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Friday, October 11, 2013

Noted Mistakes

So After my initial setup of lending club I have also bought about 15 more notes in the trading platform and I have noticed a few things that I don't like and notice so mistakes that I have gotten my self into.

We I bought about 2 notes last week and these notes were not negative in value compared to the price in which I bought the notes. But... I bought a few notes last night that I thought were good, but they all show a negative income or ROI. These were cheaper notes that only have 10 months or less and so they only costed around $5+ to $10 but I started doing the math and some of these notes had to following information.


I bought a $6.00 note and then looked at the Monthly payment amount X the months left and got 6.09 Not bad but not good either on .09 cent profit.



I bought a $5.59 note and then looked at the Monthly payment amount X the months left and got 5.68. Again Not bad but not good either on .09 cent profit.

I bought a $5.71 note and then looked at the Monthly payment amount X the months left and got 5.71. This is Bad NO profit here. Waste of time.

I bought a $5.89 note and then looked at the Monthly payment amount X the months left and got 5.74. This is Bad NO profit -.15. Waste of time. Seems that a payment went through last night before I could take ownership of this note.

Again, I bought a $6.33 note and then looked at the Monthly payment amount X the months left and got 5.68. This is Bad NO profit -.65 Waste of time. Seems that a payment went through last night before I could take ownership of this note.

Again, I bought a $8.64 note and then looked at the Monthly payment amount X the months left and got 7.91. This is Bad NO profit -.73 Waste of time. Seems that a payment went through last night before I could take ownership of this note.

I bought a $9.58 note and then looked at the Monthly payment amount X the months left and got 9.73. Again Not bad but not good either on .15 cent profit. But I might miss the payment is the note doesn't settle today.

I bought a $7.79 note and then looked at the Monthly payment amount X the months left and got 7.82. Again Not bad but not good either on .03 cent profit. But I might miss the payment is the note doesn't settle today.

I bought a $8.63 note and then looked at the Monthly payment amount X the months left and got 8.79. Again Not bad but not good either on .16 cent profit. But I might miss the payment is the note doesn't settle today.

I bought a $8.59 note and then looked at the Monthly payment amount X the months left and got 8.85. Again Not bad but not good either on .22 cent profit. This is a little better, But I might miss the payment is the note doesn't settle today.

I bought a $7.73 note and then looked at the Monthly payment amount X the months left and got 7.77. Again Not bad but not good either on .04 cent profit. But I might miss the payment is the note doesn't settle today.

Hmmm. This doesn't look good... I will have to chalk these up as  minor set backs as a learning charge.

Future notes to my self and others. Make sure, double sure, that there is a + turn around and don't pick up notes that are within a 4 day window of the borrower making payments. You might miss that profit and it might cause you to be negative.

I think for now I will stop buying existing notes unless they have a larger profit margin and the borrow is in good standing on their loans. I will just stick to buying new notes for now.


2 comments:

  1. Good explanation about how debt increases your costs and makes life much more complicated

    ReplyDelete