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This article was originally written by and for Grownups.co.nz
Invest securely. Borrow simply. It’s a modest concept, but until now neither banks nor private lenders have quite been able to master the model. That’s why we’ve fallen hard for Zagga, a new breed of lender that’s been shaking up New Zealand’s investment landscape. Powered by an intelligent online platform, Zagga simply matches eligible investors with creditworthy borrowers to create real returns for real New Zealanders.
We’ve already explored the benefits for borrowers, but what about investors? After all, Zagga is 50% rapt on unlocking access to higher-yield asset classes that make Kiwi cash work harder. So how could Zagga work for you? Let’s take a look at a handful of case study examples that show how everyday New Zealanders can use Zagga to make their cash work hard and fast.
Investing the nest egg
Ian and Janet are both retired, and will both be turning 70 within a few years. They’ve paid off a mortgage on their family home but don’t want to sell or downsize as they’d like a few more years to enjoy the space in their retirement. They have $50,000 in retirement savings and would like to invest, however as this is a major chunk of their nest egg they don’t want to get involved with anything too risky. When researching investment opportunities online Ian comes across Zagga. He’s attracted to the safety aspect, and he’s not alone. While some investors are more concerned about quick returns and high ROI, according to the company’s research 87% of retired investees agree that security is the most important factor when considering a financial investment. With Zagga, Ian and Janet’s loan will be backed by a secured asset, typically a registered mortgage over the borrowers actual property. The loan is individually registered in the name of Magna Trust Company Limited, with Ian and Janet recorded as beneficiaries for their fractional share of the loan and underlying security. Their investment funds are then deposited into a dedicated trust account used specifically for funding the loan they elected to contribute towards.
Reaping higher returns
When 83-year-old Tom Enright started searching for an extra string to his investment bow, a term deposit seemed like the natural choice. The career pilot had just lost his wife of 30 years, had downsized his home and had extra cash to invest. He decided to break his existing bank term deposit a few months early however after chatting to his manager he was informed that in order to withdraw his cash he’d need to take out an overdraft backed by a 19% interest rate. It was then that he decided there must be a better way to make his money work harder. With the help of his son he decided to become Zagga’s first investor, and he hasn’t looked back. For Tom, P2P lending with Zagga has meant two years of easy investing and high returns. Tom’s first investment of $542, 000 funded a residential re-mortgage in Auckland which earned him a net return of 7.84%. His second smaller investment also earned over 7% interest, a noticeable increase from the bank’s 3% term deposit he was earning two and a half years ago. Since then, the cash savvy grandfather of nine has funded multiple Zagga investments and enjoys total control over where his cash is going and what it’s funding. Like all Zagga investments, Tom’s cash is secured by mortgages on real property, leaving him confident that he’ll recoup his investment.
Diversifying investment portfolios
Liz and John are on the hunt for new investment opportunities, as they’ve just sold their family home and have $500,000 to play with. While Liz is curious to know more about the P2P lending trend (one of her friends has just invested with Zagga), John is adamant that a term deposit with his local bank is the way to go. After all, they’ve been investing with BNZ for decades and have seen great results. John’s also highly sceptical about P2P lending, and he’s not alone. As a reasonably new investment option in New Zealand Zagga has seen that 28% of retirees have a lack of knowledge and awareness around the technology and the security which Zagga provides. John falls into this category, though lucky for him his wife has a curious streak. After researching investment opportunities with Zagga John realises that it unlocks the freedom to diversify their investment portfolio, without putting all their cash in one basket. Mostly, he’s won over by the fact that Zagga offers him the freedom to retain absolute control over his loans, and what types of borrowers he wants to fund.
Ultimately, Zagga is all about making your money work harder, backed by investment opportunities that are simple, fast and secured. You’ll always retain absolute choice and control over your investment preferences, with loans typically secured by a registered mortgage over the borrower’s property.
Tom Enright words it perfectly, explaining that “My view remains that there are two cardinal points to watch for. One is the integrity of the people you’re dealing with… at Zagga people know what they’re doing and are completely above board. The second thing is of course to ensure that one does have adequate security.”
Want to know more about how Zagga could work for you? Click here to get in touch with one of the company’s friendly reps to chat about secured investment opportunities with New Zealand’s favourite P2P lending platform.