LendingClub Update November 2016

Last month I put $2,500 into LendingClub.  I select automated investing with a mix that's just below 'safe, lower returns', going for 'still safe, better returns'.  I opted to split my money into 100 x $25 notes. These were picked up relatively quickly, and loans were issued usually within a week.  There's one note hanging, stuck in Review. I'm not sure what's going on there. According to LendingClub documentation the loan can sit in that status up to 30 days before it's either issued, or canceled. If canceled, my $25 will be released and automatically put towards another loan that matches my investment mix target.

LendingClub Experiment

This year has been great for stocks, including dividend stocks. I have not put any fresh capital into my stock portfolio, and only re-invested proceeds just once. I've been on the sidelines most of the time, waiting for two conditions: sufficient dividend proceeds to build up cash for another investment round, and good entry points for quality dividend stocks. I'm right at a point where the first condition is satisfied and will be more actively looking for good stocks.

I've been wanting to diversify from dividend stocks, and stocks in general, but never found a good options. I don't want to be a landlord, it's too much hassle, too illiquid, and too much of a gamble unless you do it large scale. So when I recently read about LendingClub, I figured I'd give it a try. LendingClub is a peer-to-peer lending company. There are others like Prosper, but LendingClub came best out of the reviews I read.  They did have some fraud issues earlier this year, but that seems to be behind them now. I'm not going to review LendingClub here, but I'll share some experiences.

High level the system allows people to get a loan, with each loan chopped into small notes that are backed by investors. For example a note can be $25, so a $10k loan is backed by 400 notes. As investor you invest in notes from different loans to reduce your risk. There are different loan grades based on the applicant's credit rating and other factors. The return is based on the interest rate and reduced by any loans that are written off if they default.

It's only been a week, so no real numbers yet. I opened an account, transferred $2500 into it, and had to wait a few days for it to clear. I signed up for Automatic Investments, where you select a risk/return profile and the system will invest for you. I figured this is good for a start to get a feel for the system.  On Monday my money was in the account and gradually used to fund different loans. You'll have to wait until a loan is fully funded (e.g. investors have picked up all the notes to back the loan), and then the loan gets issued. Within a week 90% of my notes were in issued loans, and I expect my first payments early November.  The remaining 10% are being issues, meaning their loans are fully funded, and I expect them to be issued early next week.

I'm curious about a few things. First I want to see how long I can keep a 'perfect record', meaning no defaults, charge offs or even late payments. I have some high risk loans in the mix, and I expect it won't be long. Second, I'm curious to see how quickly I get back enough money to buy another note.  Now that my initial investment is put to work, I'm debating if I should re-invest the returns in a different way -- more risky or less risky.

The next item I want to learn about it the secondary note market. I'm sure people have figured out the right time to sell a note to optimize their profits. Notes that are way past due could be charged off, or possible sold for a dime on the dollar to recoup at least some of the initial investment. I'll have to read up on it and see what I want to do. The easy thing is to just let things ride, but I want to see how much time it takes to manage it for more optimal returns. After all, I'm actively building a passive income portfolio.

Dividend Report September 2016

September saw the first payment of TRTN, which I'm happy about. The stock is still not doing well, but as long as they keep paying the dividend, I'll hold on.

• Income: $ 482.65
• Trailing 12 months: $ 5,516.83
• Forward 12 months: $ 5,662.10

In October I expect $ 176.66 in income.

Dividend Report August 2016

This month is lower than the May earnings. In May we had TAL paying out, and the newly merged company TRTN pays out in September, so we should see the boost there. We're still up, from August last year.

RY pays out in Canadian dollars, so there's always a slight currency fluctuation; I'm not deducting the foreign tax withholding, as I'll get that back in my taxes. RY also announce a dividend increase, which is why we love them.

• Income: $ 754.25
• Trailing 12 months: $ 5,447.45
• Forward 12 months: $ 5,651.60

2016 goal is to have $5900 in projected dividend income. So I'm roughly $250 short of that goal, and we have four months left to invest.  I plan to sell ARLP this year, which brings a lot of cash, which I won't be able to replace. So hitting the goal is going to be tough.  On the other hand, I do have one car payment ending later this year, which will help catch up investments early next year. It's around $1000 and I plan to put half towards a new car fund (cash until I've built up a comfortable level), and the other half will go into the dividend portfolio.

My cash position is slowly growing from div income the past couple of months. I'm not a point where I want to jump in yet -- plus various div stocks are overvalued at the moment. I plan to dump ARLP, and use the proceeds plus all cash to get into a new position, or possibly add to an existing one.

In September I expect to earn $ 482.65, including the first payout from TRTN as mentioned above, and my first income from TGT.

Triton Announces New Dividend

Triton International (TRTN) started last year when TAL merged. I wrote about this last Fall. My TAL shares converted to TRTN shares. It was a bit of a gamble holding on to the stock, as no one knows if they keep their promises.

Dividend Report July 2016

It feels great to go on vacation and come back to a nice stash of cash in my dividend account. It's why we love dividend investing -- steady income. Plus, we're not anxious about missing any big ups or downs in the market. Vacation is all about unplugging, and financial peace of mind is a big part of that.

• Income: $ 176.66
• Trailing 12 months: $ 5,337.34

This was a 'catch-up' report as we were on vacation, more in August.

Buy: TGT

Finally, a drop in the market, and I picked up 90 shares of TGT, adding $216 to my dividend income. My total forward income is now $5,745.89. My goal for 2016 is $5900 forward div income, and I want to say this is 'yellow'. I'm only funding this with div income, no fresh capital, so I think I can find another $155 in div income to meet that goal. However, it's not all about that one goal. I have ARLP and TAL on my sell list. Both of these have cut their div, but are still generating quite a nice sum. I'll sell sometime this year, but I'm not sure that I will be able to cover the $550 drop in div with other stocks. I'm willing to take the short term hit though, if it means a more stable growth portfolio in the long run.