retirement Archives - Lend Academy

How to Rollover a 401k or IRA to Lending Club and Prosper

Curious how to invest in a tax advantaged account? We review the process of opening an account with Lending Club and Prosper

March 23, 2016 By Ryan Lichtenwald 2 Comments

We often discuss the benefits of investing in p2p lending in a tax advantaged account, but we haven’t covered the actual process in detail. Readers often ask: How do I create a retirement account or rollover an IRA into Lending Club or Prosper? Both Lending Club and Prosper make this process simple and we’ll outline the steps to do this below. For investors looking to open a Lending Club IRA be sure to see if they are offering a current bonus for signup.

Besides rolling over an IRA from a previous employer or rolling over an existing traditional IRA or Roth IRA you can also open a new traditional or Roth IRA directly with Prosper or Lending Club. [Read more…]

It’s Official: P2P Lending to be Included in ISAs in the UK

After years of speculation the UK Chancellor made it official today. P2P lending will be included in a new Innovative Finance ISA starting in April next year.

July 8, 2015 By Peter Renton 2 Comments

There is big news out of the UK today. In his annual budget, Chancellor of the Exchequer (the equivalent of the US Treasury Secretary), George Osborne, made an announcement that will have a lasting impact on the P2P lending industry there.

Until now investors in the UK have not been able to be invest in P2P lending through the tax-advantaged ISAs (Individual Savings Accounts). And as we have discussed many times on Lend Academy taxable accounts make this investment less lucrative. While we have enjoyed investing through IRAs in this country for many years this has not been the case in the UK.

Here is the all important excerpt from the 2015 UK Budget:

Extending ISA eligibility – The government will introduce the Innovative Finance ISA, for loans arranged via a P2P platform, from 6 April 2016 and has today published a public consultation on whether to extend the list of ISA eligible investments to include debt securities and equity offered via a crowd funding platform.

This is a big moment for the industry in the UK so I reached out to the major platforms to get their reaction. They were all obviously very pleased with this development. This is what they had to say.

From Giles Andrews, CEO and Co-Founder of Zopa: [Read more…]

Online Lending Needs to Get Bigger…Much Bigger

June 10, 2013 By Peter Renton 12 Comments

I was reading the business section of my Sunday New York Times yesterday (yes, I still get a physical paper delivered once a week) and this front page story grabbed my attention: For Retirees, a Million-Dollar Illusion. It was all about the problems that retirees are having today because of the extremely low yields on fixed income investments.

Even relatively wealthy retirees with a $1 million nest egg are in serious risk of running out of money. From the article:

But consider this bleak picture: A typical 65-year-old couple with $1 million in tax-free municipal bonds want to retire. They plan to withdraw 4 percent of their savings a year — a common, rule-of-thumb drawdown. But under current conditions, if they spend that $40,000 a year, adjusted for inflation, there is a 72 percent probability that they will run through their bond portfolio before they die.

That is indeed bleak. What these retirees need is a stable and consistent high yield investment. If inflation is running at 3% and they are withdrawing 4% annually then what an investor needs is a 7% return in order to never run out of money. Now, 7% today is a pipe dream for many investors but readers of this blog know otherwise.

But we need to get to a much larger scale. We don’t just need Lending Club and Prosper to keep growing we need many more options in this space. We need more consumer loan platforms, small business platforms, real estate platforms, auto loan platforms and student loan platforms. We need to be able to have tens of millions of investors not just the 100,000 or so we have today.

Now, I am trying to do my part to grow this fledgling industry with this blog and the LendIt Conference. But I encourage everyone to keep spreading the word. The huge number of baby boomers hitting retirement age need better options than they have today.

Living on P2P Lending Investments in Retirement

November 14, 2011 By Peter Renton 18 Comments

This is a guest post from Eric Rosenberg at Narrow Bridge Finance and author of the Personal Finance Arsenal, an eBook designed to help you save time, save money, build your credit, and avoid the big fees.

I recently visited the homepage of Lending Club, a regular online stop for me, and noticed a big graph on the front page. They say that 91% of investors earn 6%-18% returns on portfolios over 800 notes ($20,000+). That got me to thinking, could someone use a p2p lending cash stream as an income source in retirement?

The Weighted Average Return

As with most marketing statistics, the ad leaves a lot up in the air. I assumed that the average return of the 91% making 6%-18% is in the dead middle of that range, which is probably high. Assuming that, however, I get a weighted average return of 11.3% across the 800 note club.

Just to be safe, I wanted to do a little sensitivity testing. I also ran a 6% return, 4.5%, and 1% scenario. This analysis assumes 100% principle reinvestment and 100% withdrawal of interest returns. [Read more…]