The possibility of pursuing a doctorate came to an end. The educational institution estimated it would take ten to fifteen hours per week to work on the program. I could possibly do ten hours, but there is no way I could do fifteen hours since I already have two jobs. It was a fairly brief discussion with my wife and she agreed that I should not pursue it (something about wanting to see me occasionally). And thus ends the pursuit of another degree.
Recently, I have been looking into making a significant change in my investment portfolio. I have two parts of the portfolio that aren’t really investments, but instead are catastrophic insurance — bitcoin and gold. Neither gain interest and are only truly useful if people lose confidence in legal tender from federal reserve banks. While we have moved well past the financial crisis of 2008, only recently have I actually begun to think the end isn’t near. I think part of this should be credited to Torsten Slok from Deutsche Bank. I have far too many investment emails which portend the end of the world. Torsten has been making the case for over a year that inflation isn’t coming and the economy is stable and growing nicely. It has been interesting to see how my view is changing as I realize I should focus on the current investment landscape rather than worry about an end that is always somewhere out in the foggy future.
So I am going to sell my bitcoin and gold. Also for just about a year, I have been reading about peer to peer lending. Three companies stuck out — Lending Club, Prosper, and Payoff. Lending Club recently had an ethical crisis and has come out of it well positioned and likely sounder institutionally. This fits with the rest of my investment philosophy to buy when others are selling and sell when others are buying. I know that’s easy to say, but it can be easy to structure a buy and sell strategy with technical indicators to follow that mantra without emotion.
Peer to peer lending has been interesting to me for a few years. I have begun to question the banking system which has extraordinary rates for credit cards and equally extraordinary rates for savings accounts. I have mentioned many times in this space the horribleness of the financial repression we have been under for six years now. I have decided it is time to drop the investment direction of another financial collapse and to invest in people.
There is a fair amount of risk in peer to peer lending since a person with a loan can stop payment or default. I can accept that since I am not buying a government bond. The three companies I mentioned have spent some effort to filter out buyers with troubled pasts and have graded accepted requests based on multiple criteria. I suppose this is a simplified version of what banks do when I request a loan for a car or a house. Some of the requests I have seen on Lending Club are exactly for those items.
I will need to spend some time to work through each loan request to see if it matches my own feeling of safety. I have considered writing here about my experience of making a choice, of watching it over time, and seeing it either mature or become an issue. Obviously, the default rate is quite low or this type of financing wouldn’t work. I’ll start dipping my toe in the water next week when the funding of the account begins.