the rest in FSCS backed instant access accounts or Nation Savings products or similar. There are lots of pitfalls in this field. ... and maybe prune severely. Next years tax return is going to be fun to do the calcs for anyway...!!! If you are thinking of pruning it well worth doing it by the end of March to save you some work next year.
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pom
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Post by pom on Jun 25, 2015 22:00:59 GMT
... trying to find a home for a scarey (to me) lump sum, then I'm sure my strategy would have been different. Might be better to earn a little less interest for a few months whilst you see how those investments you have made so far work out. Stick the rest in FSCS backed instant access accounts or Nation Savings products or similar. There are lots of pitfalls in this field. Yep already got a few FSCS accounts, premium bonds and everything else goes in national savings income bonds whilst I work out what to do with it. Also a portfolio of stocks etc, and then just waiting for property sales to complete. I'm at about 6% in p2p etc at the moment, against an initial finger in air goal of 10% that I figured I could afford to lose so I feel quite comfortable with the current risk levels (when I mentioned scarey sums I was talking about he wider amount).
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webwiz
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Post by webwiz on Jun 26, 2015 10:55:48 GMT
If you don't mind the question... Which 13 or 15? I am on three and checking on two more, but I can't see any way to get to double figures let alone 15! Low risk/reward: Zopa 5% of total Ratesetter 12% Medium: Wellesley 44% Ablrate 3% PropertyMoose 5% High: Savingstream 20% Moneything 10% Others where for one reason or another did not invest any more than a toe in the water: Archover Landbay Funding Secure Unbolted Property Partner Fruitful If I selected just one from each risk category to recommend they would be RS, PM and MT.
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pom
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Post by pom on Jun 26, 2015 17:51:09 GMT
If you don't mind the question... Which 13 or 15? I am on three and checking on two more, but I can't see any way to get to double figures let alone 15! Low risk/reward: Zopa 5% of total Ratesetter 12% Medium: Wellesley 44% Ablrate 3% PropertyMoose 5% High: Savingstream 20% Moneything 10% Others where for one reason or another did not invest any more than a toe in the water: Archover Landbay Funding Secure Unbolted Property Partner Fruitful If I selected just one from each risk category to recommend they would be RS, PM and MT. Hmm I have been contemplating looking into Wellesley so interesting that you'd rate PM over them even tho you currently have loads more in W (and so far I'm liking what I see of PM) so could I ask why?
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webwiz
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Post by webwiz on Jun 26, 2015 18:38:10 GMT
If I selected just one from each risk category to recommend they would be RS, PM and MT. Hmm I have been contemplating looking into Wellesley so interesting that you'd rate PM over them even tho you currently have loads more in W (and so far I'm liking what I see of PM) so could I ask why? I was an early investor in W and so got in on some very attractive rates which have since come down, before they decided to spend money on TV advertising instead of directing it to lenders, so they won't get any more of my money until they improve. PM is a bit of a gamble in terms of returns but the initial capital is among the most secure of all the platforms. If PM turn out to be competent landlords they will end up as my overall favourite but we won't know for a couple of years. Another reason why my holding in PM is not very large is that I am restricting my investment in any one property to £500 (occasionally £1000) for diversification and the loan stream is not fast. On PM you can't use the SS trick of going in heavy on an initial loan and diversifying by selling part on the SM to put into another loan
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