Key Points

  • My net investable assets increased to $1,353,022.
  • The IRR for the trailing 12 months (TTM) decreased to 8.98%.
  • I have optimistic forecast for future returns.

Asset Allocation

Net Investable Assets: $1,353,022

Account 2018Q4 2019Q4 Change
Cash $39,055 $168,834 $129,777
Brokerage $132,099 $94,347 $37,752
Lending Club $13,139 $241 $12,898
Groundfloor $26,836 $0 $26,836
LexShares $805,000 $830,000 $25,000
YieldStreet $504,065 $319,448 $184,617
Debt ($390,501) ($59,847) $330,654
Total $1,129,692 $1,353,022 $223,329

The increase was $223,329 which was much less than expected. I was a bit too optimistic about returns on my investments. The good news is that all IRA transfers have been completed early in the year. My IRA accounts with STRATA Trust Company and IRA Services Trust Company have finally been closed. I no longer have to struggle to maintain multiple retirement accounts.

Internal Rate of Return (IRR): 8.98%

Account Allocation IRR (TTM) IRR (TOT)
Lending Club 0.02% 55.52% 5.14%
Direct Lending Income Fund 0% n/a 10.03%
Groundfloor 0% 30.05% 3.58%
iFunding 0% n/a 15.36%
LexShares 72.19% 6.15% 7.99%
YieldStreet 27.79% 14.15% 13.74%
Total 100% 8.98% 9.53%

LexShares was a major performance dragger because the vast majority of my assets was invested in the platform. Most commercial disputes typically resolve in 1-3 years. I expect to have more distributions in the coming year. My investment return will naturally catch up if it follows a J-curve pattern.

Investment Strategy 2020

I will continue investing in single-case deals via the LexShares platform. Investing in litigation funding has been very profitable in recent years. LexShares estimates the win rate of each case to be at least 70%, which translates into the 37% annualized return. There’s just no way to lose money.

Litigation Finance Overweight

I will stick to my investing strategy no matter what and maintain a concentrated portfolio consisting of litigation finance assets. I still feel good about the upside potential on my remaining cases since the MOIC improves as they age. Hopefully it will come out of the J-curve soon.

Leverage

My credit card debt will be fully paid off in March this year. I no longer take out personal loans or credit card balance transfers aggressively after my credit is restored. Leverage will be used to cover an emergency expense only such as major medical bills or large capital calls.