A frugal early retirement ....

kidmugsy

marvinandroid wrote: »

Exactly right - it was Lord Turner. I'll look at the two you recommend, thank you.

Lord Turner has always been a silly !!!.


Obviously the censorship software here is American; what three letter word in Murkin is offensive but over here means a donkey? It's a puzzle to be sure.

westv

What percentage of a retirement portfolio would normally be allocated to P2P?

jamesd

westv wrote: »

What percentage of a retirement portfolio would normally be allocated to P2P?

Depends on the circumstances, notably the time horizon.

In this case the key timespan is no longer than the five years to NRA for the first person. That's too short for high equity proportions to be used, because a big equity drop could happen without time for recovery.

That in turn means high allocations to fixed interest investments, which is where P2P fits in.

Personally I'd be comfortable all the way up to 100% in P2P, diversified across lots of platforms and loans. But I've been using P2P since 2008 so I'm familiar and comfortable with it and have a fair idea where the risks are and how to mitigate them. I'd be expecting at least five different platforms to be used because some of the hardest risks to deal with involve fraud, theft and similar issues at a platform. Low probability event but relatively high cost potentially.

To put that in context, I have more than £100k in loans or commitments to lend at Ablrate and many tens of thousands at MoneyThing. Doesn't mean that I can't be wrong but no place will get that much of my money unless I think they can be trusted.

westv

jamesd wrote: »

In this case the key timespan is no longer than the five years to NRA for the first person. That's too short for high equity proportions to be used, because a big equity drop could happen without time for recovery.

Thanks for the reply.
If the timespan was more like 10 years would a higher equity proportion be considered?

jamesd

Yes. The longer the timespan, the more appropriate equities are and the higher the proportion that could be used.

At the moment it's possible to get likely returns from P2P that are higher than the long term equity average. That's interesting even for the longer term when many equity markets are at fairly high levels. For me that means much lower equity levels than the close to 100% I used to use, with the intent to up the equity part after a substantial drop. Fixed interest doesn't normally offer that combination but I'm happy to notice when it does.