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Lending Club Performance Update

January 29, 2013 by Mr. 1500 Days 3 Comments

I see P2P lending as a critical part of my retirement portfolio and currently have accounts with both Prosper and Lending Club. I’ll provide monthly performance and strategy updates. For now, I’m going to focus on Lending Club.

Background and strategy change
I started investing with Lending Club in April of 2011. While I learned the platform, I started off very conservatively and only invested in very safe notes (A and B grades) trying to avoid defaults. The notes do have low default rates, but as you would expect, they also pay out far less than the riskier grades. I decided to change my strategy. A look at Lending Club’s statistics page shows that the lowly grade F notes actually have the highest rate of return. So, while you’ll have more defaults, the much higher ROI more than compensates.

Goals
I’m happy with a 10% return. This is similar to what the stock market historically does. However, I think that I’ll actually be able to do a bit better than that. Even starting off very conservatively, I’m doing almost 12%. Once my A and B loans start giving way to D-F, I should see a bump up.

Wooo, look at those returns!
Wooo, look at those returns!

To start investing in riskier loans, I’m using the strategies from Brave New Life and the excellent Lend Academy. I’m buying loans with each strategy and sorting them into a separate portfolio so I can track their individual progress. It will take me a while to ramp up these investments, so I won’t have good statistics for a while. Finally, each time I post an update, I’ll add to the chart below. That way, it will be easy for you to see my progress. *The website, Nickel Streamroller has a portfolio analyzer that takes into account late loans. Some would argue that this is a better indicator or ROI.

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Filed Under: P2P Lending, Performance, Saving and Investing Money Tagged With: earningmoney, lendingclub, p2plending

Reader Interactions

Comments

  1. Jane Savers @ The Money Puzzle says

    January 30, 2013 at 1:47 am

    Are there any Canadian readers with p2p lending experience? I can find so much good information on American rates and sites but everything Canadian looks sketchy.

    We Canadians have our share of sketchy operators but I can’t imagine that p2p isn’t operating as a good, honest business somewhere in Canada.

    Reply
    • Dan Wardle says

      November 20, 2019 at 8:33 am

      Lendingloop.com is similar for Canadians.

      Reply
  2. Jef says

    February 25, 2016 at 9:11 pm

    Awesome stuff, thanks for documenting and I’ll be sure to keep an eye on this as I go through your archives :)!

    Reply

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Freedom!

My goal was to build a portfolio of $1,000,000 by February of 2017; 1500 days from the birth of this blog (January 1, 2013). And hey look, I’ve since retired!

Investments only
1/1/13 (The Start): $586,043
1/1/14 (1 Yr Later): $869,635
1/1/15 (2 Yrs Later): $987,351
1/1/16 (3 Yrs Later): $1,057,961
1/1/17 (4 Yrs Later): $1,257,128
1/1/18 (5 Yrs Later): $1,527,701
1/1/19 (6 Yrs Later): $1,549,440
1/1/20 (7 Yrs Later): $2,035,040*
1/1/21 (8 Yrs Later): $3,379,746**
1/1/22 (8 Yrs Later): $4,762,642

2022: Investments only
1/1: $4,762,642
2/1: $4,404,447
3/1: $4,214,068
4/1: $4,499,622
5/1: $4,007,476

Overall
2022 investment gains: -$755,166
Investment gains since 1/1/2013: $3,421,433
Net worth***: $4,237,476

* The big jump between 2019 and 2020 was partly because we bought another home, but kept the previous (much more expensive) one as a rental. We have since sold it.

** Tesla.

*** Includes our primary home equity in addition to our investment portfolio.

Finally, we still have about $290,000 in mortgage debt (which I love!). No regrets about the debts!

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Disclaimer

Investing is risky business. The information contained on this site is for informational purposes only. As with all matters financial, proceed with caution. Do your research and seek professional advice.

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