I haven't done a Lending Club review since May. Before that, it was a full year since my last one. Back in May, I had an Adjusted Net Annualized Return of 7.18% which was up from 7.02% the year before. Here's where things stand now:
As you can see it's up above 7.50% (barely, but I'll take it).
It's a good move in such a short time. I'm not entirely sure what to attribute the move to, but I have been using Lending Club's automatic investing feature. I let them pick my loans on criteria that I choose. My criteria is extremely simple: loans that are grade D or lower with credit scores above 700. I'm sure that this isn't the most efficient criteria, but it does the job.
It tends to keep payments from other loans reinvested... except that every now and then I log in and see that I have a bunch of money available cash. For example, in the image above I have $100 just sitting there waiting for loans. I was able to find more than enough qualifying loans available. I'm not sure what's up, but I'm guessing it's human error on my part (I'm missing some tiny detail). In any case, the "set it and forget it" method has worked reasonably well.
There's another detail in the image above that may be easy to overlook. I've received $12,500+ in payments over the years in Lending Club. I sometimes here that it's risky because P2P lending is new, but my loans have now rolled over a couple of times. With more than 200 active loans, it's got some good diversification. The poop may hit the fan with the economy and change all this, but it hasn't happened yet. And if the economy takes a big hit as in that scenario, your stocks may lose even more.
I look at Lending Club as something that is differently correlated to my other investments (stocks, real estate), which is valuable to me. I would love to have more money in Lending Club, but saving in retirement accounts is about the most I can do at this point.
If you agree, sign up for Lending Club today and start earning a healthy interest rate on your money.
Next: Early Retirement with a Roth IRA Conversion Ladder