August was a crazy month for Savings4Freedom! Everything happened so fast that almost feels like I was writing the July portfolio update yesterday.
The speed of the P2P lending industry is incredible. The amount of information required to access, process and decide over in order to take informed actions grows faster than my capacity to deal with it.
Based on this reality, I decided to set up a group of P2P lending investment principles that will make much easier for me to take action in the future.
Buyback Guarantee: Only invest in P2P loans that provide Buyback Guarantee (for security reasons);
Minimum Return: Only invest in P2P loans that offer an interest rate above 12% per year (the ROI and Yield need to justify the risk);
Early Exit: The majority of my investments should have available some type of early exit from the P2P loan position (through buyback or secondary market, for liquidity reasons);
Cashback and Bonus Offers: I want to maximize cashback and bonus opportunities to leverage my P2P lending returns (at the end of every platform month overview, I share the cashback and bonus opportunities available in case you use my referral links, that I really appreciate if you do to support this blog).
Diversification: I want to distribute my funds across different types of loans, geographic locations, maturity and mainly P2P platforms (diversity is king).
Please let me know your thoughts on this subject. Do you agree with these principles? I welcome any ideas that can help me improve this list.
I recently published one of the articles that more fun offered me writing it. I was challenged by some Savings4Freedom readers to reflect on what I did wrong and how I would do things differently if I started from scratch investing in P2P lending. It was a really important exercise for me in order to conscientiously realize the progress I have done until now. But the best part was realizing in a positive way that I’m really looking forward to experiencing what the future will bring in my path towards financial freedom.
You can read the article by clicking the figure above.
Over the past week, I received a significant number of messages with questions on how to start investing in P2P lending. During the preparation of my replies, I realized that the best way to share my experience and opinion was imagining that I was starting all over again today…
Rules for the Exercise: Amount, Maturity & Moment in History
Let’s define for the purpose of this exercise a budget of 10.000€ for P2P lending investments. Let’s consider a timeline for deploying my investments of 12 months and take into consideration my current knowledge within the European P2P lending industry in August 2019.
Key Questions to Answer
Now, I just need to answer the following questions:
Which steps would I follow to invest 10.000€ in P2P lending?
Which P2P crowdlending platforms would I choose for my investments today?
How would I spread my 10.000€ among my selected P2P platforms?
What strategy within a 12 months timeframe would I follow to maximize earnings with the least time effort from my part?
iban Wallet is a fintech startup that follows an asset-backed loan investment model similar to Robocash: black box loan investing. This means that you don’t know the loans that are receiving your investment, you are only able to select the investment tier and duration.
You can invest and earn your interest daily from 2.5% up to 6% per year, being able to deposit and withdraw money daily. The minimum deposit and investment amount required is €1.
Funded in July 2016 in the UK, the company received funding through multiple crowdfunding campaigns that financed the development of the iban Wallet App, launch in March 2019 and the business development to recruiting investors in Europe (mainly from the UK and Spain) and borrowers globally.
iban Accounts do not fall under any government-backed deposit protection schemes (such as the FSCS in the UK) and all investment done is at risk. iban Wallet is not a savings account.
With a small delay, here is our Savings4Freedom monthly update!
I’m really happy with the way my P2P investments are evolving this year. By choosing to invest in P2P lending, every single day I’m confronted with the need to learn new aspects of the industry and improve my processes for efficiency and security.
As I described in my previous update, I’m continuing to shift funds between P2P platforms to diversify and increase my average portfolio interest rate results. In July, I opened accounts in Monethera (very good experience so far) and iban Wallet (a nice complement to my P2P portfolio for money liquidity reasons). You can check my first impressions on both platforms later on this publication.
I also want to share that from now on, I’m sharing with the community my Financial Literacy Video Library to FIRE (financial independence and retiring early). I love to learn and I want to share some of the best videos I found with you.
Loan Originator Issues: Aforti
P2P platforms such as Viventor and Mintos shared this week that one of their Loan Originators (Aforti). One of the risks of investing in P2P lending is the loan originator. You can check the Risks section on this dedicated page to learn more about other aspects to consider before investing.
But, without any further due, let’s see the numbers!
Monethera is the most recent player to join the P2P business lending ecosystem. You can invest in real estate projects, business loans, green energy, logistics or technology companies and earn up to 22% per year in interest. The minimum deposit is €100 and the minimum investment required is €1.
Available to the public since June 5th, 2019 Monethera presented a fresh website, but to my surprise, initially almost all texts were an exact copy of Envestio website information.
Nothing wrong in following the example of other platforms well-liked among the community. After what I imagine was a lot of angry messages from the community complaining about this fact, the Monethera team quickly updated texts and the information available. I must highlight the capacity to listen that the Monethera team showed since the very first email exchange. It seems that they are available to listen and to implement changes based on actual feedback.
Monethera offers among the best interest rates in the business with buyback guarantee. If you sign up and invest through my referral link, you will get €5 and 0.5% cashback from all investments you make within the first 90 days. Since I started investing at Monethera in July 2019 I was impressed with the platform, projects, and returns. It is hard to believe that there is a possibility to invest in projects with higher than 20% annual returns and offering a buyback guarantee.
Creating a Monethera investor account only took a few minutes. Registration is extremely simple and the platform is very easy to navigate. Since the number of investors is still growing there is no need to keep money drag. The projects are kept open for a significant period of time, but you receive interest since the moment you invest.
Based on messages from people asking questions about P2P Crowdlending, I decided to create a dedicated page that will be continuously improved based on the best available industry information. The initial information source for it was a White Paper published by Grupeer in the fall of 2018.
On Friday the 7th of June, over 240 people among P2P platform representatives, P2P investors, and bloggers came together in Riga for the 1st edition of the European P2P Conference. This P2P Conference was certainly a memorable one! Taking place at the wonderfully unique RISEBA Architecture and Media Center H2O 6, this event brought together people from 24 nations representing the entire community to display just what makes P2P crowdlending so unique – its diversity, its cross-sectoral nature, and its collaborative spirit.
The event, hosting interesting keynote speakers, an array of informative presentations, and topped off with a fun evening and second-day entirely dedicated to networking opportunities.
Hi Savings4Freedom friends!
May was a consolidation month, looking to better understand how to manage my P2P investments and maximize their potential. I’m especially proud for finally being able to present you with a dedicated page where I compare the multiple P2P lending platforms I have accounts on.
Since the number is growing in a significant way, there is a need to quickly compare and share my honest opinion. Please feel free to offer your input on the comments box or contact me directly.
I’m really happy to travel this week to Riga to join and meet other P2P crowdfunding enthusiasts for the first European conference. It will be a wonderful opportunity to learn, meet with platform representatives and open a direct dialogue with other investors.
But, without any further due, let’s see the numbers!
February was a specially painful month for me. The loss of a very important family member is always a defining moment in everyones life… apologies for not publishing last months report. I updated all information on the blog over time, but not a post… thank you for understanding.
Live goes on and here is the April 2019 S4F report.
Some quick notes before you start investing in crowdlending platforms…
When you research a new crowdlending platform, it is not only important to look after the expected return and platform usability… There’s quite a few other, more relevant details to evaluate before investing:
How old is the platform?
Who is the management team?
How do their financial reports look?
Is it a single- or multi-loan originator platform? How many loan originators do they have?
Do they offer buyback guarantee on your loans?
What is the minimum investment in loans?
Which loan types do they offer?
Do they have autoinvest functionality?
Do they accept investors from your country?
For each of the platforms I present on S4F you will find a review in their info pages, based on my experience. It is a mix description based on credibility, size, functionality and support as criteria for the review. I also try to read what is the word on the street from other investors in the personal finance ecosystem.
Please feel free to contact me over email [email protected] and share your opinion, comments or suggestions on the topic above.
If you enjoyed this post, please hit the like button below and/or share it with your friends. Thanks for the support!
I will try to offer you these updates on the 1st day of every month. The idea is to provide you with a transparent manner to check my monthly returns and the cumulative results of my investments.
Over the next month I will work to improve the blog layout and structure. I welcome any suggestions you may have to enhance how the information is presented. If you are here for the first time, please check out the other pages on the blog and let me know your opinion. Thank you for your support!
I’m Carlos, a 33 years old PhD, and startup founder. I live in Portugal with my wife. I always had the mental drive to save money, but never with financial independence in mind. Only at the beginning of 2018, I decided to structure my efforts towards freedom. This blog tells you all about my path, decisions, and mistakes.
I face strong limitations regarding my financial freedom, however, I don’t have any doubt that I will be able to achieve this personal goal of becoming financially free. Anyone can reach financial independence. It’s all about the way you wish to live and the costs necessary to sustain such a living standard.
I learn to save money with my Father. He was a hardworking and honorable man, entirely committed to supporting his family. I saw his effort to support my studies and his energy to provide me the opportunity to fly high without financial concerns. My Father is my hero.
There are many different ways to achieve financial independence, but you always will need to follow these: