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Investing

i wrote about my adventure with Lending Loop a year orso ago, I know many folks have had positive experiences with them but I’ve chosen this week to stop investing in any loans and withdraw funds as they become available, it will take some time  to get all my principal back… assuming the majority of borrowers repay as planned.

So, why am I withdrawing?

I’m not super happy with the process and how companies appear to be vetted. You can read about Lending Loops vetting process here, and it all sounds decent enough, better than what I could do anyway.  For the first handful of loans I did them manually, I had a go at researching the company and decided which amount to put where. After that I chose to go with auto-lend, where an amount you set is automatically invested.

Currently my profits look like this;

You can also see my gross yield here;

Which looks pretty good, for the about $4,200-ish I have had invested. BUT that 11.5% gross yield is BEFORE the Lending Loop fees, which are 1.5%, and also before any defaulted loans… which is my sore point here.

5 out of these 6 loans were invested on auto-lend. $265.75 is currently delinquent/in default, the majority I don’t have high hopes for and expect a write-off based on the notes. That certainly reduces my $425.17 life time earnings… down to $159.42 between November 2016 and January 2019…. Now I did write previously that I expected some defaults, but ouch, that’s more than I had hoped for!

In comparison if I deposited $4,200 in a high interest savings account, and moved it along to wherever the highest rates were, averaging about 2.75%, I would have earned $265 in the same time frame and would continue to until I withdrew. 

Now I started depositing funds to Lending Loop in November 2016 with my first $200, and gradually kept adding until my last deposit at the start of 2018 so I did not have $4,000 invested during that entire time, which makes the math a little bit hard to do to compare with straight-up savings instead.  I am ALSO not able to forecast what portion of the $3,900 I still have invested will default and what my earnings will be on that over the coming years of repayment, my last loan will not mature until 2023-11-07. However, I do know there will be SOME defaults and I also know that it’s hard to try to beat any market. 😉

My summary? Lending-loop was a fun adventure, I haven’t actually lost any money overall yet. Will I continue to invest? No. Would I recommend it? Meh, it depends! Are you up for an adventure?

My personal preference is probably the more boring high interest savings or occasional splurge on an ETF. 😳

I am rewriting this post because I already wrote it and it disappeared into the bowels of the internets. So. 🙂

I opened an account with Lending Loop in December 2016 and made my first deposit on December 28th. 

I LOVE the idea of Lending Loop and so far I LOVE the execution of Lending Loop. As a past and current small business owner I know how hard it can be to obtain reasonably priced financing through conventional methods and fully understand that there is a market for P2P lending. Do I believe that debt is a necessity? No, is it useful? Yes.

Consequently I’ve made investments  in a variety of businesses, from $25 up to $325 depending on the risk band and company information provided and scoured off the internet. Most of the loans are in between those two numbers.

I earned $91.64 with Lending Loop this year and made deposits to a total of $2,936.33 and investments throughout the year. If you translate this in hours I spent on reading and learning and thinking about the whole thing… that’s definitely less than minimum wage but as I invest more that will go up. 🙂

The majority; 41% of my investments are A’s, 35% B/B+ and the remainder divided between C (more heavily) and D, the least. I do not intend to make any further investments in D-rated loans or riskier. It’s not my style, I’m uncomfortable with it and so here we are. I aim to keep my gross yield hovering around 10%, which after somewhere around 25% tax should net, haha obviously… 7.5%, not accounting for any delinquencies of which there were none this year! I do expect to get stuck with some next year.

I intend to deposit a further $2,000 to lending loop next week and will invest it gradually through the year as I have this year.

I’m very excited about it!

Maybe they'll make me rich some day.

Maybe they’ll make me rich some day.

Last year I blogged about opening a questrade account, and then I blogged about buying stocks earlier this year. 

This week I decided to shut down my Questrade account for good for several reasons. The primary reason being that I just don’t have the money in the coming year(s) to sink into it. I was running into an inactivity fee of 19.95 every quarter which can be avoided by having more money in the account and trading once every quarter. I just couldn’t swing it, so whatever gains I was seeing were being eroded by these fees.

The second reason for shutting down the account is that I just didn’t have the time or interest to put into it. Whenever I find spare time, the last thing I want to do is research stocks. I do think it’s beneficial to

money money money

money money money

understand more about how the stockmarket works, and how to trade but having cash to  blow is crucial to that learning curve. Which is the third and final reason I had to shut ‘er down: I needed the money to sink into my house (It paid for part of this) which for me, for now, is a better investment.

Ever hear that saying that a house is a money pit? Yeah, they can be. So, in summary, roughly 14 months ago I put $1000.00 into a TFSA with Questrade. I purchased PWT and ENB and this week I cashed out at $982.23. My gain on the stocks was $22.21 but due to 2 inactivity fees my bottom line after 14 months is a loss of -$17.77. I got a good deal, $20 isn’t very much for what I learned through the entire thing. 🙂 (and this is not to say anything about Questrade in any way, in fact, I’ll use them again in the future… when I do have money to put into it regularly. I had the right idea, but the wrong timing)