Hey! As a blogger I have no choice but to have these stuff seep into my head. Peer to peer lending was pretty hot 2 years ago and they are still going strong just we hear it less often.
I did not invest in them myself. The returns are great because it's risky lending. The way I will look at it is that good returns but part of it you might need to "give back" or cannot see it due to default.
You hope that at the end of all these the returns are decent.
I dunno why but it's often the good results are those folks that I heard from that are not in the blogging community.
Those in the blogging community their result are lukewarm at best.
I wonder is it because they didn't commit enough.
The way to compute is what is the amount of portfolio that will default. This will be your expected return.
Suppose 16% of the portfolio will default. Those that didn't made 15% on average. Your expected return is 12.5%. still a pretty good return.
However if it gets popular the interest rate might go down to 10%. The expected return is 8.4%.is it worth it for the reward? Do you have to do a lot of the work?
The actual default rate is something I didn't explore but you could probably figure out.
Let me know if you find this stupid or stimulating and wish to go further into it.
Hey! As a blogger I have no choice but to have these stuff seep into my head. Peer to peer lending was pretty hot 2 years ago and they are still going strong just we hear it less often.
I did not invest in them myself. The returns are great because it's risky lending. The way I will look at it is that good returns but part of it you might need to "give back" or cannot see it due to default.
You hope that at the end of all these the returns are decent.
I dunno why but it's often the good results are those folks that I heard from that are not in the blogging community.
Those in the blogging community their result are lukewarm at best.
I wonder is it because they didn't commit enough.
The way to compute is what is the amount of portfolio that will default. This will be your expected return.
Suppose 16% of the portfolio will default. Those that didn't made 15% on average. Your expected return is 12.5%. still a pretty good return.
However if it gets popular the interest rate might go down to 10%. The expected return is 8.4%.is it worth it for the reward? Do you have to do a lot of the work?
The actual default rate is something I didn't explore but you could probably figure out.
Let me know if you find this stupid or stimulating and wish to go further into it.