Title: What Returns Do You Expect Going Forward?
Post by: Rob L on December 19, 2019, 11:00:00 PM
Post by: Rob L on December 19, 2019, 11:00:00 PM
I took a look at the statistics section of the LC website today. Specifically the chart titled "Investor Account Returns by Average Age of Portfolio" and made the following selections:
Average Age of Portfolio: 24 - 30 months (the maximum)
Portfolio Concentration: Any
Minimum Notes per Account: 100
Something interesting to watch in the future on a quarterly or annual basis.
Average Age of Portfolio: 24 - 30 months (the maximum)
Portfolio Concentration: Any
Minimum Notes per Account: 100
| Weighted Average | 10th | 90th | |
| Interest Rate | %tile | Median | %tile |
| 0% - 9% | 3.3% | 4.3% | 5.3% |
| 9% - 12% | 2.7% | 4.1% | 5.5% |
| 12% - 15% | 1.7% | 3.5% | 5.5% |
| 15% - 18% | 0.9% | 3.2% | 5.9% |
| 18%+ | 3.3% | 2.8% | 6.0% |
| ALL | 3.3% | 3.6% | 5.6% |
Something interesting to watch in the future on a quarterly or annual basis.
Title: What Returns Do You Expect Going Forward?
Post by: Macroman on December 20, 2019, 11:00:00 PM
Post by: Macroman on December 20, 2019, 11:00:00 PM
This agrees with my experience. One thing to note is that there is essentially no addditional effective risk premium for buying riskier notes. I am shooting for 4% on what I have invested in an IRA and am not adding more.
I'd add that essentially the same situation seems to prevail at prosper.
I'd add that essentially the same situation seems to prevail at prosper.
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on December 21, 2019, 11:00:00 PM
Post by: TravelingPennies on December 21, 2019, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: jrl on January 07, 2020, 11:00:00 PM
Post by: jrl on January 07, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 08, 2020, 11:00:00 PM
Post by: TravelingPennies on January 08, 2020, 11:00:00 PM
Of course you are right regarding the 18%+ rate return for the bottom. Must have been a typo on my part.
Meanwhile, I must be going batty but I cannot locate the chart titled "Investor Account Returns by Average Age of Portfolio" anymore.
I have tried, really. Embarrassing! You just looked at it last night. Okay, exactly where can (did) I locate this?
Meanwhile, I must be going batty but I cannot locate the chart titled "Investor Account Returns by Average Age of Portfolio" anymore.
I have tried, really. Embarrassing! You just looked at it last night. Okay, exactly where can (did) I locate this?
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 08, 2020, 11:00:00 PM
Post by: TravelingPennies on January 08, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 09, 2020, 11:00:00 PM
Post by: TravelingPennies on January 09, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 09, 2020, 11:00:00 PM
Post by: TravelingPennies on January 09, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: .Ryan. on January 09, 2020, 11:00:00 PM
Post by: .Ryan. on January 09, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 09, 2020, 11:00:00 PM
Post by: TravelingPennies on January 09, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: Fred93 on January 09, 2020, 11:00:00 PM
Post by: Fred93 on January 09, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 10, 2020, 11:00:00 PM
Post by: TravelingPennies on January 10, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: macroman7799 on January 10, 2020, 11:00:00 PM
Post by: macroman7799 on January 10, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 10, 2020, 11:00:00 PM
Post by: TravelingPennies on January 10, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 10, 2020, 11:00:00 PM
Post by: TravelingPennies on January 10, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: macroman7799 on January 11, 2020, 11:00:00 PM
Post by: macroman7799 on January 11, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: rawraw on January 11, 2020, 11:00:00 PM
Post by: rawraw on January 11, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: Rob L on January 11, 2020, 11:00:00 PM
Post by: Rob L on January 11, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 11, 2020, 11:00:00 PM
Post by: TravelingPennies on January 11, 2020, 11:00:00 PM
You got it mostly right except the math to reduce the cost of funds. The banks creating money stuff is not the same as the amount of money they pay interest on.
If they have 100 in assets, they'll have something like 90 in deposits and 10 in equity. They'll pay 1 percent on the 90% and then have a required ROE of say 8% on the 10.they can also use some types of debt instruments in the 10 that are cheaper than equity
In general, banks have a net interest margin of 3 to 5 percent. This is the difference between loan yields and interest costs.
If they have 100 in assets, they'll have something like 90 in deposits and 10 in equity. They'll pay 1 percent on the 90% and then have a required ROE of say 8% on the 10.they can also use some types of debt instruments in the 10 that are cheaper than equity
In general, banks have a net interest margin of 3 to 5 percent. This is the difference between loan yields and interest costs.
Title: What Returns Do You Expect Going Forward?
Post by: jrl on January 11, 2020, 11:00:00 PM
Post by: jrl on January 11, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: Fred93 on January 11, 2020, 11:00:00 PM
Post by: Fred93 on January 11, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 12, 2020, 11:00:00 PM
Post by: TravelingPennies on January 12, 2020, 11:00:00 PM
Okay I think I've got it but I'm still left with a couple of questions.
What is this bank "leverage" thing and how is it obtained.
Do banks presently have so much cash on deposit that basically any method a bank can find to loan that money is attractive? In a world of mid 3% fixed mortgage rates I guess that makes sense.
What is this bank "leverage" thing and how is it obtained.
Do banks presently have so much cash on deposit that basically any method a bank can find to loan that money is attractive? In a world of mid 3% fixed mortgage rates I guess that makes sense.
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 12, 2020, 11:00:00 PM
Post by: TravelingPennies on January 12, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 12, 2020, 11:00:00 PM
Post by: TravelingPennies on January 12, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 13, 2020, 11:00:00 PM
Post by: TravelingPennies on January 13, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 13, 2020, 11:00:00 PM
Post by: TravelingPennies on January 13, 2020, 11:00:00 PM
That's right. Once you understand this, you'll see why banks are so conservative. Small swings in assets can completely wipe out their equity
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 14, 2020, 11:00:00 PM
Post by: TravelingPennies on January 14, 2020, 11:00:00 PM
Title: What Returns Do You Expect Going Forward?
Post by: TravelingPennies on January 14, 2020, 11:00:00 PM
Post by: TravelingPennies on January 14, 2020, 11:00:00 PM
You are now a bank expert 
Now a bank does have overhead associated with those deposits (branches, servers, websites, etc), but you get the idea. And Lending Club allows geographic diversification and consumer lending, which tends to be hard for small banks to do at scale. Most banks do mostly commercial
Now a bank does have overhead associated with those deposits (branches, servers, websites, etc), but you get the idea. And Lending Club allows geographic diversification and consumer lending, which tends to be hard for small banks to do at scale. Most banks do mostly commercial