> For example, if you invested $100,000 in lower grade (C-G) notes on Lending Club with an aggregate 12.0% net annualized return, you'd receive approximately $6,000 in cash payments each month.
That just isn't a situation that happens for 99% of people.
Personally, I've seen worse returns and I know a number of other people that feel the way Lending Club came up with these numbers is fudged a bit since almost everyone I know ends up below the median.
The reality is, its returns are reasonably high risk [as you are limited in how many you can invest due to the caps the other guy mentioned] and if you get a bad basket you are screwed.
I'd rather invest in stocks given the real returns for the average person in Lending Club are about the same. Also, literally 0 of its proponents factor in what happens during a major recession [ default rates will skyrocket ] which will make even these modest returns terrible very quickly as loans default.
https://www.lendingclub.com/info/demand-and-credit-profile.a...
8.99 / 23.47 = 38%
https://www.lendingclub.com/info/statistics-performance.acti...
Their median return is 7.2%.
The top 90th percentile is 9%.
> For example, if you invested $100,000 in lower grade (C-G) notes on Lending Club with an aggregate 12.0% net annualized return, you'd receive approximately $6,000 in cash payments each month.
That just isn't a situation that happens for 99% of people.
Personally, I've seen worse returns and I know a number of other people that feel the way Lending Club came up with these numbers is fudged a bit since almost everyone I know ends up below the median.
https://personal.vanguard.com/us/funds/snapshot?FundId=0040&...
The reality is, its returns are reasonably high risk [as you are limited in how many you can invest due to the caps the other guy mentioned] and if you get a bad basket you are screwed.
I'd rather invest in stocks given the real returns for the average person in Lending Club are about the same. Also, literally 0 of its proponents factor in what happens during a major recession [ default rates will skyrocket ] which will make even these modest returns terrible very quickly as loans default.