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Many people don't trust themselves to invest (or lend) so they leave it to others. Independent Financial Advisers can be helpful with advising on a range of customers about their options, relevant to their circumstances. We believe, that with little study and research, anyone can learn the basic investment skills, to understand risk and reward. One of the things our lenders love is receiving interest payments each month. Many investments don't pay interest monthly, but the borrowers using our platform repay their loan on a Direct Debit. So as you collect this repayment onto your online balance, you can re-lend them to other businesses. This is known as compounding. (Where you can earn interest on previous interest earnings). Many other platforms will encourage you to be passive about investing, offering little information about the businesses. They sell their service on ease, but they also tend to pay out less. By making a little effort, you can earn considerably more. We'll show you how, but before we do, have a look at the evidence. Here is a histogram of Net Returns for lenders as at October 12th 2018. (a live version is on our stats page, under the Net Returns tab) From this chart, you can see the green line peaks from the 3-4% segment and continues to be high until the 9-10% segment. This shows how most lenders are earning between 3% and 10%, but notice how 85 lenders are earning over 20% (on the far right). This article explains how they do it, so you can learn from their investment strategies.

Invest your money the savvy way

Read our 10 tips on peer to peer lending - This article covers some key guidance on strategies that have proven to work. Understanding how your portfolio matures is important. With any platform, there's a honeymoon period for newbies, but there's also a hard phase around year's 2-4 where you have sustained your first defaults but not had any recoveries. In this article, Kylie writes about various phases in the journey to mature investing. It's a good read.

Many happy returns

When you see a business with a unique idea or product, take a minute to consider who their target customers are. If you know anyone suitable, why not buy them a gift or simply make a referral. Word of mouth marketing is so powerful. Sometimes a new customer can make the difference to a business surviving. This is especially true of seasonal businesses, where they may be vulnerable out of season. Like the facebook page, follow them on Twitter, share the videos, be an ambassador for your borrowers, they will love you for it.

Getting good at investing is addictive

Did you know one of our top lenders retired early to invest full time on our platform? Gross earnings are shown below, (from a peak capital employed of: £624,000). Being smart about peer-to-business lending allowed them to earn more in interest than most people's salary!

• 2013 - (the first year was a part-year) - £23,945.89
• 2014 - £99,259.85
• 2015 - £84,114.08
• 2016 - £106,923.64
• 2017 - £119,534.66
• 2018 - £75,884.59 (part year until the 12th October)

It has not all been rosy, over the six years this lender has also had a £105,562.93 loss from bad and doubtful debt. So their profit is £509,662.71 - £105,562.93 = £404,099.78 before fees and taxes. This lender has an average weighted Net Return of 12.74%, by being diligent about lending decisions, they can support a great standard of living from a few hours work each day. Notice also how 33 lenders (on the far left) have a Net Return of < -20%. It is possible to lose money if you are not careful. Investing for higher returns carries some risks. For example, lending to inexperienced business people, a business you don't understand, offering little security on the loan, is not a good idea. Notice that the red line (lenders who invest over £5,000) and the blue line (lenders with more than 10 loans).

Understand the Risks

The above figures are taken from actual lenders from rebuildingsociety.com during various stages of their investment history with the platform. Remember that past returns are not indicative of future returns and your own experience may vary. If you are unfamiliar with the risks of peer-to-peer lending, read more here. Overall, our past performance has been good for most lenders, but that could change. For example in an economic downturn, not all businesses will survive. The best way to learn is by doing, open an account today to get started, you can try lending from as little as £10 on each loan. To learn more about lending visit our Lender Library.