Cyclone Posted October 3, 2012 Author Share Posted October 3, 2012 Being on the ball won't make any difference if by xmas this year the base rate is back at 4% and next xmas you decide you want to release your capital. Unless being on the ball includes being able to forsee the future of course. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 3, 2012 Share Posted October 3, 2012 Just to add make sure you limit exposure to each borrower. Don't be tempted to go above the 10 pound per borrower just to get your money lent out. And I'll also repeat what I said about setting rates above the Zopa. Like I said I did that a lot and got plenty of borrowers that way. It just requires a little patience. As long as you don't go too high your money will get lent out. Link to comment Share on other sites More sharing options...
I1L2T3 Posted October 3, 2012 Share Posted October 3, 2012 Being on the ball won't make any difference if by xmas this year the base rate is back at 4% and next xmas you decide you want to release your capital. Unless being on the ball includes being able to forsee the future of course. It's like any investment where your return/investment performance can be impacted by market forces. You wouldn't always hold onto shares if they were tanking and you had the chance to offload. It's a similar mindset - think about the market, the risk, where you expect the market to go etc... You've already done this and invested in the way that is right for you. I would take a different approach. We're not going to change each others minds. That said if you genuinely think that interest rates will hit 4% by Xmas don't put any more money in. Link to comment Share on other sites More sharing options...
Cyclone Posted October 3, 2012 Author Share Posted October 3, 2012 I don't think that, but I do think that interest rates will rise in the medium term. That doesn't really alter anything right now, the only reasonable returns you can get are on fixed term bonds or something like this, and the returns here are better than on bonds by a large margin. What the likely rise in interest rates does mean though, is that it will probably become impossible to rapidly recover your capital from a zopa investment, which is fine, so long as you plan for that situation and don't assume that the rapid sale option will always be possible. If you assume the worst and that rapid sale will never be available, then you can never be disappointed by being unable to recover your capital, because you invested on that basis. I don't think I'm trying to change your mind, you already agree that if circumstances change that this would be the result. Which is the only point I tried to make when I first replied to you on page one. Link to comment Share on other sites More sharing options...
Cyclone Posted October 3, 2012 Author Share Posted October 3, 2012 That's not guaranteed though, it will only work if the rates being offered when you wish to sell are lower than the rate you lent at, if interest rates have gone up then the chance of selling on a loan becomes zero. This statement remains true. If you decide to try to recover your capital some time after interest rates have risen then you will be unable to do so. Link to comment Share on other sites More sharing options...
jza80 Posted October 3, 2012 Share Posted October 3, 2012 Wow you invested £60, with all the form filling etc etc at 6%, you will make £3.60 a year, this time next year you will be a millionaire as dellboy said Link to comment Share on other sites More sharing options...
Cyclone Posted October 3, 2012 Author Share Posted October 3, 2012 £200, not £60. I didn't claim that I could retire on it, and there was no form filling to do at all. I also pointed out that I was just testing it out using a small amount of money, but so what? Link to comment Share on other sites More sharing options...
jza80 Posted October 3, 2012 Share Posted October 3, 2012 ok £12 ayear is it really worth the effort? do some research and buy some shares, with dividen your return will be miles greater Link to comment Share on other sites More sharing options...
Cyclone Posted November 11, 2012 Author Share Posted November 11, 2012 ok £12 ayear is it really worth the effort? do some research and buy some shares, with dividen your return will be miles greater I assume you're speaking from experience having invested your doll money wisely? What is the effort you're talking about though, 1 bank transfer and a few minutes setting up loan criteria... Is buying shares really worth the effort, that research you mentioned is going to take some time. And of course it if were actually easy for anyone to return >6% by investing in shares then managed funds (which don't always make a good return) probably wouldn't exist. Link to comment Share on other sites More sharing options...
mossdog Posted November 11, 2012 Share Posted November 11, 2012 Not scared of, it's almost certain to happen and if it does then it won't be possible to sell loans on using the rapid returns option. I was just making that point clear (partly to ensure I'd understood it, which I'm happy I have now). If the base rate changes then lending adjusts pretty much immediately to match it, there is no lag. My £200 is already completely lent, but it was only a tester. I split it across A*/A and B both long and short and pitched each one at the top of the range identified as within the ZOPA. It's not 'stung' exactly, but making an assumption that you might be able to withdraw your capital in a rush in say 2 years time if you decide to move house or something could well be a mistake as it might be simply impossible at that point. I think for me I will only invest an amount which I know I won't suddenly wish to recover, it might be possible to get it back at short notice, but it might be equally impossible, so don't count on it and you won't be surprised if you can't. I suspect you could do just as well if not better, flogging Avon cosmetics door to door!.............plus the bonus of free exercise. Link to comment Share on other sites More sharing options...
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