I apologize for the delay in my second quarter 2014 returns as the summer has changed some of my priorities. When you live in Wisconsin, it is important to take advantage of the nice weather while it lasts. My returns have slipped .85% from the last time I checked in April 2014. Since I have used FOLIOfn to buy notes for the penny note strategy, I rely on XIRR in order to calculate my returns. My strategy has remained about the same except for the small hiccup which affected P2P-Picks. Instead of letting my cash sit idle, I simply created a higher volume filter in Nickel Steamroller. I still keep an eye out for notes on FOLIOfn, but it is time consuming and I already have about $2500 worth of notes purchased.
I am consistently adding funds which means I won’t know my true returns for quite some time. However, with the addition of my Prosper account I should see some more progress as far as my average age goes when I report my third quarter returns. This is mainly due to me deploying most of my available funds to Prosper. My average age has actually not moved at all since my Q2 returns due to me continually adding to my Lending Club account. As you can see below, I’m still sitting at 5.8 months. Lending Club pegs my returns (as of July 22, 2014) at 12.96% – not far off my returns calculated with XIRR.
Below you can see where I fall into the curve related to my returns:
I often like to see what would happen given the worst case scenario – by assuming every note that is in grace period or worse is completely charged off. You can see those results below:
I’m still happy with my peer to peer lending investments and I’m excited to see where I end up long term. I am thinking a lot about how much I should really have invested in this asset class and still have yet to come up with my plan going forward. Mainly, the decision comes down to investing in the stock market with low cost index funds or adding to my peer to peer lending accounts. I’ve also considered purchasing more real estate, but I really am trying to focus on passive income.