- My net investable assets increased to $650,339.
- The IRR for the trailing 12 months (TTM) decreased to 7.98%.
- I added commercial real estate (CRE) investments to my portfolio.
Net Investable Assets: $650,339
|Direct Lending Income Fund||$487,118||$792,181||$305,063|
The increase was $120,198 which was exactly what I forecasted. My investment suffered due to a large unexpected loss of Lending Club ($5k expected gain vs. $4k actual loss), and lower return of DLI Fund (12% forecast vs. 10.89% actual). Over the next few years, my salary is expected to remain flat while a passive income continues to grow.
Internal Rate of Return (IRR): 7.98%
|Account||Allocation||XIRR (TTM)||XIRR (TOT)|
|Direct Lending Income Fund||84.16%||10.75%||10.73%|
My IRR continued to decline. The under-performance of recent vintages of lower grade Lending Club loans (particularly grade E-G) is hurting my investment returns. Allocating a large portion of my portfolio to Lending Club was a big mistake. The discrepancy between an actual return and an expected return continue to worsen, leading me to consider other investments. I have stopped automated reinvesting for the foreseeable future and continue winding down all Lending Club accounts. I plan to transfer Roth IRAs from Lending Club to Vanguard.
Investment Strategy 2017
Currently my portfolio splits 90% hedge fund and 10% commercial real estate. An expected return is 10% and 20% respectively. I will continue to leverage through credit card balance transfers to increase the return of an investment.
Backdoor Roth IRA
I considered Vanguard or Fidelity for my annual backdoor Roth IRA, but I decided to
stay with Lending Club sign up for the Groundfloor IRA beta release. My annual backdoor Roth IRA contribution will be invested with Groundfloor. I also started winding down Lending Club IRAs.
Litigation Finance Overweight
I will shift my portfolio from overweight short-term small business loans through DLI Fund to overweight commercial lawsuits through LexShares. I plan to build a large litigation portfolio.
Credit Card Arbitrage
DLI Fund redemption will cover my credit card debts. An estimated total withdrawal is $750k over the next 12 months. $350k will go toward credit card repayments. The third round of credit card arbitrage investment will take place in mid-2018.
401(k) Contribution Only Up To The Match
I stop maxing out a 401(k) plan through my company. My employer matches 125% up to 6 percent of my salary for a maximum $10k per year. I will contribute only up to $8k.