Sunday, 7 October 2018

First user experiences of TruePillars


Signing up to Truepillars was a very straight forward process, entering in an email address and password.  You then select what who you are wanting to invest as (an individual, a trust which includes self-managed super funds or as a company).  From there it’s a matter of stepping through a series of straight forward questions (Name, address, tax file number, etc) to register your account.  All of which took mere minutes.  After that the next set is to transfer some money into your account via BPAY so you can start trading.

Once the money hits the account you are ready to invest.  It is important to note any money sitting as cash does not earn any interest.  Thus to maximise your returns, it is best to buy into loans as soon as possible.  When I set up my account there were no new loans to bid on.  So I looked at the secondary marketplace to see what loan portions people were selling off that I could invest in. 

Just to explain the difference, a new loan is a loan put forward looking for investors to fund it.  It is done via an auction style system starting with the highest interest rate on offer and working down the range.  Once fully funded, bids start lowering the interest rate on offer to buy into the loan.  This effectively “out bids” another investor or in layman’s terms, you are offer to invest funds into the loan at a lower rate of return then someone else.  At the end of the auction the Business who has applied for the loan is offered the weighted average interest rate of all winning bid investors.  The secondary market place is where loans already funded through the auction process can be “cashed out” by investors.  To achieve this, you need a new investor to buy your stake in the loan you want to cash out of to ensure the loan remains funded to the business.  With the above in mind, I have observed the secondary market place is reasonably active with investors buying and selling loans regularly. 

I’ve also found you can browse the marketplace (both new and secondary) without an account including what is for sale and the general details of the loan.  However to view the additional information such as the financial statements and loan repayment history you need to log into your account and have made a deposit that has cleared into your TruePillars account. 

Looking at the secondary market place and reviewing the different loans currently on offer I bought into three different loans in completely different industries with varying interest rates and remaining loan terms.  The process was very straight forward by selecting on the listing amount you wanted to purchase and clicking on the button to purchase.  The money is detracted from your available cash and the loan investment is now yours earning you the interest on the loan. 

When you are logged in you can view a dashboard which provides several different tabs detailing elements of your portfolio of investments.  The summary page gives you a great overview of where your portfolio sits, from available funds to invest (cash), live bids and pending loans (bids won but awaiting issue to the borrower) and funds invested.  I also like the running total of interest earnt since becoming an investor and the weighted average interest rate you are receiving on all the loans you have invested.  I also like the investments tab which shows all your loans listed out along with when the next payment of capital and interest is due.  Dropping down the loan details on the right you can also more details about the loan including the break up between capital returned and interest received.  The report tab gives you the ability to run a number of reports giving you an overview or details of your investments to date.  There is the ability to set up auto-bidding on new loans but I’ve not tried this function yet. 

Overall, from my first user experiences, I’ve found the TruePillars site to be super easy to use.  This included making your first investment buying a loan to reviewing your current position via the dashboard.   Happy to hear about other people’s user experiences of the Truepillars platform.  Now that I’ve had a chance to see how the site works and how easy it is to purchase investments I’ll start to explore and document the different strategies I’m looking to maximise my returns.

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