The Anonymous Widower

Is Zopa Losing Its Attraction As A Platform To Go For A Loan?

Over the last month or so, I have been getting bigger amounts of money moved to my holding amount on Zopa,.

It appears to me, that borrowers could be repaying loans early.

This could be for one of several reasons.

  • People are fed up with non-Brexit and are being prudent, by repaying loans.
  • The economy seems to be picking up and borrowers can afford to pay loans off.
  • There are some good offers out there and borrowers are consolidating their loans elsewhere.

As Zopa don’t charge anything to pay off a loan, so if you have spare money, it must be top of the list for a loan to pay off.

A Worrying Trend On Lending

Perhaps more worrying is that at the moment the money I have made available to borrowers, seems to take a long time to be allocated.

Is this due to a shortage of would-be borrowers?

Conclusion

I have decided to increase my spending and visit some of the places on my bucket list.

May 11, 2019 Posted by | Finance | | Leave a comment

Zopa: P2P Investors Outperformed The FTSE 100 In 2018

The title of this post is the same as that of this article on Peer2PeerFinance News.

The title is a good summary of the article, which is a must-read.

January 9, 2019 Posted by | Finance | , , | Leave a comment

The Concept Of Hybrid Banking

I have been writing about hybrid trains and locomotives recently.

In Hybrid Power On The Railways, I summarised the current state of development, with brief descriptions of the current hybrid trains and locomotives.

This was my conclusion.

Just as hybrid cars are becoming more numerous, I suspect we’ll be seeing more hybrid trains in the future.

So can hybrid principles be applied to other industries and processes?

A Standard Hybrid Process

In my opinion, one of the best hybrid systems is the transmission of London’s New Routemaster bus. This description of the drive-train is from Wikipedia.

The bus is a hybrid diesel-electric driven by a battery-powered electric motor, charged by a diesel fuelled generator and recovering energy during braking by regenerative braking.

It is a classic serial hybrid vehicle.

Energy is collected in the battery from the diesel generator and regenerative braking and the battery powers the bus.

Hybrid Banking

Could a bank account be designed on similar principles?

  • Money would be collected and stored in a deposit account, where it would earn interest.
  • There would be a wallet or current account, where sufficient money is available to pay bills expected.

I also believe that just as in the bus, there would be a clever control algorithm, that made sure money was in the right place.

  • To pay bills.
  • Earn maximum interest payments.
  • Avoid charges for going overdrawn.

Many would believe, I’m asking for the impossible.

But!

Zopa Or Another Peer-To-Peer Lender As A High Interest Deposit Account

I use Zopa to store my excess cash.

I just add money, when I have spare.

Zopa’s computer decides, who I lend it to, so it’s effectively deposit-and-forget.

Since, I started investing I have earned returns of around five per cent before tax.

Any irrecoverable debts are now allowed against earnings.

But the unique property of Zopa and probably some other peer-to-peer lenders, is that each month a certain amount of money becomes available for reinvestment or withdrawal.

These figures show the percentage of money, I’ve had available in the last few months.

  • April 2019 – 6.0%
  • March 2019 – 5.7%
  • February 2019 – 5.6%
  • January 2019 – 6.1%
  • December 2018 – 4.7%
  • November 2018 – 6.9%
  • October 2018 – 7.1%
  • September 2018 – 6.7%
  • August 2018 – 7.5%
  • July 2018 – 6.8%

So it looks like for a mature Zopa portfolio, around 6-7 percent is available for reinvestment or withdrawal.

If like me, you have tax bills to pay at various times of the year, you might sometimes take the latter option, as I do!

But if you do withdraw money, your ratio will change.

It should also be noted that a high proportion of Zopa contracts make payments on or around the first of the month. So lenders can get a sizeable payment in the first few days of a month. All very handy!

Nationwide Or Any Other Bank Account As A Wallet

I use Nationwide as my bank current account, transferring money between Nationwide and Zopa as required.

I also have a sensible agreed overdraft limit, which gives me an extra amount of flexibility. I think it’s only been used twice in the last couple of years at tax payment time.

As the overdraft limit is lower than the minimum amount of money, I’ll be able to withdraw from Zopa in a month, I know that if I use the overdrsft, I should be able to repay it quickly.

The Control Philosophy

I don’t have a computer to work through the control philosophy, but I can use the brain I was born with.

By about the twentieth of the month, I can see the state of my finances and generally know, whether my pension will cover my expenses for the next month or so, or if I need some help.

So when the Zopa payments kick in around the turn of the month, I withdraw what I think I’ll need.

If I draw out too much, then around the twelfth or so, I put any surplus back into Zopa.

A Hybrid System

I believe that what I have described works in a similar way, as a typical hybrid drive system for a bus, train or car.

  • Zopa backs up the bank account and provides extra finance when needed. This is a similar function to the traction battery in a hybrid vehicle
  • The agreed overdraft facility is there if any extra short term finance is needed. It has a function similar to capacitors in a hybrid vehicle, where they are used to provide a fast smoothing response.

Imagine an on-line banking system, which used artificial intelligence to calculate how much extra money is needed each month and transfer money to and from Zopa accordingly.

 

December 25, 2018 Posted by | Finance | , , , | Leave a comment

Preparing For A No-Deal Brexit

I am doing a few things to make sure, that I survive a no-deal Brexit, as unscathed as possible.

Savings

I keep all of my spare cash in Zopa, moving it in and out as required. Effectively for about seven or eight years now, I have used the first peer-to-peer lender as a high-interest, thirty-day access deposit account.

It has probably paid around five percent before tax in that time and it has safely ridden the peaks and troughs of governments and financial instability.

Today, I calculated how much cash, I need in my current account to see me through to end of the year, and the spare money was tranferred to Zopa. It was a fast painless transaction and now it is available to lend to Zopa’s customers.

Warfarin

Warfarin stops me having another stroke.

As it only comes from Eastbourne, I suspect supply of this comment drug.

But I have enough to last me to until Summer 2019.

INR Testing

I test my own INR, which determines the Warfarin dose.

Today, I ordered enough test strips to get me through to Summer 2019.

Beer

Every time, I go walking around London, I take a large bag, that can hold up to eight bottles of my favourite beer from Marks and Spencer.

Supplies from Adnams in Suffolk seem good at the present and I usually liberate a few from a boring life on the shelves on every trip.

As with other products, I aim to have enough to last me through to Summer 2019, at a rate of three a day.

November 30, 2018 Posted by | Finance, World | , , , , | 2 Comments

Most Zopa Plus Investors Earn “At Or Above” Target Rate

The title of this post is the same as that on this article on Peer2Peer Finance News.

I have not complained and I’ve been an investor for ten years.

November 16, 2018 Posted by | Finance | | Leave a comment

My Preparations For Brexit

My Dalstonian grandmother was caught out by WW1, so she had a hundredweight each of jam and sugar in her cellar for WW2.

I shall be storing my money in Zopa, as it should ride out any storms, as it has done in the past.

October 24, 2018 Posted by | Finance, World | , | Leave a comment

Zopa Supports Citizens Advice ‘Super-Complaint’

The title of this post is the same as that of this article on Peer2Peer Finance News.

This is the first paragraph.

Zopa is supporting a ‘super-complaint’ against the Competition and Markets Authority (CMA) which aims to stop loyal bank customers from being overcharged.

This may seem a bit cynical on Zopa’s part, but I’ve been with them for eleven years and have always got a better return after tax and any losses,  than I would have got from say a cash ISA or one of the Big Banks’ Savings Accounts.

Read the article and see what you think!

Intriguingly, I’ve never heard a licenced Financial Adviser recommend Zopa.

September 29, 2018 Posted by | Finance | , | Leave a comment

Why A Zopa Investment Is Like A Salary!

I have been investing in peer-topeer lender Zopa since 2008 and it has been very useful to me.

I wrote Managing Zopa As A High-Interest, Almost Instant-Access Deposit Account over three years ago, and a lot of what I said then still applies.

This graph from Zopa, which shows my cashflow from Zopa for October, explains why it is possible.

Note how people tend to choose to pay their loans on the first and twenty-sixth of the month.

This means that if you have Zopa’s Autolend feature turned off and budget your finance, you have a chance, at the end of each month to give your bank account a top up.

What helps, is that, the two credit cards I use have payment dates around the twelve of the month.

At present too, it seems that about four percent of the money you have invested in Zopa is churned through every month, so is available for repatriation if required.

October 2, 2017 Posted by | Finance | | Leave a comment

Is Peer-To-Peer Lending Having A Spot Of Bother?

There have been one or two news reports questioning asking tis question.

I invest in Zopa and I have made the prudent decision to put my spare money in a Safeguarded product.

I have had a good run and certainly get more on my savings than I would in a bank. Obviously, I am including any bad debts in this statement.

I shall watch the situation, but I still believe what I said in Stability in Financial Systems.

If there are rumours of a spot of bother, then the following will happen.

  • Investors will put their money elsewhere.
  • Rates to lenders will rise.
  • This will tempt nvestors back in.

It’s a merry-go-round for money!

Note that because Zopa matches investors and borrowers by means of a computer, no human bias can drive the system in a wrong direction. Except a bent programmer and hoipefully systems are in place to check the honesty of their employees.

September 2, 2017 Posted by | Finance | , | Leave a comment

Making An Investment Using My Zopa Funds

Over the past eight years, I have built up a seasonable six-figure sum in Zopa. It has paid me upwards of five or six percent  after all deduction of losses and charges over those years and it has been a safe investment compared to some others I could have made.

But now is the time to liberate it, as I want to invest in something important to me, and liberating any of my other investments, would mean reducing my pension pot.

I am not selling any of my performing loans in Zopa, but just liberating any interest and principal repayments. Typically, about six percent of the money I have invested in Zopa is returned to my bank account each month.

It has been a painless way to fund my investment.

Various financial advisers have told me that peer-to-peer lending like Zopa is risky. But of course, there’s no way they can get a commission.

February 16, 2017 Posted by | Finance | | 3 Comments