Each month I plan on updating my Lending Club investments in both my taxable and Roth IRA accounts. Even as loans are getting more and more difficult to find, not only was I was able to fully invest my original $10,000 investment in my Roth IRA, I was also able to invest an additional $500 contribution. At this point, my account should really take off in both income and snowballing into new investments. I am really looking forward to watching this growth!
Roth IRA Account:
As you can see, I am just under essentially 100% invested, with $600 in funding. As a result of being fully funded, the payments received have increased significantly. During April, this account really took off as notes began making payments. I earned $101.40 of net interest in my Roth IRA account and my overall internal rate or return, using Excel’s XIRR function, increased from 4.68% to 6.12%. My weighted average interest rate in this account has dipped down to 17.95%.
In my taxable account, I am fully invested with no money held up in funding. This account will just continue to turn itself over and During April, I earned $13.86 of net interest in my taxable account and my internal rate or return, using Excel’s XIRR function, increased from 10.42% to 10.53%. My weighted average interest rate in this account is 14.96%. As you can see in the loan details, I have a late loan that I would anticipate being charged-off in the near future. As expected, this would drop my XIRR as the principal becomes officially removed from my balance.
Lending Club Summary:
All told, April was a very good month for my peer-to-peer lending accounts as they brought in a total of $115.26 in net interest, an increase of $12.33 from March. My internal rate of return for the month with both accounts combined came out to be 12.89%. Did you earn 13% on your investments in April? With my Roth IRA fully invested, I expect that the month specific XIRR will continue to move upwards for a few months as the notes age prior to seeing the high point of defaults (months 6-12). Shortly thereafter, I would expect some missed payments and the eventual default of a portion of my holdings. This is, of course, to be expected with my investment risk profile.
I have updated my Lending Club page with this information and invite you to share your thoughts on my investment criteria. Please note when tracking my balance and return I do not include the accrued interest in the account, only the interest actually received net of fees, charge-offs, and defaults.
How did your peer-to-peer lending investments do in April? Have questions about peer-to-peer lending? Just ask!