Does the TOS for Lendingclub mean 10% of your net worth per note or in total?

Question

Lendingclub's TOS requires that if you do not meet other conditions, you can only invest a maximum of $2,500 but regardless of the cap, you can't purchase notes "in an amount in excess of 10% of your net worth..."

(c) can invest no more than $2,500 in Notes if you do not meet either of the tests set forth in (a) or (b); or (iii) if you reside in Kentucky, you are an "Accredited Investor" as determined pursuant to Rule 501(a) of Regulation D under the Securities Act of 1933, as described here (iv) regardless of your state of residence, you agree that you will not purchase Notes in an amount in excess of 10% of your net worth, determined exclusive of the value of your home, home furnishings and automobile.

Does this mean per note or does it mean that the total amount invested in notes cannot be more than 10% of your net worth?

Answer 1

They are limiting your total investment in Notes to no more than 10% of your net worth.

Step 1: determine your net worth

Step 2: Divide this number by 10

The answer is the maximum amount you can put at risk through Lendingclub. The issue is that if you lose all the investment you will not be bankrupted.

If it was the other way you could invest all your net worth in Lendingclub by splitting it among 10+ notes.

Your net worth is

"determined exclusive of the value of your home, home furnishings and automobile."

Which means don't include the house and the stuff in the house. That means your net worth is the money in the bank; plus the money invested in stocks, ETFs, and mutual funds; plus retirement accounts (401K, IRA); minus loans (student, credit cards).