Author Topic: What is the secret to success for investing in notes?  (Read 2246 times)

Jim G

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What is the secret to success for investing in notes?
« on: June 12, 2016, 11:01:22 AM »
Is it to constantly reinvest interest and principal until one has doubled or quadrupled the number of loans/notes they own in order to generate enough interest payments so that one day you can take withdrawals and wind down one's account in order to get principal back?  How long does that take? 

Seems like one has to be committed to buying and reinvesting principal and interest payments until they reach that critical mass of owning enough notes that pay interest to recoup their investment since once you buy a loan and if you wish to liquidate it you would be forced to do so at a discount through Folio. 

Am I correct in this simple analysis?

Thanks in advance.




jz451

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Re: What is the secret to success for investing in notes?
« Reply #1 on: June 12, 2016, 12:32:33 PM »
There is no secret sauce to be honest. It's just like any other investment where you continually put money in and let it grow over time. That might mean putting in an initial $10,000 and continuously adding like $500 or something every month, reinvesting the payments and letting the interest.

Just like any other investment you have to research what you want. You have to determine your risk tolerance and buy notes up to your threshold loan grade. The best thing to do is go to NSRplatform and Peercube to analyze the different charts offered and backtest different filter strategies you might have in mind. Automated investing options are available that select notes based on filters you make using LCs own service, Lending Robot, or Peercube.

If you are not willing to take the time to research and analyze different filter strategies, then this is not the type of investment for you and should stick to simple mutual funds and ETFs.

Larry321

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Re: What is the secret to success for investing in notes?
« Reply #2 on: June 12, 2016, 06:52:44 PM »
Jim,

I think your analysis is pretty accurate.
I invested a small amount of cash a few years ago, just to get comfortable with the platform.
Then, at some point, I slowly began transferring more money at $1,000 at a time, experiementing with both choosing the loans by reading the info on the loan request, and using the automatic investing feature.
Finally, I got to a point where every day, I would look to see what new loans were available and how much cash I had from payments.
About once a month, I transfer more cash into my acocunt.
My plan is to keep on funding more about more loans at $25 a pop.  At some point, I will stop buying 60 month loans, and will buy only 36 month loans. Then, at some later point, I will stop buying new loans and will transfers any cash out of LC.
I am hoping that LC gets through its current difficulties and stays up and running for a decade or two.

In short, keep on buying new loans at $25, transfer new money in every so often, and repeat.

:)

LC notes investor for 3 years

Bitcoin speculator

nmay2k

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Re: What is the secret to success for investing in notes?
« Reply #3 on: June 14, 2016, 10:54:14 PM »
Seems like one has to be committed to buying and reinvesting principal and interest payments until they reach that critical mass of owning enough notes that pay interest to recoup their investment since once you buy a loan and if you wish to liquidate it you would be forced to do so at a discount through Folio. 

Not all loans sold on folio are at a loss. There are people who buy them at a premium. Also if you hang on to them till they are paid-off, there nothing to recoup. It is hard to estimate how many loans are sold on folio at a premium because they may have simply been removed rather than sold.