Why P2P Lending Should Be A Sizeable Part Of Your Retirement Planning

Aceace

An interesting article from 4thway: https://www.4thway.co.uk/candid-opinion/why-p2p-lending-for-retirement/

I've been increasingly heavily investing P2P for 3.5 years now and am achieving an overall net XIRR of 7.52%. It's hardly ever talked about on this forum except in negative terms, and never recommended by the main contributors due to some high profile scams. It's been working very well for me. Is it time to look again? 

p3ncilsharpener

Aceace said:

An interesting article from 4thway: https://www.4thway.co.uk/candid-opinion/why-p2p-lending-for-retirement/

I've been increasingly heavily investing P2P for 3.5 years now and am achieving an overall net XIRR of 7.52%. It's hardly ever talked about on this forum except in negative terms, and never recommended by the main contributors due to some high profile scams. It's been working very well for me. Is it time to look again? 

Our service is free to you. We don't receive commission from the above-mentioned companies. We receive commission from some other P2P lending companies when you click through from our website and open accounts with them. This doesn't affect our editorial independence. Read How we earn money fairly with your help.

So, a completely unbiased view of P2P lending then.

ctdctd

I invested in 6 P2P platforms.

3 have gone bust with administration running into years with funds mainly frozen.

1 has sold itself with full capital return after a period of reduced interest

2 are not taking new business but existing loans are being repaid

It's not for the cautious!

Rollinghome

I used to have a fair sum invested in P2P, well into six figures a couple of years ago, and got a very decent return.

The reason I got out was a combination of the amount of time it took investigating the loans relative to the returns from other investments, and the difficulty in spotting unknown risks.  With P2P there can be risks from both the borrower and the platform. It's not well regulated and as fraudsters noticed the opportunities, it became increasingly lawless.

I know that some people enjoy investigating loans and no investment is without risk, but for me, the returns from P2P became insufficient to warrant my time.

Aceace

ctdctd said:

I invested in 6 P2P platforms.

3 have gone bust with administration running into years with funds mainly frozen.

1 has sold itself with full capital return after a period of reduced interest

2 are not taking new business but existing loans are being repaid

It's not for the cautious!

I'm sorry that you've had a bad experience. 

I've invested in 35 P2P platforms. Only one has made a loss. 

I agree that many (probably most) are not for the cautious, but IMHO, a few could be suitable. And I suspect that the differences will become more obvious as the sector gains more traction. 

Thrugelmir

Aceace said:

Is it time to look again? 

The article seems to be more about painting a negative picture of share investing than any compelling argument for P2P.  

MaxiRobriguez

Aceace said:

An interesting article from 4thway: https://www.4thway.co.uk/candid-opinion/why-p2p-lending-for-retirement/

I've been increasingly heavily investing P2P for 3.5 years now and am achieving an overall net XIRR of 7.52%. It's hardly ever talked about on this forum except in negative terms, and never recommended by the main contributors due to some high profile scams. It's been working very well for me. Is it time to look again? 

A figure that is significantly lower, both in actual and risk-adjusted returns, to alternative options.

P2P can form a small part of a well diversified portfolio, but it shouldn't, in my opinion, be doing the legwork. 

Aceace

MaxiRobriguez said:

Aceace said:

An interesting article from 4thway: https://www.4thway.co.uk/candid-opinion/why-p2p-lending-for-retirement/

I've been increasingly heavily investing P2P for 3.5 years now and am achieving an overall net XIRR of 7.52%. It's hardly ever talked about on this forum except in negative terms, and never recommended by the main contributors due to some high profile scams. It's been working very well for me. Is it time to look again? 

A figure that is significantly lower, both in actual and risk-adjusted returns, to alternative options.

P2P can form a small part of a well diversified portfolio, but it shouldn't, in my opinion, be doing the legwork. 

Not according to the article, and not in my experience. 

MaxiRobriguez

Aceace said:

MaxiRobriguez said:

Aceace said:

An interesting article from 4thway: https://www.4thway.co.uk/candid-opinion/why-p2p-lending-for-retirement/

I've been increasingly heavily investing P2P for 3.5 years now and am achieving an overall net XIRR of 7.52%. It's hardly ever talked about on this forum except in negative terms, and never recommended by the main contributors due to some high profile scams. It's been working very well for me. Is it time to look again? 

A figure that is significantly lower, both in actual and risk-adjusted returns, to alternative options.

P2P can form a small part of a well diversified portfolio, but it shouldn't, in my opinion, be doing the legwork. 

Not according to the article, and not in my experience. 

A bog-standard global equity tracker would have given you returns of about 16% annual returns over the last five years, with greater liquidity, and whilst probably more volatility, much less chance of wipeout. 

Alexland

Aceace said:

 It's been working very well for me. Is it time to look again? 

While I admire your persistence it feels like P2P had its chance last decade and the average consumer wouldn't go to the effort of opening 35 accounts to get a good level of diversification. They would probably pick one or two P2P platforms and be at ongoing risk of sudden unrecoverable total loss on a high percentage of their investment value. As such P2P products seem unlikely to get mainstream adoption. We tried a few for signup bonuses and while we didn't suffer any losses it's not something I would bother with again.

Prism

I was quite happy with my RateSetter account for a few years even though the returns were only around 4-5%, but this was only a small part of my total and was at the lower end of returns. It also wasn't worth the risks in my opinion compared to 16% plus in equities over the last 10 years or so.