Power to the People.
David Cameron is proposing putting details of a lot of Government expenditure and plans on the Internet, so that anybody with time on their hands can scrutinise it. It is an idea that I totally approve of. In fact, I think we need a lot more information there, so that people can have statistics to back their theories; conventional or not!
Hasty Legislation Often Doesn’t Work
This article entitled London landlords cash in as MPs play by the rules, also in the Independent, shows how when you do things quickly, you often don’t get the result you wanted. Before the expenses claim, this article says that the average monthly mortgage claim was £694.63. Now the average rental claim is £1,173.81.
It sounds like in order to get the morality right, we have created a system that doesn’t give the best value in all cases.
C would have thought this par for the course, as the number of times she came home complaining how the new laws about families, children, divorce and dogs were often worse than those that had been in force before.
Zopa and the Davids
According to their site, the most common name for both borrowers and lenders is David. Is that because it is the most common name amongst the general public.
When I worked as a consultant to Lloyds Bank, they always joked that most bank managers were called John, as they were so boring!
But then the only good one I ever knew was called David. Where is he biw, when the world needs him?
Would You Trust Western Union?
I’ve never used them, but I’m led to believe they are a reputable company.
But as I get at least five e-mails every day, where the company is mentioned in some form of scam, I don’t think I would even use them to transfer money to someone who I knew to be totally genuine. And I wouldn’t accept any money from someone who wanted to use Western Union!
So why do they allow their name to be taken in vain, by all these criminals?
Zopa and America
In some ways, Zopa illustrates the United States’ problems.
Zopa is an innovative financial company and you’ve have thought it would have gone down well, given the country’s history with credit unions.
But no! The legislators made it impossible for the company to operate in the same way as in the UK. Read Zopa’s view on this. It may have been a bad way to launch in the United States, but another company called Prosper doing peer-to-peer lending also had troubles with the regulators.
You can read what you like into all that, but I can’t help feeling that the US still gives the banks too much power to squash possible threats.
Zopa Approaches 500,000 Members
Zopa has announced that they are approaching half a million members.
That to me is an astonishing figure, considering they’ve only been going for a few years.
Obviously, some are borrowers and some are lenders.
Reasons To Be Hopeful
This was the headline across the front page of The Times today. They gave it three sub-titles :-
- Growth surprises City
- Advertising soars
- Strongest ewbound since the War
They also talked about how a new shopping centre at One New Change in the City of London, nicknamed the Stealth Bomber is virtually fully let to retailers.
Let’s hope that this is not a false dawn! But visiting Cambridge as I do regularly, I have a feeling that it is not!
Portsmouth on the Brink
I’m glad that I visited Fratton Park earlier in the season, as it looks like the club may not come out of administration according to this report on the BBC.
Rules for Zopa
I’ve now got back to looking after myself a bit better and I’m now keeping a proper check on my Zopa lending.
I think it’s fair to summarise a few points about my lending, which incidentally started in October 2008.
- About a quarter of all the approximately 2,300 contracts that I have lent money on have closed, with all the interest and money being repaid. All of this money has now been relent.
- Generally, there is about a £100 pounds that has not been lent, as people are still signing contracts and getting properly checked.
- At present there are 7 contracts that are late with payments and three have defaulted. One of the latter actually died, so that was unfortunate, but mainly for him.
- Since my stroke, I lend on a little and often basis. I restrict all contracts to no more than £10 and only lend to those in credit categories A and A*, which are the highest. I also adjust the rate I charge so that my money gets lent out quickly. I will probably change this when I’m a hundred percent better and I need to put in more money. But Zopa seems to be getting the money lent quickly, so why shouldn’t I make it work!
- I’ve only ever lent over 36 months.
Managing this properly means that I’m getting a return of about 5.5 to 6%, which is not bad in the present circumstances.
So how would I invest a sum in Zopa as a new lender, so that money was at the least risk.
- Read everything I can about Zopa and probably join their forum to ask questions from actual lenders and borrowers.
- Start with investing a sum, that you can afford to lose some of. I started with some of the proceeds of the sale of my late wife’s Porsche Boxster. Often a sum of £200 to £300 is a good value to start with.
- Set the maximum level you are going to lend to one borrower at £10. It’s very easy to adjust, so as you get used to Zopa, you can increase it.
- Set that you will only lend over 36 months to those with the highest credit ratings of A and A* and adjust your interest rates to something that gives you a sensible return and also a Medium or High lending speed. There’s no point in trying to get a 10% return, when no-one will borrow at that rate!
- Check what is happening every one or two days, so you can see how things are progressing.
- I analyse data and have made sure, that I have kept everything about the lending in a fairly simple Excel spreadsheet. This enables me to calculate returns effectively, but also I can see which strategies work to my advantage in the best way.
Have I made any mistakes? Yes of course!
- I used to lend in the Youth market because I thought it was morally a good idea and also because I got a higher rate. But I got one bad debt from this market and found that money tended to go slowly into it, as there didn’t seem to be the demand. So I no longer lend new money to this market, although of course I do have existing contracts in it, which are going fairly well. The figures now, two years since I started lending include one bad debt in 216 contracts and a return rate upwards of 7%. So perhaps it is a market, I shall start to put my feet back in, in the next few months.
- My maximum lending amount to any one borrower was too high, so that I was more likely to feel bad on a default. I suspect that it’s less risky to lend 10 lots of £10, than one of a £100.but on the other hand as you increase this maximum level,the money does tend to go out faster. As Zopa only charge you a fixed percentage on the money lent, there is no disadvantage to lending lots of small amounts.
- I also had more than one profile, which meant that as each profile has money to lend, I could also lend money twice in the same loan to one borrower. It would not be a good idea, as it then breaks your maximum rule.
As I said earlier don’t take my word for it. Read all you can about Zopa and if you want to swim, have little paddle first!
The A11 Missing Link Goes Ahead
Or that’s what it looks like after the government’s cost cutting according to this report on the BBC.
I know you could have argued that in our current state all road projects should go, but this is one that will pay for itself in lives saved because of the dangerous Elveden village.
The upgrading of the A14 through Cambridge has been scrapped, but if the Felixstowe to Peterborough rail freight mprovements kick in as they should, then the congestion caused by heavy lorries may decrease. Remember too, that a lot of the cars on this section of the A14 are commuters working in the high-tech businesses in the Cambridge area and these are just the commuters that might use alternative technological alternatives.
So if it was the A14 or the A11, then the A11 is the more iportant. It’s just a pity though, that there appear to be no plans in place to improve the links between Great Yarmouth and the rest of the country. The A11 Missing Link will be a great help, but work on the Acle Straight would very much be welcomed.
The Anonymous Widower 