Early Retirement

Five steps to take in 2021 to start your FIRE journey

FIRE is a marathon, not a sprint. And like any marathon you need to prepare. You won’t know where you are exactly until you prepared. With a new year coming up now is the perfect time to set these first steps! Trust me all the calculators online and simulations online will not be able to tell you the same as your very own data.

1. Start to track your income

Probably most people will be able to give some indication of how much they make per month. But what about your holiday bonus or end of year bonus? What about your tax returns? What about side incomes? They are quite common in Belgium but most people don’t know how much this exactly is. So how much do you actually make in a year? How much is your income rising each year? Start writing this down every month, and do this for at least a full year.

2. Start to track your spending

White tracking income is for most people fairly easy as its just writing down wages and tax returns every month spending is a bit more challenging.

Now firstly you need to decide where you write this down. My personal favorite: google sheets. You have it online, on your phone and has all the basics you need to start.

To make it a bit easier to input data into google sheets you can use side tools. For example KBC has a very good tool that is already displaying your expenses in different categories. I use much of the same, or at least very similar, categories in my sheet. Check out what they are on my monthly savings rate reports. My categories might not be the same as yours by the way. You don’t want your categories to be to small or to large.

3. Research investment opportunities

Rushing into investing might be an expensive lesson. Do your research first. Check out FIRE bloggers who have been on this journey for years and learn from their winnings but more from their mistakes. For example when I started I thought peer to peer was a good way to reach FIRE but it turned out to be very risky.

98% of people going for FIRE will concentrate on the stock market and real estate. Stay away from alternative investments and go for the types that are proven to work.

4. Find out what really matters in life

FIRE is about what really matters to you in life and what makes you happy. For example when I started tracking my expenses I found out I was spending 500 EUR on restaurants per month. To be honest I eat out to be around people, I personally don’t mind that much if I eat a home cooked meal or a 3 star menu in a restaurant, its just fun being out.

So I budgeted myself at 100 EUR per month for restaurants, avoided high-cost restaurants and ordered more often simpler food if I did go out, like croque monsieur for example.

In order not to alienate myself from others I started focusing more on sports and found that this is actually a good way to be around people as well. One downside is that sports costs as well. But at least when you buy stuff its much longer lasting then a 1 hour meal.

Find a good balance between going for FIRE and living your life. your life on hold to save every penny. Knowing what makes you feel good and what can make you happy without spending needlessly is a good start. Make sure you make progress but also avoid putting your life on hold since even in a marathon you need to stop for some food and drinks from time to time to keep you going.

5. Decide on why you want to retire early

Lastly you need to know why you want to retire early. This will help you in your journey to make the right choices. In my case its not necessarily because I don’t like to work (although I do have some of those days) but its also to keep my options open, and because I don’t fully trust the Belgian government that they will have enough money in 30 years to let me retire safely.

2021 is coming and its the perfect time to start to plan! Remember this is your preparation, only when starting these 5 steps you will be able to take the next step to calculate when you can actually FIRE.

Financial Independence · investing

October 2020 Portfolio update: 2nd wave is giving a blow to the markets

Investment update in September 2020

With countries all over Europe taking measures to slow down the second wave markets are not responding well. While the drop is nowhere near the first wave right now, we can clearly see the first drop since the first wave passed. There is not much to do about it in the short run except to wait it out.

On peer to peer investments Crowdestor has opened a secondary market, that hopefully will speed up my exit. More about Crowdestor bellow.

Also Belgium has imposed another lockdown. Lots of sports I did are now no longer allowed. That includes swimming, fitness, spinning and tennis. On top of that bars, restaurants and all non-essential shops are closed. Not to mention cultural venues, fun parks and zoos also should remain closed. What hasn’t happened yet is a lockdown where we are limited in our movement. Belgium has the 2nd highest number of intensive care beds per head of the population in Europe and even our hospitals are getting overrun. I am just wondering how other countries do this without going into lockdown. One thing I am worried about is all the debt we are taking up. One day we will need to pay those back with taxes.

I can still mountainbike and run fortunately., but its not easy to fill the time. You can see people hamster again in the supermarkets, something that I will not be doing. I need fresh food and can’t survive a month on canned food. Hamstering is an automatic reaction people have when they see empty shelves. Then they automatically want to buy more. To be honest if I lived in a house with enough storage space I would have already had some supply of long lasting food, but on an apartment its not worth it for me to use up space to store food.

Alright enough stuff about my life lets go and check how much my portfolio dropped or increased.

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My Portfolio

My Portfolio has dropped to 67009 EUR (-1260) even though I invested an additional 1000 EUR, so it just shows how big the drop was this month.

Lets look into more detail for each of these investment types shall we.

ETFs

The stock market continues to drop giving me a total loss of -2227 EUR since I started with the bellow stocks (January this year).

Inception DateTotal PortfolioMonthly P&LTotal P&L
SPDR MSCI World UCITS ETF (SWRD)31/01/202036483-983-2120
IShares Core MSCI EM IMI UCITS ETF (CEMU)28/02/20202346-42-107
Total ETF Portfolio30/09/201938829-1025-2227

At this point I am really happy I limited my portfolio to just two ETFs, it makes it so much easier to track! And I keep finding it very easy to invest with DEGIRO, I am really happy I chose DEGIRO as broker!

SPDR MSCI World UCITS ETF (SWRD)

My World ETF has made a drop this month unfortunately putting me at a loss of -5.49% since inception.

SPDR MSCI WORLD UCITSTotal PortfolioMonthly P&LTotal P&L
31/01/202025160.4100
28/02/202023674-3852-3852
03/31/202022851-3362-7214
30/04/2020290343627-3587
31/05/202029590556-3031
30/06/202031411-95-3126
31/07/202033825816-2310
31/08/2020355741749-561
30/09/202036924-576-1137
31/10/202036483-983-2120

ISHARES CORE MSCI Emerging Markets IMI UCITS ETF

With a 42 EUR win this month this ETF actually went up slightly

ISHARES CORE MSCI Emerging Markets IMI UCITS ETFTotal PortfolioMonthly ProfitTotal P&L% gain/loss
31/01/2020244800
29/02/20202249-205-205
31/03/20201918.38-331-536
31/04/20202099182-354
31/05/20202064-36-390
30/06/20202211147-243
31/07/20202318113-130
31/08/2020238265-65-2.69%
30/09/20202346-42-107-4.17%
31/10/2020238443-64-2.64%

Peer to Peer

I am left with only 5 peer to peer investments: 2 active peer to peer investments (Crowdestor and TFGCrowd), 1 with 100% of the funds in recovery (Mintos) and 2 where I am trying to recover some funds trough legal action.

I only show withdrawals here. So far I withdrew about 55% (+6%) of the funds I had invested in peer to peer.

PortfolioStartTotal at 29/02/2019Left inpeer to peerExpected end dateMoney left to withdraw
Crowdestor30/09/20192974180925/03/202260.83%
Grupeer30/09/201989908990Defaulted. In Legal procedure100.00%
Iuvo Group31/12/2019224004/20200.00%
Kuetzal30/09/201910051005Defaulted. In Legal procedure100.00%
Mintos30/09/2019998285501/06/20218.57%
NeoFinance30/09/20191273004/20200.00%
PeerBerry30/09/20192548005/09/20220.00%
TFGCrowd30/09/201914348817/09/20206.14%
Total30/09/2019284301274705/09/202244.84%

CrowdEstor

  • Crowestor has more and more delays this month. I normally had 3 projects that had to pay principal this month and none of them came trough.
  • The good news for me is that a secondary market was introduced. I put my projects on the market at 5-10% discount and was lucky enough to sell a little over 30% of my investments so far. I will keep trying to sell more, but projects that are 90 days late are hard to sell of course.

Grupeer

No progress at all from Grupeers side this month. Grupeer created a recovery firm but it seems after one month the bank account of this respectable recovery firm is not yet approved.

My main method to recover funds is legal action. I can say that its moving but very slowly. There is updates but I am not allowed to post them unfortunately.

Kuetzal

I am in a legal procedure with Kuetzal and cannot comment on any non-public information, I wanted to share more this month but I still can’t. I am currently counting on it that I can recover at least 50%.

Mintos

Mintos now allows you to see where they money in recovery is stuck. To my surprise about 200 EUR was also stuck in Monego. The rest is stuck in Capital Service. No progress here unfortunately. To be honest I am strongly considering to write off this investment. While I think I can recover the 200 EUR in Monego, I am not sure at all about Capital Service.

TFGCrowd

I still have 88 EUR in TFGCrowd because of a failed project. Normally the buy back should kick in this month and I should be getting the money back.

Startups

I still have now 3200 EUR in startups invested, I have every intention to withdraw this whenever possible.

Retirement funds

I decided not to update my retirement funds all the time since for most of the funds I get an update just once a year, so I will update it also just once a year. This is from end of 2019. I will update it again in December 2020.

November 2019Current Value
KBC Pension funds7999
First job Pension plan1467
Second job Pension plan592
Third job Pension plan12084

Wins / losses this month

  • My ETF Portfolio made a small 1000 EUR loss.
  • Slowly but certainly I am moving out of peer to peer
  • All the triathlons I wanted to participate in got canceled 😦 I need to move this goal to next year.

What is next?

  • My secret project is still ongoing

I will also post a savings rate update soon! Subscribe and make sure you don’t miss any of my monthly portfolio updates!

Financial Independence · investing

September 2020 Portfolio update: volatile markets during American elections

Investment update in September 2020

I saw the stock markets go up and down like a rollercoaster this month. I heard the American elections are the reason of the volatile markets. Unfortunately it means for the first time since the covid-recovery started I saw a drop again in my stocks. My portfolio still grew slightly but that is more caused by additional investments rather then a growing stock market. At least I was able to buy the extra stocks on one of the low points during the month.

On peer to peer investments Im still trying to recover cash from Mintos, Kuetzal and Grupeer. For CrowdEstor its more the withdrawal from principal that takes time, but more about that bellow.

All triathlons I was inscribed in got canceled. For most I got all the money back, and for one partly. That’s really unfortunate but it will not stop me from trying to inscribe in new sport events. The next event I have my eye on is a 10 miles run at the Belgian coast in November. I have the choice between 8 and 16km and I think I will go for the 16 even though I have not ran more then 8km these last months, I still have some time to train.

I have also completed kite lessons this summer, and found a great bargain on a second hand kit so I can practice by myself. I will post more exact numbers on that during my monthly saving rate update.

Alright enough stuff about my life lets go and check how much my portfolio dropped or increased.

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My Portfolio

My Portfolio has risen slightly to 68269 EUR (+831) this is mainly due to additional investments, as you will be able to see bellow the stock market has gone down slightly this month.

So this months rise was only because of a 1300 EUR extra investment. I’m not able to invest additionally every month, I invest about every 2-3 months, as soon as I can invest over 1000 EUR basically, so hopefully it will rise “by itself” next month!

Lets look into more detail for each of these investment types shall we.

ETFs

It seems the stock market got a drop last month for the first time in months, causing a small loss this month and a total loss this year of 1244 EUR.

Inception DateTotal PortfolioMonthly P&LTotal P&L
SPDR MSCI World UCITS ETF (SWRD)31/01/202036924-576-1137
IShares Core MSCI EM IMI UCITS ETF (CEMU)28/02/20202346-42-107
Total ETF Portfolio30/09/201939270-618-1244

At this point I am really happy I limited my portfolio to just two ETFs, it makes it so much easier to track! And I keep finding it very easy to invest with DEGIRO, I am really happy I chose DEGIRO as broker!

SPDR MSCI World UCITS ETF (SWRD)

My World ETF has made a drop this month unfortunately putting me at a loss of -3% since inception.

SPDR MSCI WORLD UCITSTotal PortfolioMonthly P&LTotal P&L% P&L
31/01/202025160.4100
28/02/202023674-3852-3852
03/31/202022851-3362-7214
30/04/2020290343627-3587
31/05/202029590556-3031
30/06/202031411-95-3126
31/07/202033825816-2310
31/08/2020355741749-561-1.55%
30/09/202036924-576-1137-2.76%

ISHARES CORE MSCI Emerging Markets IMI UCITS ETF

With a -42 EUR loss this month the loss was slightly lower for this ETF.

ISHARES CORE MSCI Emerging Markets IMI UCITS ETFTotal PortfolioMonthly ProfitTotal P&L% gain/loss
31/01/2020244800
29/02/20202249-205-205
31/03/20201918.38-331-536
31/04/20202099182-354
31/05/20202064-36-390
30/06/20202211147-243
31/07/20202318113-130
31/08/2020238265-65-2.69%
30/09/20202346-42-107-4.17%

Peer to Peer

I am left with only 5 peer to peer investments: 2 active peer to peer investments (Crowdestor and TFGCrowd), 1 with 100% of the funds in recovery (Mintos) and 2 where I am trying to recover some funds trough legal action.

I only show withdrawals here. So far I withdrew about 49% of the funds I had invested in peer to peer.

PortfolioStartTotal at 29/02/2019Left inpeer to peerExpected end dateMoney left to withdraw
Crowdestor30/09/20192974297407/02/2022100.00%
Grupeer30/09/201989908990Defaulted. In Legal procedure100.00%
Kuetzal30/09/201910051005Defaulted. In Legal procedure100.00%
Mintos30/09/2019998285501/06/20218.57%
TFGCrowd30/09/201914348817/09/20206.14%
Total30/09/2019284301391205/09/202248.93%

CrowdEstor

  • Some changes at the CrowdEstor site this month! You can now see how many projects are delayed. I knew I had about 20% of my projects delayed, but I didnt knew it was close to 37% of the invested cash. That now becomes clearly visible.
  • The good news is the delay is all smaller then 30 days, so hopefully its normal and they will catch up for the most part.

More good news it that in October normally 400 EUR of principal should be repaid. I’m very curious to see if that money will land on my account this month. We are talking about the projects: Indoor beach volleyball center (II), Family house developer and Construction company (public procurement)

  • Another new item is a secondary market. Crowdestor added a secondary market. I right away listed everything that expires in 2022 and everything thats late with a payment for sale at a small discount.
  • However I don’t have much hope this will work. When I look at the secondary market huge discounts are being given, up to 72.45%! So I really doubt anyone will go for the 2-5% discount offers I have on the market, even if they are not late.

Grupeer

No progress at all from Grupeers side this month. Grupeer created a recovery firm but it seems after one month the bank account of this respectable recovery firm is not yet approved.

Meanwhile my ready to withdraw amount has grown to over 5000 EUR, but of course I can’t withdraw anything.

My main method to recover funds is legal action. I can say that its moving but very slowly, it will take at least a year before anything is recovered, and probably much longer to recover a bigger amount of funds.

Kuetzal

I am in a legal procedure with Kuetzal and cannot comment on any non-public information, I wanted to share more this month but I still can’t. Perhaps in september.

Mintos

Mintos now allows you to see where they money in recovery is stuck. To my surprise about 200 EUR was also stuck in Monego. The rest is stuck in Capital Service. No progress here unfortunatly.

TFGCrowd

I was expecting to withdraw 200 EUR here this month, however this has lowered to 112 EUR. The last 88 EUR has not been paid yet, but falls under a buy-back guarantee, so I expect to have it back in two months. The money I was able to withdraw in September was transferred to DEGIRO.

Startups

I still have now 3200 EUR in startups invested, I have every intention to withdraw this whenever possible.

Retirement funds

I decided not to update my retirement funds all the time since for most of the funds I get an update just once a year, so I will update it also just once a year. This is from end of 2019. I will update it again in December 2020.

November 2019Current Value
KBC Pension funds7999
First job Pension plan1467
Second job Pension plan592
Third job Pension plan12084

Wins / losses this month

  • My ETF Portfolio made a small 500 EUR loss.
  • Slowly but certainly I am moving out of peer to peer
  • All the triathlons I wanted to participate in got canceled 😦 I need to move this goal to next year.

What is next?

  • I will postpone my triathlon to next year. I will train for a 1/4th by then!
  • My secret project is still ongoing. I will probably not be able to share any info about this until January 2021 😦 It sucks because its so exciting but its classified 😦

I will also post a savings rate update soon! Subscribe and make sure you don’t miss any of my monthly portfolio updates!

Financial Independence · investing

Investment update in July 2020

Investment update in July 2020

The stockmarket is rising slowly. Altough its summer, summer has never been a really bull month for the stock market, and with a second wave approaching Europe I am surprised that it is not dropping further. Perhaps its because of the 1600 Biljard EUR the EU will pump in the economy.

On peer to peer investments progress at Grupeers side is really slow right now. When I read the blog of Grupeer I have the impression progress will happen at any time now, but its not happening. I feel like they are holding a carrot in front of me. More about that bellow.

In my personal life sports have taken up such a big part of my life right now, since sport is the safest activity. I subscribed for a Triathlon altough its uncertain right now if it will go on. I will do 1/8 so that means 500m swimming, 25km cycling and 5km running. If it goes well I might try 1/4th of a triathlon. But it does mean I need to train a lot, so a lot of my time is going there.

Additionally (and this is why there has not been so many blogs in July), I am working on a secret project on the side that I do not want to talk about yet but will at some point.

Alright enough stuff about my life lets go and check how much my portfolio dropped or increased.

Image result for I am not a financial advisor

My Portfolio

My Portfolio has risen slightly to 65925 EUR (+1427) mainly because of additional investments and a small rise in the market. This is now the third month in a row that my investments are going up again. Slowly but certain a recovery is on its way.

On the bellow graphic there is three movements that are very clear this month:

  • About 1200 EUR transfered from my peer to peer investments to ETFs
  • Invested about 1000 EUR extra in ETFs on top of that
  • The stock market is rising very slowly

Lets look into more detail for each of these investment types shall we.

ETFs

It seems the stock market is rising slowly but steadily and gave me a nice profit of 929 EUR this month lowering my loss on my ETFs from -3369 last month to -2440 EUR this month. Keep it up!

Inception DateTotal PortfolioMonthly P&LTotal P&L
SPDR MSCI World UCITS ETF (SWRD)31/01/202033825816-2310
IShares Core MSCI EM IMI UCITS ETF (CEMU)28/02/20202318113-130
Total ETF Portfolio30/09/201936143929-2440

At this point I am really happy I limited my portfolio to just two ETFs, it makes it so much easier to track! And I keep finding it very easy to invest with DEGIRO, I am really happy I chose DEGIRO as broker!

SPDR MSCI World UCITS ETF (SWRD)

My World ETF has made the biggest profit this month, lets hope they can keep it up for another 2-3 months so I break even!

SPDR MSCI WORLD UCITSTotal PortfolioMonthly P&LTotal P&L% gain this month
31/01/202025160.4100
28/02/202023674-3852-3852
03/31/202022851-3362-7214
30/04/2020290343627-3587
31/05/202029590556-3031
30/06/202031411-95-3126
31/07/202033825816-2310

ISHARES CORE MSCI Emerging Markets IMI UCITS ETF

With a 113 EUR profit it was a pretty good month for this ETF

ISHARES CORE MSCI Emerging Markets IMI UCITS ETFTotal PortfolioMonthly ProfitTotal P&L% gain this month%gain yearly
31/01/2020244800
29/02/20202249-205-205
31/03/20201918.38-331-536
31/04/20202099182-354
31/05/20202064-36-390
30/06/20202211147-243
31/07/20202318113-130

Peer to Peer

PortfolioStartTotal at 29/02/2019Left inpeer to peerExpected end date
Crowdestor30/09/20192974297907/02/2022
Grupeer30/09/201989908990Defaulted. In Legal procedure
Kuetzal30/09/201910051005Defaulted. In Legal procedure
Mintos30/09/2019998286501/06/2021
PeerBerry30/09/20192548005/09/2022
TFGCrowd30/09/2019143421017/09/2020
Total30/09/2019269331404905/09/2022

I will no longer keep track of the income I am getting into peer to peer. Instead I am showing the withdrawals here. I sold on the secondary market where possible, but without giving huge discounts. In total I managed to withdraw an additional 2% this month, putting me on 49% withdrawn up to date, which is not bad considering these are long term investments, however when I look at what is left, most will be stuck in Legal battles..

CrowdEstor

  • I withdrew 100 EUR from Crowdestor this month, but this was only interest. For principal I will need to wait until October. Im not really worried that this will go ok, so far payments have restarted normally.

Grupeer

Grupeer has officially defaulted with more then 60 days of delay on my withdrawals. I wrote off Grupeer but there is two points of light at the end of the tunnel that give me hope of recovering some part of my investment.

Legal action

I have grouped together with other investors to prepare a law suit for Grupeer. The main goal of the legal action will still be to ask Grupeer to repay the investments as planned and not to resort to bankrupting Grupeer.

Unfortunately everything is confidential, so I am not at liberty to discuss anything not public here. All I can say its being prepared right now, and it feels good to have legal representation.

Plan from Grupeer

Unfortunately the plan from Grupeer to start paying back the investments is currently more looking like a carrot they are holding in front of us. Any real money has not come out way, even though 75% would be in a recoverable state based on the bellow analysis.

 [visualizer id=”3020″] 

That means that 75% is hopefully in a recoverable state. 3% is probably lost and 22% is unclear but at high risk.

As long as Grupeers bank accounts remain frozen its only virtual money.

Kuetzal

I am in a legal procedure with Kuetzal and cannot comment on any non-public information, I wanted to share more this month but I still can’t. Perhaps in setpember.

Mintos

The last amount in Mintos is fully stuck in pending payments. Right now there is not much I can do to speed up the process except wait for these payments to get paid.

PeerBerry

Rita from Peerberry has offered to rebuy my loans as the Loan Originators have no problems right now, and I have happily accepted. That means I can close my investments in Peerberry and will no longer mention them.

TFGCrowd

Right now I am waiting for the last 200 EUR of principal to be finished in TFGCrowd. After that I will be fully out of this investment. This will happen in September.

Startups

I still have 3500 EUR in startups, but there is some news, one of my startups (WeGroup) made an offer to buy back the shares with quite a bit of interest. The counsel has come together (online) and voted to accept the offer. I had 300 EUR of principal invested there and it will be bought out at 164% the value I bought it for, so I expect a nice buy back soon. Once this has been completed I will re-invest this money into ETFs or a new startup.

Retirement funds

I decided not to update my retirement funds all the time since for most of the funds I get an update just once a year, so I will update it also just once a year. This is from end of 2019. I will update it again in December 2020.

November 2019Current Value
KBC Pension funds7999
First job Pension plan1467
Second job Pension plan592
Third job Pension plan12084

Wins / losses this month

  • My ETF Portfolio made 900 EUR profit
  • Slowly but certainly I am moving out of peer to peer

What is next?

  • I will be doing a 1/8 Triathlon in two weeks so right now Im training a lot to make that!
  • If things go well I plan to do another Triathlon in September (at least if they are not canceled because of Corona).
  • I am working on a secret project that I cannot give any info about right now, however I hope I can soon!

I will also post a savings rate update soon! Subscribe and make sure you don’t miss any of my monthly portfolio updates!

Peertopeer

Eight reasons why I moved out of peer to peer investments

I realized I never actually went deeper into my reasons for fully leaving peer to peer. So here are my reasons why I decided to cease investing in peer to peer and only invest in real estate and the stock market.

#1 Its not actually passive

What I realized that with some sites you need to keep a constant eye out for negative news messages about the LO’s you invested in. Sometimes you can read in the news a Loan Originator is going bankrupt, and a few days later it gets suspended from the secondary market. You will want to sell your loans off from that originator before this happens.

#2 It’s hard to distinguish between scams and honest sites

While I do feel some peer to peer sites are easier to spot as scams some are much harder. Sites where the projects don’t match up, or where Loan Originators are kept a secret. I was invested in Kuetzal, Envestio and Monethera. While I got out in time out of Monethera and Envestio I was not able to get out of Kuetzal in time. Looking at it back now of course I should have spotted Kuetzal as a scam.

But other sites were much harder to decide on if they are scams or not. Take Grupeer who went into default for me for example. Are they a scam? Even up to this day after not paying for 90 days they keep up appearances. In any case they were listed on explorep2p which usually only listed credible peer to peer sites.

#3 There is a high liquidity risk on most p2p and p2b sites

Some of these sites have a secondary market but that does not necessarily means it functions correctly. When shit hits the fan and everyone wants to get out, even a secondary market will not help. Some sites don’t have this at all, and they offer investments for 24 months. That’s a very long time to wait when things go wrong.

#4 Investors money might not be separated from the company’s money

When I asked to wire the money on my virtual Grupeer account in March, Grupeer answered me that due to delays in transfers from the Loan Originators they could not transfer it. BUT it was already on my account. That means that the company money and investors money was all together in one big pool. And I am sure that Grupeer was not the only p2p site doing this. It’s not regulated, so they are not required to do it. We need to trust in the goodwill of the p2p site.

The mail I got from Grupeer that made me suspect that investors and company money were not separated

#5 You are also investing in Startups

Most p2p and p2b sites around are actually small companies. So in a way you invest in Startups. Statistically you should know that a startup in the Finance industry has a 42% chance to fail, so this is already a huge risk you are taking just by wiring money. In theory you still have a claim on the loan you invested in directly with the business or loan originator. In practice its quite hard to recover that stake as you have no collateral.

So forget about all these blogs that say you need to diversify! You really shouldn’t, you should be investing in the biggest p2p sites only and stay away of the smaller sites run by a handful of people.

#6 They don’t need to start off as a scam to become one

I’m sure a few of the p2p sites are starting off with the idea that they would set up an honest system. However when the company gets in trouble its quite tempting to start using investors money as your own, or create fake loans or loan originators to get extra funding for your site. Of course that’s not legal, but the temptation is there and there is no regulation to check if they are behaving as they should.

#7 I lose to much sleep over it

When the stock market crashed 30% in February / March 2020 because of Corona I never lost one night of sleep over it. While when Kuetzal stopped functioning, I remember in December 2019 I was awake all night. Even though I had 20 times more in the stock market. The idea that I fell for a scam was just extremely painful.

#8 It feels that even peer to peer loans are P2B loans

On some platforms where you can invest in many different loans, my original thought was that if the LO ever stopped paying I would still have a claim to the loan. After a few Loan Originators got into troubles because of Covid, its very clear that my claim is not on the person that I actually took the loan from but on the Loan Originator itself. So instead of investing in 1000’s of loans I was actually just investing in 30-40 businesses.

Conclussion

In conclusion I no longer feel comfortable to put my money into peer to peer. For me the high risk / high reward has mostly turned out to be high risk. Normally next year there would come some European regulation. This could actually be good for the sector in the long run, but mostly for the investors who will feel more confident simple rules (like keeping investors money seperate), are being followed.

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