Saturday, April 19, 2014

Lending Club update Q1-2014

I had originally tested out Lending Club back in 2009. At that time, I didn't like their tax reporting and their software was lacking. However they were new so I did want to give them some time to improve and so in January of this year I came back to them. The first quarter is up so lets take a look at how its going.


Strategy: I previously discussed my strategy in what I would be picking.
High yield notes that have aged at least 10 months. The vast majority of defaults occur in that time.
I plan to run this account up to 100 notes.
Currently I have 23 but I placed an order today for 10 more and have funds coming for an additional 10. I am hoping by July that I will hit my 100 mark.

Fees: Fees were my #1 concern as that is taken out of profit. I had estimated 3% but admitted that it could well have been that high as I was buying and selling on the market frequently back in 2009. Currently, I am calculating it based upon the interest I received. I want to know how much net profit I make and how much its going to cost me to make that profit.

Results: I returned to my account in January and Lending Club estimating an 8.8% net yield.
I've already improved it and am now in the average yield range. I expect it to continue to rise over time assuming my screening strategy works out...



January: January was a scratch month so to speak as I was only transferring money.



February: My first month of payments.



Ok so I already see a problem with Lending Club's report. It shows I ended January at just over $100 yet I start February with $314. I had a deposit of $200 land on 1-30-14 but that should clearly be in January's total. Seeing as how it takes Lending Club a full week to generate this statement this error is pretty weak.

For fees I paid $0.13 for $4.86 in interest received. 2.67% fees is what I am paying here.



March:


Well they fixed January's bar chart total and all the account totals for all three month's starting and ending totals are matching up. The fees though are incorrect.
There is no way that I added more funds, bought more notes, and paid less fees then the previous month without having any late or delayed payments, which I didn't. I went through the account activity section and counted up $0.18 in fees from 3-1 through 3-31 which is to be expected as I had 18 notes worth of payments that month.
$0.18 paid on $7.02 of interest comes to 2.56% paid in fees which is pretty close to last month.

I have to admit that at this point I am rather concerned at the reliability of their reports.The yield is great but to have inaccurate financial reporting is inexcusable. As this is only a small portion of my portfolio though, I will continue to monitor.


Disclaimer: The investments and trades discussed are not recommendations for others. I am not a financial planner, financial adviser, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.

3 comments:

  1. Looks like you're off to a great start with LC! I normally don't look at the monthly reports, but maybe I should? Anyways I'll be doing a LC update sometime soon. All the best!

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    Replies
    1. I'm in communication with LC right now. Looks like they changed how they are reporting their numbers starting in March. I'll make a post about it when I check everything out.
      Thanks for stopping by CI!

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