Quote: (09-07-2012 12:41 PM)MikeCF Wrote:
Thanks for the tips. I know WestCoast was big on this site, so I wonder whether his take has changed.
My take is still the same and it should remain as a piece of a diversified portfolio because you're acting as a lender instead of investing in say a bank. His post is accurate and I mentioned previously that the numbers were "wall streeted out" ie, inflated. I'd recommend buying a ton of notes in $25 increments. Ex: @ Texas made, I would reinvest my interest received say "$50" monthly and ALWAYS buy 2 notes instead of 1. If I got $250 I would buy 10 notes etc. I do not recommend trying to read all those filings, what you are doing on the site is "becoming a bank". Banks make $$$ by borrowing short and lending long, you want to diversify out long.
Lending club is a hedge against two things, one change in dividend taxes (if they change it to be the same, you're in a safer asset). And two, interest rates, unlike a regular bond with call provisions it's a consumer note.
You're not getting rich with lending club but you're not getting raped by owning 1.6% bond yields (also taxed @ same rate as lending club). Part of investing is being able to take risk and secondly asking "what is my other options". In terms of Interest its not bad.
If you want high beta go buy medical stocks!
You should have tiers of cash
"unwilling to lose" = checking account
"okay sitting on it" = bonds and divys
"long-term" = equities
"Stripper and blow" = medical stocks and high beta equities
I recommend tiers for everyone because even millionaires can go broke sitting in cash, easy to spend when you see the 0's there. So by forcing yourself with a slight nudge to lock up you're doing yourself a psychological favor. The second extreme is idiots trying to get 100% returns... All the time... You'll be burned in both cases.