It wasn’t until last week until I truly appreciated the fact that my account was fully automated. I used to think automation wasn’t necessary. After all, I’m a software developer by trade and usually have my laptop within reach during the 4 pm or 8 pm CST note release times. However, last week I went on a road trip to South Carolina and camped along the way down south - not conducive to managing a p2p lending account that isn’t automated. I tried to coordinate a significant amount of capital (it’s all about perspective people) being invested while I was gone and see how long it would take to invest. It took less than a week, and my account was happily hovering around $25. Sure, some notes got cancelled, but any available cash was quickly put into another note during one of the four times Lending Club releases notes. This is the beauty of my pursuit of passive income.
My investments started on March 26, 2014 when the $1,000 made it into my Lending Club account. Since then, 26 notes out of the 40 notes have been issued. This is a pretty good result in my opinion since it hasn’t even been 2 weeks since the investments started and it took several days to invest in all of the notes.
Here was my criteria for this small trial:
BlueVestment Automation
- P2P- Picks Profit Maximizer (Top 5%, C,D)
- P2P-Picks Loss Minimizer (Top 5%, C)
This is the first time that I have used the loss minimizer and I did so simply out of my own curiosity of the notes that would be picked. It seems as though the C grade notes for loss minimizer are fairly rare compared to the profit maximizer.
Further reading: If you want to see the portfolio performance of the owner of P2P-Picks, check it on the Lend Academy Forum thread.
Note: You can read more about these strategies on the P2P-Picks website:
I could have easily invested more if I loosened the top percent filter up a little bit. I would be open to doing this, but it just isn’t necessary at the moment since my available cash is always getting depleted. In addition to this, I invested in several notes with Nickel Steamroller. You can view the strategy similar to what I am using here.
My thoughts about loan availability right now? If anyone is liquidating their account due to the influx of these institutional investors, they are simply not exploring all avenues of investing in Lending Club. A quick look through any of the p2p lending blogs (especially this one you’re reading now) will provide anyone with enough information to be successful. The truth is that companies like BlueVestment are empowering the retail investor and allow us to compete with the big guys. Loan availability is not an issue as long as you’re automating. After all, IT IS the key to investing in p2p lending.
(Shout out to Nickel Steamroller, BlueVestment and P2P-Picks for making analytics and automation possible (and easy) - I appreciate the service you provide for retail investors and I’m sure there are many other people who feel the same way)
It feels good to be back from vacation and writing again. I feel refreshed and as motivated as ever. I hope you enjoy the content I have coming your way!
Really enjoyed this blog entry and I’ve been on this exact same path starting a couple weeks back.
Thanks for the feedback and stopping by. Not having to worry about idle cash sure is a great feeling. I think we will see even more options for automation as well as some existing tools becoming more mature shortly.
shuhai says
Like your blogs and keep it up. Thank you. Ryan. ! I dont like automative investments as I have over 150k investment on lending club and I only pick the notes that fit my standards. but for small account like yours, it is awesome features.
Shuhai
Shuhai, do you login during release times and look through in detail each individual note you invest in? I’m curious if there is anything you would like to see from the third party tools that might convince you to automate your investment?
shuhai says
hi, Ryan, I just started a month ago with lending club. Yes, I log in during the release time .mainly, 10am, 2pm and 6pm. I look three main features. ( Gross income to monthly payment ration: I am looking for less than 10%, the lesser the ration is , the better. the second is delinquencies , public record, i am looking for zero or 1. the third is job title and length of employment. I am looking for stable job like teachers, government employees. the min length of employment is great than 4.
I am looking for the each note and I feel noxious after so many notes to look up. However, the automate tools cannt fulfill my requirements . I feel I am in the black friday morning, and when the store open, i run to the merchandises that i wanted and so many other pepole want the same thing. . that is how high demanding notes are when they released in the first couple minutes. I cannt and dont have enough times to look the grade D. E. F.G notes , most those notes sold out in less than 5 minutes after their release. . so, I mainly focus on grade A. B. C. .
On the other hand, if you look the notes not sold out on the platform. you will find many notes just do not make senses to me. for example, how could somebody borrow $30,000 when their revolving credit balance is $3000. and the loan purpose is the credit card refinancing . Especially. the debt to income ration is not verified and we have no ideas knows the debt to income ratio is front-end ratio or back end ratio.
If i use the automate features. , i am afraid i get too much bad notes . What do you think. when the money is small amount, the automate can help you grab the D.E.F.G notes , when the investment is huge. I dont see the big advantages other than save times. I have lot of time in my hand. I am day trader and time is on my side.
Thank you for asking . Happy investing.
SHuhai
I think it all depends on how much you are investing per note. Since I only invest $25 per note, it’s hard for me to say if it is easy to invest for example $500 per note. I know Peter over at Lend Academy has had success with investing a significant amount. You can see his accounts (and returns) here:
http://www.lendacademy.com/my-returns-at-lending-club-and-prosper/
If you are looking for less risk, A,B,C notes might be a good strategy. The statistics show on Lending Club’s site that historic returns are better on lower grade notes as long as you stay diversified which is why I continue to invest in grades C or lower. It takes time to closely look at each note and by the time you decide to invest notes will be gone and you are left with the leftovers (probably more options in the better grades) - there are definitely trade offs.
If you haven’t seen these charts before, they are worth looking at:
https://www.lendingclub.com/info/statistics-performance.action
If job title is something that is necessary for your strategy then automation isn’t an option. If I had the time and I wanted to manually select loans, I’d probably use the shopping cart trick to pick up notes during release times. Basically, you have a set filter and you refresh as soon as notes are released. Once loans show up, add as many as you can to your cart. You can then take a closer look and toss out the ones you don’t want. Thanks for sharing details on how you invest!
shuhai says
Hi, Ryan, Thanks for sharing your insights . I just started to use the shopping cart since last week. and it is great ideas. but the shopping cart also has limitation, if the orders in the shopping carts do not go ahead for order after 10 minutes or so. the orders will discharged from the cart. I use the shopping cart to try to catch some D.E.F.G grades notes. As much as I can .
I have so far over 3600 notes and only 2000 notes are invested so far. ,the rest are under review or in funding. in average , they will invest around $3000- 8000 a day . over those notes, A. B note I invest $75 per notes maximum because of the rounding advantages , c. d. e.f.g are all $25 per note.
Yes, I heard the lending club now can allow a investor buy a whole note. but i don’t like to put all the money in the basket. I will stick to $25-$75 right now.
Thanks again for the links and great tips.
SHuhai