Lending Club and P2P lending, a great investment opportunity

LendingClub logoI am always looking for interesting new investments, whether start-ups or completely different asset classes like wine or real estate. Earlier this year I started researching peer to peer (P2P) lending after reading about Kleiner Perkins’ investment in Lending Club, and Mary Meeker (KPCB partner) and John Mack (former Morgan Stanley CEO) joining their board. P2P lending basically means that you can directly lend money to other people. Sites like Lending Club and Prosper.com facilitate this, by putting borrowers in several risk classes and giving you the opportunity to spread your investment over many different borrowers (e.g. if you invest USD 5000 you could lend USD 25 to 200 people).

When I was reading that returns of around 10% (net) per year are quite normal I thought it sounded too good to be true. Based on my corporate finance background I knew this kind of returns without a huge risk should not be possible in an efficient market. But the fact that some top VCs invested millions of dollars in the company intrigued me. These are smart people, did they see something that I didn’t see?

Returns LendingClub

It took me some time, but I finally figured out that sites like Lending Club are actually giving small investors the same kind of returns that in the past only banks could get. The Internet made this possible, because the bank as a middle man was cut out. Because you diversify among many different borrowers you can estimate the default rate in advance, making the investment much safer than it would be when you would just loan to a couple of people. Returns of 10% on their loan portfolio are nothing special for banks, that’s how they got rich and that’s how they finance their huge overhead.

100 percent positive returns at LendingClub

After talking to some people at Lending Club in June this year I decided to “join the club” and put money into a fund run by Lending Club subsidiary LC Adivsors. The advantage of the fund is that you don’t have to decide which loans to invest in, which is something I don’t have time for (or don’t want to make time for). There is a minimum investment for the fund obviously, but if you want to make P2P investment a significant part of your asset allocation you should certainly look at it.

So far my experience has been exactly what I expected, with net monthly returns over 0.7% per month in my portfolio. Service is excellent, with monthly updates and a contact person that I can get in touch with any time. If you’re interested in the fund feel free to contact me by email (marcvanderchijs (at) gmail (dot) com) and I can put you in touch with my contact person at Lending Club.

Of course you can also invest in loans with much smaller amounts, a lot of people seem to start out with a few thousand USD and add a small amount every month. There are a lot of tools out there to decided which loans to invest in, and which doesn’t need to take a lot of time if you don’t add a lot of $$ every month. There are quite some blogs about P2P lending and on how to get started, check out http://www.lendacademy.com/ for a good overview.

The reasons I decided to write this post now is because Lending Club keeps on growing very fast, and announced earlier this week that the company now has over USD 1 billion in person loans and is cash-flow positive, which is a major thing for a fast growing company. Their funds have about USD 250 million under management. If you are looking for an interesting and high-yield investment you should make sure to take a look at p2p lending. Lending Club and Prosper are disrupting the financial market for loans and I think this might become a big industry with very interesting returns for lenders.

Blog migrated to new server

Over the past 2 weeks this blog moved to a new server. I used to host marc.cn at Hostway, but they had too much down time and I wasn’t very impressed by their customer service. So eventually I decided to host it on my own server at Amazon, a bit more expensive but (hopefully) more stable. Of course not everything went smooth right away, but it seems now the blog is working fine again (knock wood…). Thanks for your help in setting up the server and troubleshooting Joop!

Happy Halloween!

Princess Elaine and race car driver Scott before going to school during Halloween 2012

At home before going to school

Today the kids celebrated Halloween at school, so they both dressed up in their favorite Halloween costumes.

Scott and Elaine walking to class in their Halloween costumes

Walking (or in Scott’s case running) to class

Elaine only wants to dress up as a princess, so also this year’s outfit was an easy choice. Scott loves the movie Cars and admires our race car driver friends Ho-Pin Tung and Alexandre Imperatori, so we found him a Lightning McQueen race car driver suit. He was so proud when we arrived at school!

Halloween at Soong Ching Ling Kindergarten

Happy Halloween @ Soong Ching Ling!

Weekend trip to Yangshuo: Exercise, beer, fake wine and not much sleep

View over Yangshuo, China

View over Yangshuo

Last weekend I spent in Yangshuo, the small backpacker town on the Li river in Guangxi province. I had not been there since 2006 (see this post and this post) and I looked forward to going back and see the changes. I went together with Danny Wilms Floet, my best primary school friend who by pure coincidence now lives in the same street in Shanghai. It’s a small world!

We left Friday afternoon and flew to Guilin from where we took a taxi to Yangshuo (a 1.5 hour drive). We stayed in the Rosewood Hotel on West Street in Yangshuo, because it had great reviews on TripAdvisor and other sites. However, it turned out the hotel was not as nice as I had hoped, with slow and grumpy staff and damp rooms without windows (only my bathroom had a window).

But the biggest problem was that it’s so extremely loud outside that you can’t go to sleep before 2 AM (which was a good reason to stay out late!), and even after that I woke up a few times because of people walking through the hallways and closing doors (rooms are not well isolated). Anyway, they did provide free earplugs and we did not visit Yangshuo to sleep, so it was not a major deal, but because of this I would not recommend this hotel to anybody.

View from my hotel room in Yangshuo

View from my hotel room balcony

Danny and I decided to have a pizza in the pizzeria downstairs (owned by the hotel). We ordered a bottle of Italian Cabernet Sauvignon (Cielo), which took them about 20 minutes to bring (and only after asking the waiter 2 times where our wine was). I took one sip of the wine and realized we were fooled: this was not an Italian Cabernet Sauvignon but likely a cheap Chinese wine that someone (the hotel? the distributor?) put into Italian wine bottles. I know this regularly happens in China, but you would expect a hotel to try their own wines before serving them – unless they are in on the deal of course.

I am 95% sure this wine that we got at the Rosewood Hotel in Yangshuo was fake

Our bottle of fake wine…

We checked the bottle for signs of tampering and soon realized that the bottle had been reused: the label was a bit torn off in some parts (meaning other people had had this bottle on their table before) and the cover over the cork was not straight like it shoud have been. I did not drink another sip and changed to mineral water instead. I started to seriously regret my choice of hotel even before the weekend had really started… Later during the weekend we checked some other bottles of Cielo that the hotel had in stock and none of the labels was completely clean, confirming our suspicion. Well, this is China, so you can’t do much about it.

Danny and Marc in Yangshuo

Danny & Marc having a beer at Lucy’s

Because the pizza was rather small and we did not want to spend another Chinese Yuan in this restaurant we moved on to a different place, Lucy’s. To our surprise the place served Dutch french fries (“Patatje Oorlog”) which tasted pretty good with local beers. We had a few more beers and then walked around town a bit. We ended up at another bar in West Street around 11 PM and by that time the street was still extremely crowded. Much more busy than it had been 6 years ago, and with 99% Chinese tourists instead of the many backpackers that had still been here during my last visit. West Street used to be a nice place to hang out with a lot of Western style bars, but now it was full of Chinese bars blasting out loud cheesy music and shops that were all competing with ever louder announcements to get the tourists in. A pity, the old atmosphere was completely gone.

Beer Pong on the Mojo rooftop bar

Beer pong at Mojo

Eventually we ended up at rooftop bar, the Mojo, at the end of West Street close to the river. That was the kind of bar I had been looking for (or at least, the kind of bar that I remembered from a few years ago), with decent music and full of backpackers drinking beers and playing Beer Pong. An added advantage was the view over town and the surrounding mountains, this place is probably the highest bar in town. We stayed there until it got more quiet on the streets around 2 AM and then walked back to our hotel.

Yangshuo, China

On my beautiful pink ladies bike

We had breakfast at 9 AM in the hotel (nothing special) and then rented bikes. We wanted mountain bikes, but were told that they were not available and we ended up with the worst kind of transportation for the dirt roads in the Yangshuo countryside: pink ladies bikes without suspension or gears. At least they were cheap at about USD 2 per bike per day. We first rode around town, looked at the river and drove through some of the backstreets, and then went into the countryside.

Old bridge in the Yangshuo countryside

I still remembered most of the roads from 6 years ago and that was a good thing because we did not have a map. We made a long ride through the Yulong river valley, a beautiful area surrounded by karst mountains. Close to Yangshuo we still saw a few people, but after about 5 km the roads were almost deserted.

Marc riding through the Yangshuo countryside

Country roads

When we crossed the Yulong river, however, we suddenly saw all the Chinese tourists again. It turned out that as part of the tour group packages they all get to make a trip on bamboo rafts. Not sure what the fun of that is if you are surrounded by hundreds of other rafts, but I guess I am not the target group. Touts tried to get us to join as well but we kindly refused.

Chinese tourists on bamboo rafts were everywhere....

Danny looking at some of the hundreds of rafts on the river

We continued our trip and eventuallly rode about 50 kilometers on our pink bikes (luckily none of us got a puncture on the bad roads). Danny managed to get into an accident with a big motorbike on a small road up a mountain. The motorbike drove down rather quickly and had to brake hard to avoid hitting Danny. The motor guy then slipped and his motorbike fell partly on him. We helped the man to get himself and the bike up again, and then continued our ride. I probably should have taken a picture, it was just so funny to see a motor bike floored by a pink ladies bike on a slope in the middle of nature.

On the local ferry in Yangshuo

Yangshuo ferry

Not much later the road ended at the river. I had hoped for a bridge, but there was none. Luckily a guy on a raft was willing to take us to the other side. It was a bit wobbly with 2 bikes on the bamboo boat, but we managed without getting wet. We then had some drinks at Giggling Tree, a Dutch owned hotel/restaurant in a nice location close to the river, before climbing Moon Hill a few kilometers down the road from there. Around 5 pm we were back in town, took a shower and had a cold beer on a balcony overlooking West Street.

Moon Hill, Yangshuo, China

Moon Hill, Yangshuo

At night we had dinner before going to the 9 PM showing of Impression Liu Sanjie, an impressive light show with a cast of over 600 people. I had seen the show before, but it was still impressive. After the show we strolled through town and again ended up at Mojo where we finished most of their stock of Heineken beer (the waitress remembered us from the night before because we were the only ones not drinking the cheap local beer!).

It's extremelyh busy in West Street at night (Yangshuo)

West Street late at night, extremely noisy and busy with Chinese tourists

On Sunday we decided to rent better bikes and ended up at Bike Asia, probably the best place in town to rent mountain bikes. And not expensive either, we paid just RMB 70 per bike (USD 10). Service is excellent and they even give you a decent map!

Bike Asia, great place for renting bikes in Yangshuo

Bike Asia, the best place to rent bikes in Yangshuo

We first crossed the Li river to check out a hill that I had considered buying in 2006. It was now a resort and we had some drinks on the terrace overlooking the surrounding mountains and the village of Yangshuo below us. We then drove to the north on the west side of the river and had drinks at the Secret Beach, close to the place where the boats from Guilin land. A nice place and we were the only guests. At 4:30 PM we were back in town, got our luggage and took a taxi back to Guilin airport.

Danny and Marc having a refreshing drink during a bike ride

Drinks at Secret Beach with Danny Wilms Floet

It was a great trip with lots of exercise and lots of beer. Yangshuo has changed a lot, but it’s still a nice place as long as you stay away from West Street during the evening. If I should ever come back I will for sure not stay on West Street anymore (nor in a place owned by the Rosewood Hotel, the place that sold us the fake wine), but there are many decent hotels within a few minutes walking distance from West Street.

View over Yangshuo

West Street, Yangshuo

I put some of the pictures that we took during the trip on Flickr, you can see all of them here

Scott’s first golf lesson

Scott's first golf lesson

Close to our house is a golf course, the Hongqiao Golf Club, with a 9-hole course and a driving range. When we moved to our current compound I thought I would finally be able to play golf more regularly, but I did not play golf there once over the past 4 years… All my own fault, I was just too focused on work, but that will probably change. The reason is that Scott will now learn to play golf and today he had a short introductory lesson.

Driving range at the Hongmei Lu golf club

Upper level of driving range at Hongqiao Golf

We walked over with both kids this morning and they were excited to see all the golfers hitting golf balls from the 2-level driving range tees. We went to the upper level where the golf academy is located. It’s a school with some excellent PGA professionals and they also teach kids. We signed Scott up for 10 lessons and he immediately received a short introduction by one of the pros.

Elaine watching Scott who learns to play golf

Elaine looking at her brother hitting a golf ball

Scott got a short iron (these short kids golf clubs look cute!) to hit his first balls with, then got a quick instruction from a pro and within 5 minutes he was hitting his first balls. Elaine was watching him and seemed to like it as well. But because she is only 3 we want to wait at least another year for her to start playing.

If you are in Shanghai and like to play golf, the course is on Hongmei Lu (entrance just south of City Supermarket), more info see here.
If you want to brush up on your golf skills or send your kids here check out the golf academy at www.qiuyigolf.com. It’s not cheap though, because this is the closest golf course to downtown Shanghai. Prices start at RMB 680 (USD 110) per hour for a Chinese professional and RMB 880 (USD 140) for a PGA coach. If you buy 10 lessons and prepay you get about 20% off, other packages are also available.   

The Big 4-0

I turned 40 today, a good day to reflect on my life so farToday I turned 40 and it is also exactly 10 years ago that I set up my first business. On October 11, 2002 I registered my first company, while studying Mandarin Chinese at Beijing Foreign Language University. It was a decade that seems to have flown by , even though (or maybe because) so many things have happened. I founded or co-founded 4 different companies and invested in a lot more businesses. It was quite a rollercoaster ride, with huge ups but also some very deep downs. I had some great business partners, but also encountered a couple of frauds over the years (one of them is in jail now in the US for the next 10 years, another one was declared bankrupt after a court case in Germany, and one of them is still doing business in The Netherlands).

I had a lot of sleepness nights over the past 10 years as an entrepreneur, a lot more than I would have had if I had stayed in my job at Daimler. But looking back it was absolutely worth it, and not only financially. I learned so much about different businesses and I got to know some very interesting people. I traveled a lot and have probably seen almost as much of the world in the past 10 years as in the 30 years before that.

And privately lots of things happened as well of course: I got married in 2005 and now have 2 wonderful kids. If you had asked me 10 years ago, the idea of getting married or having kids would have scared me. But now I realize that having kids was the best thing that ever happened to me, something that changed me completely. I am quite happy, I would not call myself a family man but I am doing my best trying to become one.

Over the years I ran marathons, climbed mountains and biked through the Himalaya. And of course I started this blog in September 2004 and now have over 60,000 unique readers coming to this site every year. I moved a lot as well, I lived at 7 different addresses in Beijing and Shanghai during the past decade. And amazingly I am still in China, that’s not something I had expected.

I set myself some work and life goals when I turned 30 and reached most of them. But I am not setting myself goals for the next 10 years anymore, at least not work wise. Of course work will still be an important part of life for me, but I hope I’ll never work as many hours per week as I did since I turned 30. Enjoying life with my family and friends has become more important, and not to forget staying healthy: a few of my friends already passed away over the past years. And if blogs are still around in 10 years I hope I’ll still be writing regular updates about my life, work and travels!

Universal Studios Singapore

Entrance to Universal Studios Singapore

The highlight of our vacation on Sentosa last week was a one day trip to the Universal Studios Singapore theme park. This 2-year old theme park is latest addition to the 4 Universal Studio theme parks (the others are in Orlando, Hollywood and Osaka) and is located in Resorts World Sentosa.

From our hotel room balcony we could see part of the park and there was advertising for the it all over Resorts World Sentosa, so already the first night we decided to visit the park during the week. Because it would be too busy during the weekend we decided to go on Monday morning. However, when we arrived at the entrance of the park we saw huge lines at the ticket offices so Grace checked with a staff of the park. He told her that Monday was often a very busy day because most of the tour groups go on this day (they are not allowed in on the weekend). Then we saw that the park also had a VIP entrance without any people, so we checked what the definition of VIP was. Turned out that if you pay about USD 250 per person you get a personal guide who will arrange your whole visit for you (pictures with cast members, good seats at shows) and best of all, you would not have to wait in any of the lines.

Universal Studios Singapore

With our Universal Studios guide in the theme park

Because I hate waiting in lines, especially with young kids, that was an easy choice. We talked to one of the theme park reps and bought tickets for the next day (the person convinced us that it would be a lot less busy on Tuesday and it would therefore be a more fun experience). That was a good choice, because the next day it was indeed a lot less busy (but still with lines of up to 1 hour for the rides). We had a nice guide showing us around, he had worked at the park since its opening and was very passionate about it. He immediately arranged a stroller for the kids because walking around for 6 hours or more in the tropical heat is hard on adults already and on kids even more so.

Universal Studios Singapore

Universal Studios Singapore

We started off in the Madagscar part of Universal Studios, where we took the Crate Adventure ride (a boat ride through the ship that takes the Madagascar cast from the New York Zoo to Africa). I felt a bit embarrased that we could just move into the front of the line, but it was quite convenient. I guess this is only possible in Asia, do theme parks in the rest of the world also have this kind of arrangements if you extra? The kids liked the ride a lot and almost wanted to do it again until they saw the merry-go-round next to the Crate Adventure. That one also had the Madagascar animals in it and the kids had a great time riding them in the carroussel.

Universal Studios Singapore

After that ride we went to the Donkey Live theater, where the donkey from the Shrek movie gave a performance. Again we did not have to wait and had reserved seats waiting for us in the middle of the theater (best seats in the house). Once again I felt a bit strange about it, but it certainly beats waiting in line outside for a long time and then scrambling for seats with hundreds of others. The donkey show was quite fun, with an animated donkey that could talk and joke with the audience. Having the best seat had the downside that I was asked to stand up and I became part of the show. The donkey of course made fun of me, which Scott and Elaine obviously liked a lot.

Universal Studios Singapore

We did a few more attractions and then did a private photo shoot with the cast of Madagascar, right before their show started. Once again the kids were very happy, especially when they could watch the animals in their show a few minutes later aw well. After the show other visitors could take one picture with the cast (long lines formed for that), but we did not have to wait for but decided to go for lunch. We walked to the New York part of Universal Studios for a huge (20″) pizza and some other snacks, followed by a Sesame Street cast show. Because there was no opportunity to do pictures before the show we could take pictures right after it, again by being put in front of the line of other tourists…

Universal Studios Singapore

Because we never had to wait we could do almost all rides in a day, normally that’s impossible. One highlight was Dino-Soarin’, that Scott took a couple of times with me (you can just ride it as often as you like because you don’t need to wait in line). It’s basically a merry go round in which you sit in a flying dinosaur that can ‘fly’ up if you press a button. Elaine did not dare to ride it, but Scott was screaming from excitement. He probably could have stayed in it the whole day if we had not told him to get out.

Universal Studios Singapore

Dino-Soarin’

Our guide told us that the Canopy Flyer would be fun for the whole family. But this flying swing ride turned out to be quite scary, even for me. Elaine took it with Grace, who was afraid that Elaine would fall out, and I had the same scare when the ride started off much faster than I had imagined. I held on to Scott and told him to just close his eyes. That worked and he was a bit shaken but still okay after the ride ended. But Elaine was in a complete shock and was looking at me with big eyes without saying anything. It took 15 minutes before she had forgotten about the ride and started talking again. She did not want to do any new rides anymore afterward, and Scott followed her in that.

Universal Studios Singapore

The scary Canopy Flyer

Because of that I did the Jurassic Park Rapids Adventure on my own (the kids could watch me during the ride and even try to shoot me with a water pistol!), which was a pity. I also did Transformers The Ride, which I did not have high expectation of before I went in but which totally blew me away. This was by far the best ride in the whole team park for me! It’s a ride in which you wear 3D glasses and in which you are part of the Transformers movie. It’s a bit like a 3D flight simulator, and it’s probably the best attraction in all theme parks I have been to in my life. Grace and the kids were in the family room of the ride watching a Transformers movie with the guid, and I told Grace she should do the ride as well. But the kids were still so shaken by the Canopy Ride that they did not want their mummy to go away from them, so she missed out on this one.

Waterworld at Universal Studios Singapore

Waterworld as seen from our room above the audience

We did a few more shows, among others the Monster World musical show in Hollywood (great musical, Broadway quality using recent pop songs) and the Shrek 4-D movie, and then went back to Dino-Soarin’ for Scott and to the merry-go-round for a few rides for Elaine and Scott. We ended the visit with the Waterworld show which was fantastic: the whole atol from the movie was rebuilt and actors in boats, jet skis and on water skis acted out an action scene. One word: Wow! We had a VIP room above the audience from which we had a great view over the whole set. The room was aircoditioned and we got cold drinks, which was very nice after a whole day in the Singapore heat (and as an added advantage we did not get wet!).

Waterworld at Universal Studios Singapore

Waterworld

The visit to Universal Studios Singapore was totally worth it, and also the VIP tickets were a good choice. I still feel a bit bad for the other tourist when our guide put us to the front of the line without waiting, but it’s something I could get used to! The park itself is at least as good as Disneyland in Hong Kong, although our kids liked many of the Disney characters better than the Universal Studio ones. Recommended if you are in Singapore for a few days with the kids, just don’t take 3 and 4-year olds into the Canopy Flyer.

Universal Studios Singapore

The Casual Vacancy – J.K. Rowling’s first adult book

A Casual Vacancy

I just finished reading J.K. Rowling’s The Casual Vacancy. It’s not an easy book to read for the average Harry Potter fan, which partly explains why the book has less than 3 stars on Amazon right now. But I loved it, although it took me some time to get into the story. I started reading not long after the book came out on Sept. 27. I pre-ordered it months ago and it was downloaded automatically to my Kindle after the embargo was lifted 9 days ago.

Rowling uses the 500+ pages of the book for a detailed story about a small rural English town and the secrets of its inhabitants. The peaceful village turns out to be a whole lot less peaceful than you would think. I won’t reveal too much in case you want to read it yourself, just be prepared that this is not a children’s book but adult Literature (with a capital L!).

The novel is currently #1 on the US Bestseller list, but I wonder how Americans will like it. This is a very British book with a different theme than the average US novel. The book actually has quite a socialist undertone: that we should help less privileged people, including drug addicts, is a major theme of the story.

I guess this will be a book that will divide its reviewers, the professional literary critics will like it (there are quite some good reviews out there already), but the average US reader might put it away after 100 pages. But whatever you think of it, I believe this is a book that will have a place in literary history, even if it’s just because of the fact that it’s Rowling’s first adult fiction book after the famous Harry Potter series.