5 Key Benefits Of Auto-Invest… And Why It May Be The Right Choice For You
It’s finally happened. The robots are here!
Has our autonomy all but vanished? Well, that’s completely up to you. But remember that automation can be a good thing. After all it builds our cars, it keeps us warm… and will eventually destroy us all.
OK, well it might be contentious in some areas of life, but when it comes to investing it can bring plenty of benefits.
Over the last 12 months, House Crowd members have invested millions into our Auto-Invest product ensuring their available capital is automatically diversified across our peer to peer loan portfolio. Here are 5 key reasons why more and more House Crowd members are choosing Auto-Invest over self–select investments.
1. Better Overall Return
Yes, if you choose self-select investments, the headline rate will often be higher than with Auto-Invest. However, with self-select investments you may have to wait longer for a suitable opportunity. Your interest rate may not start straight away and when you are paid back you will have to start the process again. All in all there will be downtime which will reduce your overall return. With Auto -Invest your money is earning interest 365 days a year.
Furthermore, with all loans there is a risk that the borrower does not repay, and when the property is sold there is not sufficient to pay all your interest. This will have considerably less effect on your potential return in Auto-Invest than it would in a self–select investment.
Never, ever, ever put all of your eggs in one basket. In the world of investing, the general rule of thumb is (as you should already know) that you must spread your risk.
If you choose to invest in individual bridging and development loans, it’s true you may earn a higher target % rate, but should you be heavily invested in one loan it can have a serious effect on your return and the safety of your capital if that borrower does not repay in full.
With Auto-Invest, your money is spread across our portfolio, so while you’re not completely immune to the possibility of delays, we spread your risk to reduce the possibility of your money being tied up longer than expected.
Putting a lump sum away and living off the interest is the goal of many of our investors.
If you’re investing with the goal of earning a consistent, predictable income, either to live off, or supplement your other income, then Auto-Invest is the best product to help you achieve that .
With self-select investments, repayment dates are never certain as they are dependent on the borrower repaying the loan.
Whereas with Auto-Invest, we diversify your capital across our property backed peer to peer loan portfolio and as we take the interest payments into account in the Auto-Invest rates, we’re able to pay out interest every six months.
This means you can reasonably plan to expect income from your House Crowd investments twice a year. And if you are investing for growth instead of income, you can roll up and compound this interest which can have significant benefits to your overall return. Compound interest works miracles in growing your wealth over time
4. Hassle Free Investing
Is peer to peer lending new to you? Or are you too short on time to confidently undertake the necessary due diligence on every loan and manage your own investment portfolio?
Whether you’re busy at work, enjoying life or feel like you’re spending your evenings and weekends running a private taxi firm for your kids, it’s fair to say that a lot of us are – to coin a phrase – “time poor.” Some of our experienced investors like to choose their own loans according to their own set criteria.
Some have developed systems that work for them. But if legal charges, LTVs, property locations, valuations, credit scores and exit strategies are things you’re too busy to contemplate analysing, Auto-Invest makes life a lot simpler.
By choosing Auto-Invest, once you’ve invested your money there’s no more work to do. You can sit back and relax (for about 30 seconds before dropping the kids off at football training) and let us automatically diverse your money, and choose suitable investments for
The House Crowd systematically manages your portfolio, so you don’t have to. No more trawling through emails for information about an investment you may or may not have made several years ago or balancing the loans in your portfolio. We have it all in hand… But we can’t pick the kids up for you. Sorry!
5.Get Your Money When You Need It
Are you investing for a specific future date?
Whether it’s a hefty tax-bill, a daughter’s wedding or the holiday you’ve always dreamed of, if you need your money by a certain date, then individual deals are probably not the best way to go.
All of our automated investment products have defined exit terms, subject to terms & conditions, which means that in normal market conditions* you should be able to withdraw your cash when you need it after the end of the minimum term:
- Innovative Finance ISA: 3 year minimum term (1 month’s notice)
- Auto-Invest: 12 month minimum term (1 month’s notice)
- 30 Day Access: 3 month minimum term (1 month’s notice)
This offers the kind of access and flexibility investors are looking for with the potential for inflation busting returns.
If you’d like to consider Auto-Invest, our Innovative Finance ISA or our 30 Day Access solution, visit our product pages for more information, or get in touch with our Member Support team via email, phone or live chat. We’re here to help answer any questions you have 9am-6pm Monday-Friday.
*Note! This is subject to sufficient availability of funds. If a part of your fund is invested in a loan that is yet to reach redemption we will attempt to transfer it to a replacement P2P investor, and hence return your capital. This should be possible in normal market conditions, however it is not guaranteed and you may need to wait for its redemption, which could be longer than your notice period. If individual loans are in default you will not be able to recover the part of your investment allocated to that loan until the borrower repays. See product terms and conditions for full details.
Your capital is at risk and rates are not guaranteed. Withdrawals may be restricted due to illiquidity. Not covered by the Financial Services Compensation Scheme (FSCS). Please read our full risk warning.