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Post by portlandbill on Mar 10, 2016 11:42:15 GMT
Hi all, Newbie here, get ready for the stupid questions!
To let you know where I am with SS; I have a few, small (couple of £hundred) loans put on over the last month with a view to increasing to quite a few £k overall in a month or so. I like the ease of doing it, and the clear website, showing what’s going on. I have also been impressed with the responses to questions that I have asked directly by email.
I’m not a sophisticated investor, but have some cash that’s either making me next to nothing in the bank, or bouncing up and down all over the place on the stock market. I’m looking for something that’s a bit more profitable, without the volatility of stocks (aren’t we all)!
I have investments in another p2p scheme (begins with a Z) which seems to be doing well with little involvement from myself. I just drop in from time to time, see that my total investment is increasing as expected, and that there’s not an unusual number of late repayments. I don’t have to decide which loan I want to be in, or how much, that’s all taken care of for me by the platform.
Now, SS seems to be a little different in that I get to choose which loans I want to be involved in, and how much (within reason and demand). Apart from that, would I be right in thinking that I don’t have to do too much analysis of whether the loans are ”risky” or “bad”? If they weren’t “good” they wouldn’t have made it onto SS at all, would they?
I think what I’m saying is “Is SS for the unsophisticated investor who just wants to put his money in and take the 1% a month with low’ish risk?” or is it really for the investor with the time and inclination to do lots of research and analysis? Am I OK taking a spread approach and continue to load a few hundred in each loan that becomes available?
Cheers!
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 10, 2016 11:44:17 GMT
Hi all, Newbie here, get ready for the stupid questions! To let you know where I am with SS; I have a few, small (couple of £hundred) loans put on over the last month with a view to increasing to quite a few £k overall in a month or so. I like the ease of doing it, and the clear website, showing what’s going on. I have also been impressed with the responses to questions that I have asked directly by email. I’m not a sophisticated investor, but have some cash that’s either making me next to nothing in the bank, or bouncing up and down all over the place on the stock market. I’m looking for something that’s a bit more profitable, without the volatility of stocks (aren’t we all)! I have investments in another p2p scheme (begins with a Z) which seems to be doing well with little involvement from myself. I just drop in from time to time, see that my total investment is increasing as expected, and that there’s not an unusual number of late repayments. I don’t have to decide which loan I want to be in, or how much, that’s all taken care of for me by the platform. Now, SS seems to be a little different in that I get to choose which loans I want to be involved in, and how much (within reason and demand). Apart from that, would I be right in thinking that I don’t have to do too much analysis of whether the loans are ”risky” or “bad”? If they weren’t “good” they wouldn’t have made it onto SS at all, would they? I think what I’m saying is “Is SS for the unsophisticated investor who just wants to put his money in and take the 1% a month with low’ish risk?” or is it really for the investor with the time and inclination to do lots of research and analysis? Am I OK taking a spread approach and continue to load a few hundred in each loan that becomes available? Cheers! I would encourage all investors on SS to do DD; if you have little time to do your own comprehensive DD, then spend some time on these forums when loans are due to go live, and use the comments from other users a basis for "basic DD"..... Also, loans are coming thick and fast, and the SM is easy pickings ATM. This has not always been the case; for new investors in the last couple of month's it's been hard work to invest their money in SS. In the future, it may become hard to invest in the SM again, and as such you'll have to be patient with the pre-funding loans. It will defiantly take up more of your time and effort than other platforms. However, that is why you get the generous 12% rate  .
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Post by GSV3MIaC on Mar 10, 2016 11:58:07 GMT
I'd agree with most of that. If you want a really simple life ZOPA (spit!) or even better Ratesetter (IMO) are fine. SS (and MT, and others) are more complicated, arguably riskier, but offer higher returns (depending on possible losses, but if you invest in the stock market you know all about that). Sometimes with SS it is hard to buy in .. sometimes it is going to be hard to sell out (and don't assume loans will repay when they say they will - historically they don't). If you can live on the interest, fine .. if you might need to get the cash out in an emergency, then maybe less fine.
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adrianc
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Post by adrianc on Mar 10, 2016 12:57:07 GMT
Hi all, Newbie here, get ready for the stupid questions! The only stupid question is the one you don't ask. Well, mostly... Definitely not a stupid question! Pull up a chair, and sit down. Make yourself comfy. Now, have a good read through quite a few threads in here... The big question is how much you trust SS's due diligence. On the whole, it's very good, and we've all come to trust it. There have been a few cases where questions come up - have a read of the saga of PBL83 for one recent example. SS's communication can be... terse and cryptic. They've recently said that they did have more information on that, which they couldn't share for commercial confidentiality reasons, but which led them to believe it was perfectly good - but, of course, we aren't psychic. So we have to trust them. That loan showed both the strength and the limitations of DIY/crowd-sourcing DD. You need to know where to draw your own personal comfort lines. Everybody's are different. I'm comfy in some loans that some people won't touch, others are comfy in loans I don't like. Some are avoiding the new DFLs until we've got more of a clue where they're going. I've not even bothered going in-depth on some of the older loans, yet I'm comfy with them - but I don't particularly still want to be in a loan when it gets down to zero days remaining, and definitely not when it goes over. Others are happy with that. But remember, (broadly speaking) all the interest is paid for the booked duration of the loan up-front, so you're probably fairly safe - short of a borrower putting the shutters up completely - up until that point, no matter what.
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Post by portlandbill on Mar 10, 2016 16:31:47 GMT
Thanks for the replies.
I intend to cap my investment in SS at something in the order of 2% of my total investments and so I'm prepared to take a little risk to get the 12% reward, but I don't have the time nor ability to analyse each loan as it come up.
But I could/would invest considerably more, if I felt confident that I could just feed it in and leave it.
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Post by Deleted on Mar 10, 2016 16:43:43 GMT
I think you have to do DD on SS, some of the deals look good but I avoid at least half due to my nose telling me something is wrong. Alternatively, if you must loan to everything, put some of your profits to one side to pay for the loses if they come through.
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littleoldlady
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Post by littleoldlady on Mar 10, 2016 19:03:39 GMT
IMO (not other's though) diversification is better than trying to cherry pick the safer loans. SS do DD before we see the loan and they have far more information than we do. It is certainly not in their interests to have a loan go bad, apart from the reputational damage there is the (discretionary) provision fund to take the first hit. The PF may be SS's pension fund. Once you have 9 loans paying 12% for a year you can withstand a total loss on one of them and still be ahead of FSCS funds . As they are asset backed a total loss is unlikely and would probably involve fraud.
So my advice (as an unqualified blah blah) is to invest in as many loans as you can, at least until you have 20+ and do not do your own DD which would cause you to avoid some loans completely and so reduce diversification. By all means do your own DD in order to vary the amount you put in if you want to.
I expect you will find that this is a minority view on this forum, but we are not representative as we are self selecting to be interested in the nitty gritty and less willing to leave it all to SS.
Just MHO mind.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Mar 10, 2016 19:47:23 GMT
portlandbill I think there are two things to consider in terms of duedil Firstly make sure you understand the platform. On the surface SS looks simple and by & large it is but there are a few possible pitfalls lurking beneath the surface. Do you understand that about 50% of the loans are on different T&Cs for instance which would have a potential impact in the event of a default. Do you understand how the provision fund works? Are you aware that the indicated end date can be extended? Do you understand the difference in structure between DFLs & PBLs? These are all the sort of questions that are more relevant on a self-select platform than they might be on a fire & forget one like Z. Secondly I do think some due dilligence on the loans themselves is important, even if its just to ascertain which loans are to the same borrower which could potentially increase your exposure to default (not always that easy) [one borrower has 6 loans] and the nature of the security, real LTV rather than displayed. While you may be happy to invest in loans with limited DD, it may subsequently impact on how you manage your portfolio ie which loans you're happy to keep to term & beyond, which you will reduce or sell to fund new purchases.
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littleoldlady
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Post by littleoldlady on Mar 12, 2016 8:40:14 GMT
However, it may take some time for you to invest your 75k pot. Hi Dude 75,000 is a stupid amount of money for me, a if I am getting £450/ month then that is going to help no end with uni fees. Take care with money. Like knowing if it's £45K or £75K 
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pom
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Post by pom on Mar 12, 2016 9:41:25 GMT
Hi Dude Mum is in control of my moeny, and is also in control of my SS account. 75,000 is a stupid amount of money for me, and im only young, so I will be keepng my mum involved at every step. Im only young, and I know I will have to work for 12% interst, so im willing to work for it. Ive read every valuation report and have a list of loans I like. All these loans are are 50% LTV and I'm happy to wait for these loans to appare on the SM, or new loans (50%) on the prefund market. So no need for me to invest in riskyer LTV loans (i'm not old like you lot, so have time on my side ) Im in no hurry; im only young and the way I see it is that I want low risk high % return, and I know that I will need to work for it. I realy like maths & numbers (I want to go to uni to become an accountent or somthing in finance) and the way I see it, if I am getting £450/ month then that is going to help no end with uni fees. I just want to say thank you all. In my world I feel unwanted, but here I find helpfull people and it is a nice chnage Thanks Hi Shane, Although I'm rather older than you, I've been treading a similar path this last year or so, with a dramatic change to my finances after inheriting a sizeable sum from my grandparents. It's a very strange thing to go through I think as it's not something you can really talk to about with your friends who at best just won't understand, at worst could be jealous. So I remember the relief of finding this forum where I could openly discuss investments, and I'm really glad you found us. It sounds like you have a very sensible strategy worked out for yourself - my only comment would be to please consider diversifying to other platforms also, just in case something goes wrong with Saving Stream, or the property market collapses etc. Also if you haven't already, then you & your mum should perhaps get some tax advice - or at least get reading. You say she has control, but you don't say whether that is via a trust (which is great tax wise but the tax return forms are horrific at first sight!) or if the money's just invested in an account in her name (in which case HMRC will count it as her income for tax purposes). You also might want to consider starting a pension (!) Good luck 
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registerme
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Post by registerme on Mar 12, 2016 9:54:46 GMT
@shanectheman, just to echo what pom said, I would really consider diversifying. Don't put it all in p2p, and don't put it all on one p2p platform either, even if the rates seem to be very attractive. If there's one thing that is absolutely true about investing, it's that there will be a blow up. Diversifying means you significantly reduce the chances of that blow up hitting you especially hard - there are lots of other things you could consider that offer varying rates of return, with different risk profiles, over different amounts of time. You have the time, so use it to look around and read up . Also pom is spot on with her tax comments. HMRC will poke their nose in regardless (as is their right), and who's name an account in will be material. |
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Post by Deleted on Mar 12, 2016 11:07:54 GMT
" I am only investing in the loans that have good LTV" less than 50% Is that a good criteria? For instance, not all valuations are the same, some are based on the cost of the land only (as in a bare build) while others on the cost of a replacement build (as in a buy to let) since the valuation principles are different should you use such criteria for selection? If the deals are about jewelry the value could be the wholesale price, the retail price or the scrap price. Tricky. For me, there has to be a safe (ish) exit strategy for my money and if possible an early income stream to pay for the interest. Keep to baby steps for a bit, it is what I did. Uni fees, take care, uni fees are some of the cheapest loans you can take out. Have a read of www.moneysavingexpert.com/students/should-i-get-student-loan |
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Liz
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Post by Liz on Mar 12, 2016 11:26:25 GMT
Loans with LTV below 50%, and a first charge is rare on this platform.
Beware the low ltv's are often second charges, and not a true LTV.
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Post by carbonr1 on Mar 12, 2016 13:54:00 GMT
Something fishy about this, no parent in there right mind would ever let a 13 year old loose with75k
Q: Can children under 18 inherit?
A: Children cannot inherit until they reach the age of 18; below this age, the funds are held in Trust. If you think 18 is too young for your children to inherit a large sum of money, within a Will, you can specify that they do not receive the capital sum until a later age. They will, however, be entitled to receive any income from the trust fund as soon as they reach 18. Apart from this, the Trustees decide what income and/or capital can be used for the benefit of the children e.g. school fees.
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kaya
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Post by kaya on Mar 12, 2016 16:55:03 GMT
In my opinion Shane, SS is not the place for your inheritance cash, except playing with a thousand or two. Maybe share a few thousand amongst the likes of Zopa and Ratesetter, but put the rest somewhere safe, like a boring old bank, at least for a few years. 12% interest sounds great and is tempting, but that is because it is comparitively HIGH risk!
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