How investing in consumer loans helped this lawyer save for a home deposit

Damon Angus, 45, is a senior counsel at Allens, a law firm in Sydney, where he specialises in corporate finance and financial innovation. Following the birth of their first child, Damon and his wife decided to save for a new house. We spoke to him about how RateSetter^ has helped them accomplish that goal. 

How did you learn about Plenti?

I was already familiar with consumer lending from work, so I first learned of Plenti when it was still a young company, about four or five years ago.

Why did you choose to invest in consumer lending?

When I started looking for a consumer lending investment option, there weren’t many consumer lenders in the Australian market. Plenti stood out because it offered a retail product and had been awarded an investor certificate.

As a finance lawyer, I always expect that any investment provider I would consider has impeccable accreditations – on this score, Plenti impressed me and I made my first investment in 2016.

What was your main objective as an investor?

When my wife and I had our first child, we realised that we’d need to move into a bigger house: and that meant saving for one. Our primary goal was to find an ethical and relatively safe investment that offered a better return than a bank term deposit.

As such, consumer lending was perfect for us and it also fit well into our diversified investment strategy.

It’s a little riskier than a term deposit, but we felt reassured by the Provision Fund that protects Plenti investors and I also took into account its past performance.

Did you invest in one of the longer-term markets?

No, we’re actually invested in the 1 Month Rolling market. That’s simply because we’re saving for a house and can’t say exactly when we’ll need to withdraw our funds.

How do you monitor the performance of your current investments?

Our focus is on getting a better than bank rate return on our investments. consumer lending is a good way of achieving that outcome. With Plenti, you can see rates on the dashboard, compare them, and check that you’re getting better returns than the bank can provide. Every month, the interest on our loan is automatically reinvested. It’s really easy.

Have the RBA’s rate cuts affected the way you manage your investments?

Not really. I had already chosen investments that outperformed bank interest rates, so the rate cuts are really just a confirmation that I made the right choice.

Has investing in consumer loans met your expectations?

Absolutely. Consumer lending has performed far better than our term deposits. As a result, we’ve continued to add to our initial investment and now have about $900,000 invested in consumer loans on Plenti’s platform. Even after we find the house we’re saving for, we see consumer lending as having an ongoing role to play in enhancing our investment portfolio.

Do you have any advice for investors who might be interested in investing in consumer loans?

I think you’ll find consumer lending quite easy to understand. Once you’ve done a small transaction, you’ll figure out how it works without any trouble – the learning curve is easy to climb. So, if you’re looking for somewhere secure to store your money, investing in consumer loans is a great choice.

It’s a relatively liquid investment and, because of the Provision Fund model Plenti uses, in my view, it’s safer than other options.

Daniel Foggo

Written By Daniel Foggo

^Plenti was known as RateSetter prior to July 2020.