Nothing makes me feel thick... (£1000pm to invest)

jimjames

oatman wrote: »

Buy property. Don't go pensions, I was also ripped off like your parents. NEVER touch forex or any futures markets. Professionals only tell you about their profits. Financial markets are choppy and you are young. Stay close to cash/ liquidity.

Just because someone was ripped off doesn't mean everyone is. Surely it's even more important to check you're not doing the same rather than avoiding completely. Pensions are a great way to put money aside long term especially if your employer matches your payments and you can get 40% tax relief. Beats any other investment hands down when it's more than doubled as soon as made.
Totally agree about forex and futures but when you're young that's the time to be investing in conventional markets not just sticking to cash.

Thrugelmir

masonic wrote: »

. but this is also where the assets used to secure the loan come into play.

Assets in a fire sale are worth relatively little. A company paying a high rate of interest to secure funding has most likely exhausted it's standard lines of credit. Also ask yourself why the shareholders haven't injected their own money in the form of equity.

masonic

Thrugelmir wrote: »

Assets in a fire sale are worth relatively little. A company paying a high rate of interest to secure funding has most likely exhausted it's standard lines of credit. Also ask yourself why the shareholders haven't injected their own money in the form of equity.

Sometimes assets might be worth relatively little in that situation, and that's a risk that's well worth considering when going over the loan particulars and valuation. On one platform, there was one default among its portfolio of ~60 completed loans (this was a loan against a small care home, which was a going concern at the time the loan was made). In that case, sufficient money was raised from the sale and lenders were repaid in full (and with full interest I believe). Some platforms have provision funds, which may be able to step in for smaller loans, but not bigger loans. Some types of asset might be more difficult to sell during adverse economic conditions than others. Your point that there are risks around the assets is well taken.

In terms of your point about borrowers being most likely to have exhausted standard lines of credit, there are several instances I'm aware of in which a loan has been refinanced to a commercial lender within a relatively short period of time, or paid off using the proceeds of a sale of other assets. There are a number of plausible reasons why an asset rich borrower might enter into such an agreement that have no bearing on their credit worthiness. That's not to say there aren't examples of high risk borrowers who might be refinancing other debt or borrowing to keep a sinking ship afloat. Some care needs to be taken to evaluate loans. Some platforms seem to do a fairly good job of this, but I would not advocate anyone just throwing money into a loan without doing their own research. Then you have the more straightforward short-term 50% LTV loans secured on jewellery where the borrower will certainly not be a business and may well be high risk, but one can be reasonably confident in the loan security providing the valuation is reasonable.

oatman

Mistermeaner wrote: »

^ this is some of the worst advice you could possibly get

I was in the City for 35 years. I've seen plenty of experts , thank you.

oatman

jimjames wrote: »

Just because someone was ripped off doesn't mean everyone is. Surely it's even more important to check you're not doing the same rather than avoiding completely. Pensions are a great way to put money aside long term especially if your employer matches your payments and you can get 40% tax relief. Beats any other investment hands down when it's more than doubled as soon as made.
Totally agree about forex and futures but when you're young that's the time to be investing in conventional markets not just sticking to cash.

You wouldn't say that if you saw the pension advice from 35/40 years ago, the projections and results. I only said stay close to home for the time being. The bubble hasn't burst yet.

atush

oatman wrote: »

I was in the City for 35 years. I've seen plenty of experts , thank you.

In the city doing what exactly? Emptying the office bins?

Sure you might have made cash in the london market as you bought cheap, but your advice for a newbie is JUST plan bad.

eskbanker

oatman wrote: »

I was in the City for 35 years. I've seen plenty of experts , thank you.

Perhaps it might have been worth listening to them instead of looking at them?!

atush

oatman wrote: »

Buy property. Don't go pensions, I was also ripped off like your parents. NEVER touch forex or any futures markets. Professionals only tell you about their profits. Financial markets are choppy and you are young. Stay close to cash/ liquidity.

OP dont listen to this poster (well not the first sentence). He is right about forex/futures but not pensions. In any way shape or form.

He got 'ripped off' but doesn't say how or what his own actions contributed. We've had pensions for over 3 decades and all are doing just fine.

Mr_Costcutter

[QUOTE=atush;6924357
We've had pensions for over 3 decades and all are doing just fine.[/QUOTE]

Not ''everyone'' has been so lucky. Many pension funds have failed to deliver.

oatman

eskbanker wrote: »

Perhaps it might have been worth listening to them instead of looking at them?!

Ha ha good one! I did.... on pensions.