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Author Topic: Thought this was interesting.

D
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Thought this was interesting.
OP: August 30, 2018, 11:00:00 PM
Thought some of you might find this interesting. 

So I have been withdrawing excess cash from my account since its peak value in Jan 2017.  I still invest in loans that meet my criteria, but I have always thought it would interesting to see how much money would be in the account once I withdrew all of my principal.  I know I know, it is the gain in the account, but never knew what that gain would be when the time came.  Based on my current rate of withdrawal, I am about 1.5 months from withdrawing all of my principal.  Currently I still have $33,154.71 to withdraw, then I will have no "skin" left in the game and it is all profit.  Today that profit would equal $180,165.99.  I will continue to invest in loans that meet my criteria, but I doubt I will ever add funds to my account again as LC shows no signs of returning to "hay days" / 10% returns I used to make.  I currently make 5% and for the risk involved with these loans that is not sufficient and will continue to move to other investments.  Saying that, my guess is (based on other accounts I oversee), my account will settle in around $125k and at that point the monthly payments generated will be sufficient to fund purchases of loans that meet my criteria.

Overall, I have been happy with my investment at LC, but now it is more work that it is worth.  I don't have proof of this as I have not done the analysis, but my guess is simply buying the S&P ETF with the funds I deposited into my LC account over the last 9 years would have been a lot more lucrative.

Notes on the account -
 - Account was opened in Dec 2009
 - Last deposit into account was in June 2016
 - Best month ever based on $ return.  $4,517 Oct 2016 (account worth $571k)
 - I have always been conservative, meaning more than 50% in A and B loans.  During most profitable time, over 80% was A and B.  Moved away from A's as interest rates fell.
 - Actively sell non performing loans.  A year or two ago, I did an in depth analysis on all the loans I had sold trying to figure out if I did the right thing.  At that point, I had saved myself right at $5k.  Meaning that if I never sold a single loan, I would have had an additional $5k in losses compared to what I did lose selling non performing loans.
 - Never bought more than $100 per loan

Enjoy.  Interested to hear other comments/thoughts.
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R
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Thought this was interesting.
#1: August 31, 2018, 11:00:00 PM
Thanks for the interesting post. Well done!
I'd guess in the top 1% performance of all accounts over that period.
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r
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Thought this was interesting.
#2: September 01, 2018, 11:00:00 PM
There is rarely a situation where A/B loans should outperform the stock market, especially when just compare the bull market part of the cycle.  If your money in LC has a risk profile that can be invested in the stock market, then it should probably be there instead
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l
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T
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Thought this was interesting.
#4: September 02, 2018, 11:00:00 PM
Thanks for the kind comments guys.  I did set out to find a non market correlated investment.  Unfortunately, I was looking for that non market correlated investment right as we were starting to save money and the market had just gone through the recession and there was no way I was going to put our savings into the market.  Turns out that is exactly what I should have done.  Oh well.  Lesson learned.

If returns would have held up to what they were (meaning net 8-10%) and they did not continue to lower interest rates, I think things would be totally different.  But LC went down a different road. 



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