At the end of November, I had $4,942.17 in outstanding notes, another $600 (12 notes worth) committed to loans that were in the process of being funded, and about $60 of cash on hand.
During November, I continued to receive payments from borrowers that I backed with my early investments. As that money accrued, I invested it in more $50 notes, just as I do with any new money that I deposit.
Looking inside my portfolio, I had 103 active notes, which included mostly Grade C notes (73), with a handful of Grade D (27) and E (3) notes. This reflects my overall strategy, which is to target somewhat riskier notes to achieve higher returns.
Related: See an overview of how I choose loans prior to investing…
The average interest rate of these notes was 16.23%, which is undoubtedly an overstatement since it ignores the likelihood of defaults over time. The effective rate will undoubtedly wind up being lower.
As for my actual returns, Lending Club had my NAR pegged just above 16.5%.
I did see two notes slip into the grace period during November, temporarily taking my adjusted returns into the mid-14% range, but both got back on track and my adjusted NAR bounced back to match my NAR accordingly.
As for real-world returns, my own calculations have me with a 14.62% annualized return, which is a bit lower than my stated NAR. This is primarily due to the effects of idle cash in my portfolio, which Lending Club ignores when estimating returns.
All in all, I couldn’t be happier. Yes, some (hopefully) small fraction of my loans will eventually go late and some will ultimately be charged off. But, for now at least, I remain on track to meet my goal of 10-12% annual returns
If you’re interested in playing along, you can get started here.