As I mentioned in my initial peer-to-peer lending post, my first Lending Club investment, a taxable account, was opened in the spring of 2009. Having held this investment for almost four years, I have recently been at a crossroads with what to do with this account. Last fall, I made the decision to start to close this account as I knew I was going to be rolling a portion of my Roth IRA into a Lending Club account. As a result, I sold of most of the notes in the secondary market, giving me a full taste of all the pain, struggles, and profits to be had there.
Currently I have just about $1,100 in my taxable account and have decided that I will not be selling off the remaining loans, and will begin tracking this account on the blog alongside of my Roth IRA account. This decision comes after some wavering as to the best use of these funds, as well as frustrations with the tax reporting by Lending Club. Having developed some additional confidence in the reporting, as well as the added motivation provided by this blog, I have ultimately decided to keep the account open.
With an expected and hopeful return of 10% for this account in 2013, my goal is for it to generate net interest income of approximately $120 per year. Net interest is all interest earned net of any fees, charge-offs or defaults of notes in the account. My original 2013 Lending Club passive income goal was $1,000 for the year. As a result of adding my taxable Lending Club account, this raises my net interest goal $1,120, and brings my total passive income goal for 2013 to $2,120.
A quick summary of my taxable Lending Club account as of January 31, 2013 is below:
|LC - Taxable|
Please note the trailing twelve month (TTM) interest is artificially high when compared to the current balance due to the note sell-off I had in the second half of 2012.