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)