cmonkey's journal

Where are you and where are you going?
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jennypenny
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Re: cmonkey's journal

Post by jennypenny »

@thrifty++ -- There have been some recent threads (like this one) about P2P lending. Dragline has posted quite a bit about it if you want to search his posts.

thrifty++
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Re: cmonkey's journal

Post by thrifty++ »

great thanks Jennypenny! That's a really good list of commentary on that page. P2P lending sounds really fun but not without risk. But I guess that's why the potential returns are quite high.

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

Yes I have had 2 charge offs at this point and have 1 more that is in default and is probably going to charge off. It has brought down my ROI by about .75% at this point.
thrifty++ wrote:great thanks Jennypenny! That's a really good list of commentary on that page. P2P lending sounds really fun but not without risk. But I guess that's why the potential returns are quite high.
Yes it can be risky like any investment, but once you learn how to do it, its not that bad. Long term returns are settling into the 9-11% range on the high end (for very focused investors) and 5%-8% on the low end (for passive investors with less strict criteria). I have based my projections of returns on an average 9% return and eventually living on a 7% withdrawal rate. If things change I will adjust. Lot of analysis has been done by dedicated people particularly on Lending Club statistics.

The general consensus is that returns follow a sloping pattern that matures after about 10-18 months, given a set investment interval. So for example, I invested a large chunk of money back in February of this year. That means that starting in November my ROI would have settled downward (which I am seeing) and by June 2016 would have stabilized and not drop anymore. Since I am now investing again (and regularly) that now resets to 10 months from now so my returns will probably start dropping late this year and will stabilize by 2017 or so.

I wrote down my strategy in that post that jennypenny linked to but it has changed slightly since then. I have also started using Lending Club's Automatic Investment tool and so far it is doing a great job.

Modified from that post -

You need a minimum of 100 notes with $25 in each note to consider yourself out of "risky" territory. I would recommend 200 notes minimum.

Also don't just pick any random note. Here's my method.

NEVER pick A-B. For A and B the interest rate is not worth the default risk.

D-G loans only with the following weights - D - 30% E - 35% F - 15% G - 20%
Up to 3 delinquencies
0 inquires
categories - debt/loan consolidation, medical, home improvement, renewable energy, wedding expenses, moving expenses and home downpayment
Income greater than $5,000/month
$25 MAX per loan


This strategy mostly targets upper middle class folks that are used to paying out large debt payments already. The rest of it just expands the spotlight of loans I can invest in and doesn't do much to historical ROI.

I updated my loan grades and categories based on some analysis at nickelsteamroller. The categories that I excluded have historically reduced ROI more than the others. Same with how I weighted the loan grades. F is the worst performing followed by G so they are weighted lower than D and E.

I might have to add C grade loans to the mix someday down the road if the number of loans becomes tight. Right now it seems like about 20-30 loans per day become available in my filter.

I think my historical ROI (from nickelsteamroller) is somewhere around 11-12% based on my filter so I am hopeful I'll stay well above my projection numbers.

thrifty++
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Re: cmonkey's journal

Post by thrifty++ »

Thanks for sharing your strategy cmonkey. It looks so fun being able to select your own debtors. As such a frugal person I find it hard to believe there is such a rich market of middle class people who draw debt to spend on consumption items - but I guess that's how the world works nowadays. There is no secondary market for p2p in NZ yet because it is so new here. So feels a little bit more risky to me. But Im going to investigate and start playing soon :)

henrik
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Re: cmonkey's journal

Post by henrik »

@cmonkey - I am not questioning your criteria, but it seems absurd that someone with income > $5,000/month would be in the market for expensive consumption credit:)

Dragline
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Re: cmonkey's journal

Post by Dragline »

Oh, you can find a steady stream that make over $10K per month that want to borrow. Call them the "anti-ERE" crowd. There really are a lot of people out there who live to consume, no matter how much they make.

I have an experimental portfolio that's composed of C-Gs that rent and make over $10K per month and have 0 or 1 inquiries. It's doing alright so far, but its not old enough to draw any conclusions.

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

+1 to what Dragline said. I once saw someone taking out a debt consolidation loan for 35k who had a verified income of 30-35k per month. Their job title was 'Senior VP'. How can anyone be that stupid with money? :?

More than 80% of my new loans are debt consolidation with income over 5k monthly. Considering the consumer credit market is something like 3.5 trillion we have quite a lot of ......prospects. :D

Ydobon
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Re: cmonkey's journal

Post by Ydobon »

cmonkey wrote:+1 to what Dragline said. I once saw someone taking out a debt consolidation loan for 35k who had a verified income of 30-35k per month. Their job title was 'Senior VP'. How can anyone be that stupid with money? :?
I suspect that people with very high income are quite different from you and I and it will all relate to cashflow to help provide for their massive 'wants' lists. We might order takeout pizza, they'll fly to Italy for a weekend and stay in a palatial suite, that sort of thing :roll:

If they want to pay you interest, who are you to complain? :D

The irony of the fact that I am providing P2P loans for people who probably earn several times my salary is not wasted on me, we are inverting the paradigm. Or maybe we're just virtual pawn shop owners.

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

Well, the 'deed' is done. We culled our two cuckoo maran males last night simply because they were turning into very aggressive birds toward us and the hens.

I will not lie by saying I didn't get a little emotional after the fact. It really is different when you kill an animal you have raised from day 1, there is no way to describe it. :( In fact, both the DW and I felt emotionally and physically drained before we even started. After they were dead, I had these weird sensations while looking at their lifeless bodies, thinking that I had imagined or dreamed all along that they were once alive and that they were just stuffed toys/mannequins or something. It was really, really weird.

We opted for the easiest/quickest/cleanest method of killing just because it was my first time. I didn't want anything to go wrong and the chicken to suffer. Breaking the neck via broomstick on the ground. They went very peacefully in the blink of an eye, they didn't even know what was going on.

Overall, we enjoyed our meal last night. They were very large birds (we put one in the freezer and cooked the other) at just over 3 LBs each (after gutting) and the drumsticks reminded me of turkey legs from the fair. The dark meat was quite tough considering they were only 4.5 months old. I credit the fact that they were not cooped up in a cage all day eating corn but could run around and eat bugs and grass. More natural texture and VERY lean, similar to grass fed beef.

This was the first meal we've ever had that came 100% from our homestead and contained meat. :D

Image

Ydobon
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Re: cmonkey's journal

Post by Ydobon »

Sounds tough, but a valuable experience, I don't think that we meat eaters give enough thought to where our food has come from. If we were a bit closer to the source, I suspect that we all might eat a little bit less.

Looks tasty, maybe try confiting the other one if the meat is a little tough, it could become part of a glorious autumn/winter dish :)

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

@Ydobon, agreed it was very valuable. I will never think of the meat I eat in the same way again and even though we don't eat a tremendous amount of meat now, we will probably eat less. Eventually we will produce 100% of our meat with broilers, rabbits, fish.

I hadn't heard of confiting until now, but that sounds pretty tasty. I feel like we need to do something special with the next chicken and that would fit the bill.

llorona
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Re: cmonkey's journal

Post by llorona »

Thank you for sharing your experience. I have a lot of respect for what you did and how you did it. It's a good thing that it was difficult and emotional for you. Killing shouldn't be easy, even if it serves a purpose like feeding you.

Dave
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Re: cmonkey's journal

Post by Dave »

Although I have never raised animals, I have hunted on and off my entire life. Some hunters seem to be immune to those feelings (especially trophy hunters, who I strongly differentiate myself from), but I always feel pensive after taking a life. It seems healthy to me to reflect that you took a life to support your own, and what that means exactly.

Congratulations on creating an entirely home-grown meal, meat and all. That is impressive homesteading :-D.

cmonkey
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So I found a small treasure today....

Post by cmonkey »

Thanks llorona & Dave. Our chickens mean the world to us. We have decided to do what's best for the hens as opposed to us and so we are assessing which rooster is going to best for them. The rooster that gives the best flock dynamic. The two we butchered were definitely not good for the hens.

In other news, I found a little something when I came home from work. :D Its been a busy week in chicken land!

Image

vexed87
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Re: cmonkey's journal

Post by vexed87 »

I hope it tastes as good as it looks! :)

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

Oh it was quite amazing lightly fried with a small slice of butter! Much 'denser/richer' tasting (if that makes sense) than store bought eggs. Even the eggs we buy (local pasture raised) don't compare. We are so excited. :) I normally take a dish of oatmeal/fruit each morning to work but I'm planning to add in a few hard boiled eggs to the mix each day.

cmonkey
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Re: cmonkey's journal

Post by cmonkey »

We were talking about how ridiculous it is to consider folks making more than 5K/month income taking out consumption loans and I had mentioned one of the outliers of that group.

Well I found another and just had to share it as proof that these people exist and are willing to pay us. :roll:

Image

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jennypenny
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Re: cmonkey's journal

Post by jennypenny »

cmonkey wrote: Here are pictures of the sandwich cake the DW made as the main attraction. It was made from a couple of round loaves of bread with chicken salad and cucumbers sandwiched between and covered with a cream cheese "frosting" and garnished with edible garden flowers. It was amazing. She has real talent for these kinds of things, someone even wants to buy one from her. Everyone really loved it and found it incredible that we had made the bread...which we found strange because we make everything from scratch. :?

Image
@cmonkey--I have to bring something to a party on Sunday and I'd love to try something like that. Any chance you could share the instructions or point me toward them on the interwebs??

thrifty++
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Re: cmonkey's journal

Post by thrifty++ »

thrifty my god that lenders profile is crazy. Such a massive income wasting money on borrowing money. But I would definitely lend money to them lol

Do you think Lending Club takes legal action to recover unpaid debts on behalf of the lenders?

spoonman
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Re: cmonkey's journal

Post by spoonman »

I'll like to add to thrifty++'s interest in learning about your experience with LC. My big question is, how big of a headache is LC at tax time? Is onerous or manageable?

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