This past weekend I attended the Financial Bloggers Conference commonly known as Fincon12. Around 400 personal finance bloggers descended on Denver to discuss, learn, chat and generally have a good time.
On Friday night of Fincon12 there was an Ignite Event. This is where participants are given five minutes to speak about a personal or professional passion. My presentation was titled 20 Things You Didn’t Know About P2P Lending. While I have been told a video of all the actual presentations (there was about 14 of them) will be available online at some point I recorded a screencast video of my presentation this morning so you can see it for yourself.
At an Ignite event there are strict rules. There are only 20 slides, not including the title slide, and each slide is auto advanced every 15 seconds. So every presentation is exactly five minutes long.
[Update: My presentation from the Ignite event is now online – keep in mind this was done in bar at 10:30pm on a Friday night, it was not a typical seminar setting. And it is not G-rated.]
Now, I realize long time readers will know many of the points in my presentation; the target audience here was other finance bloggers most of whom only have a limited knowledge of p2p lending. If you can’t see the video below then you can watch it on YouTube here.
Great little slideshow for those that aren’t fully aware of the P2P side of business. Great work once again.
Thanks Phillip, I appreciate your kind words. It was pretty well received by the financial bloggers at the conference.
Every 15 seconds not every 15 minutes. 🙂
Oops. Thanks for that – now fixed.
Wait… You can fund LC account via PayPal ?
I did not know that!!!
Makes the delay from the time you invest in a note till you get the first payment not so painful.
Plus free Marriott points!
Now if I could fund my 401k via PayPal……
And just to clarify, you can fund your initial investment of up to $5,000 with Paypal. It only works for your first investment – the option goes away after that.
Awhhhhhh
I guess I will need to put up with ACH transfers that don’t show up for 1 week and loans that take 10 days to fund and 30 days for the first payment….
only a slight exageration 🙁
I got cash back on my initial $5k investment entirely by accident. Used Paypal due to ease-of-use and then Paypal drew from my credit card instead of my bank account (I guess because of the large dollar amount). Voila, instant tax-free returns!
Awesome video. I learned quite a bit. Your comment on G grade loan borrowers having the highest incomes reminds of a book I am re-reading right now, “The Millionaire Next Door”. Its definitely true that people with highest incomes tend to spend; living a hyper consumption life style. I’m more than happy to finance their debt!
According to http://www.nickelsteamroller.com/lendingclub_average the average monthly income of G grade borrowers is over 95.1K compared to A grade which is 67.5K
Yes, I am happy to finance their debt as well. As long as enough of them keep paying the way they have been. But it is a very curious phenomenon. I guess if you are earning $100K a year you are less phased by a 24% interest rate.
Peter, I like your little slideshow, which helps put things into a larger perspective. We could easily get lost staring at the number of default or late loans on a day-to-day basis.
You mentioned that P2P could evolve into a trillion-dollar business. I am wondering whether at that magnitude P2P lending would be the same as we know it today. I doubt if we could get the same rates of returns as we are getting now. For instance, banks or credit card companies would have to lower their rates to compete, since by then P2P lending would no longer be marginal players. And that could drive down ROIs for P2P lenders. At the same time, it could spawn other kinds of industries, say, exotic derivatives such as “credit default swaps” that supposedly serve as “insurance protection” against default risks–analogous to those swaps that underlie mortgage-backed securities. But once we get into that, and once we get the larger financial institutions involved, it could mess up the whole thing–as we have witnessed since the downfall of the Lehman Brothers.
Well you bring up a lot of points there. No doubt when we get to a trillion dollar industry p2p lending will be very different from what we see today. We are witnessing the evolution of a new asset class, consumer loans, that were previously funded only by large institutions like banks or credit card companies.
Consumer loans have been around a long time and will continue to be around for thousands of years I expect. But how they are funded will evolve. I expect Lending Club and Prosper and many new p2p entrants to be taking the lion share of this pie in the future. Could a bank buy them? Of course that is a possibility. As it matures rates will likely come down but we have seen tremendous demand from the investor and borrower side for this kind of direct lending. I expect there will always be a premium paid to the investor for the risk of investing in an secured loan, so I don’t think investor returns will reduce dramatically.
Excellent presentation Peter! Congratulations.
I am very pleased with the performance of my P2P lending investments, thanks in part to your advice. But the rest of my investment portfolio could use some improvement. I’m curious to know if there are other new and promising investment opportunities that you are excited about, perhaps some things there were featured in this conference? Are there any other financial bloggers that you can recommend? After all, I think even you would agree that one should not put all of their money into P2P Lending.
David, I certainly agree that one should not have all their money in p2p lending – a balanced portfolio is always best. There are many investments that I am excited about although none more so than p2p lending. I think there will be some very interesting opportunities coming up soon for investing in small to medium sized businesses and I am not talking about equity investments. Stay tuned to this space for more on that.
Some of my favorite investments right now are master limited partnerships (MLP’s) and other high dividend paying stocks. I also like municipal bonds for their tax free earnings.
As for financial bloggers I think the two best ones to learn about investing are Oblivious Investor (http://www.obliviousinvestor.com/) and Investor Junkie (http://investorjunkie.com/). I also read traditional media like Money magazine, the Wall Street Journal and the money section of the NY Times.