I posted the part one of this post last week, but what about the other non-real estate portals?
Well, there is the good, maybe no bad ones, but surely still the ugly. So let's get into it. All the numbers are from 9.02.2019 when I downloaded the info from the portals, to write this post.
Bondora is the first investing platform I ever used. I started investing there in August 2016, and by the end of that year, I had deposited 1350€.
I chose the platform mostly due to the fact that many people were speaking of it. Not in the sense that there was a lot of advertising (I guess there was on TV, but not owning one I did not see that), but mostly just because there was a lot of information available and a lot of it was also in Estonian (helps to read in your native language when just getting to know a completely new topic). So the main things I was looking back then, were real how-to-guides on how actually the investing works and as I tend to be the person who follows the rules, there were also guides on how to report the income for the income tax. Also, a friend of a friend worked there, so this seemed to give the company credibility.
As I started getting to know the investing world and realised that the loans were not paying back and the rating system seemed really strange and really bad predictor of who would actually pay back, I decided to exit the portal. So after starting in this portal (mistake number one), the second mistake I made was deciding to go for a slow exit. So I stopped investing in new loans in January 2017 and started to withdraw the money that was coming back to my account. I guess that if I had sold the loans back then I could have made a way better exit.
So, up to last summer, I just let the loans be and money trickle in, and then tried to sell most of them at first with the market price and then with bigger and bigger discounts. At the highest point I had almost 130 loans in my portfolio, and by the time I decided to sell them just 2(!) of them had had no issues and were nice and "green". I did not sell those two (one has paid me back by now, the other is still going strong). So where am I now?
I put in 1350, I have withdrawn 1155 €, so I am still missing 195€ even to get the initial deposit back. Well actually more as from the money withdrawn officially 378,89€ has been accrued interest and has been taxed at 20% so 75,78€ has been given to the state and to break even I sill need to get 270,78 out (well even more as any interest I get is taxed). Officially the Bondora account is worth 345€ by their calculations but this diminishes daily when payments are missed again and again...
Here is the view of the interest income from the last year, I hope this would be informative (scary?) for everyone.
And here is the general statistics to prove what I have said:
So let's move on to a much better portal.
I have been using Mintos since September 2016, and by the end of 2016, I had deposited to here also 1350€. But for some reason, the story is much different.
Mintos is a much different portal in the sense that it is a platform where many companies (loan originators) list their loans. There are loans offered for rather different interest, loan length, different currencies as well as either with or without buyback guarantee. It is important to note that even loans from the same originator and same interest rate are not equal as we can not predict everything but it is more than sure that loans from different loan originators differ as well. To help out the users Mintos also rates the loan originators on their portal. In general, I invest in loans in euros, which have buyback guarantee and where the originator has a rating from A+ to B. I have also read the comprehensive explorep2p post on their assessment of the loan originators and made few adjustments based on their suggestions (if you use or plan to use Mintos, it is a must read post!). I have 2 auto investments running there with the aforementioned settings, one asks for 12% interest and investment is 10€ and the second one is of 11% and 15€. So basically if the money is not going out when it comes to the sum of 15€ it should go out for sure. Because money sitting on the account does not produce anything, so I accept lower interest for the fact that the money is circulating. The only real issues I have with the portal is that sometimes even though the portal shows that there are plenty of loans matching my criteria the money is not going out (even with the lower interest). There are times when I log on and there is 50€ sitting there. Usually, it is gone the next day (and has been put into 12% loans), but it bothers me a bit.
Also, let's be honest, if the depression should hit and some originators might go under, the fact that I have buyback guarantee won't help me a bit. So I try to diversify across originators to lessen this threat.
I have few defaulted loans and some 60+ days loans and bad debt on the portal from before I used 100% buyback guarantee loans.
To this day I have deposited 2975 € and received 634,58 € in interest, I still use and recommend this portal.
Full details are shown on the account view, here:
Now we come to the 2 relatively new portals, the Grupeer and the Envestio.
I chose the platform mostly due to the fact that many people were speaking of it. Not in the sense that there was a lot of advertising (I guess there was on TV, but not owning one I did not see that), but mostly just because there was a lot of information available and a lot of it was also in Estonian (helps to read in your native language when just getting to know a completely new topic). So the main things I was looking back then, were real how-to-guides on how actually the investing works and as I tend to be the person who follows the rules, there were also guides on how to report the income for the income tax. Also, a friend of a friend worked there, so this seemed to give the company credibility.
As I started getting to know the investing world and realised that the loans were not paying back and the rating system seemed really strange and really bad predictor of who would actually pay back, I decided to exit the portal. So after starting in this portal (mistake number one), the second mistake I made was deciding to go for a slow exit. So I stopped investing in new loans in January 2017 and started to withdraw the money that was coming back to my account. I guess that if I had sold the loans back then I could have made a way better exit.
So, up to last summer, I just let the loans be and money trickle in, and then tried to sell most of them at first with the market price and then with bigger and bigger discounts. At the highest point I had almost 130 loans in my portfolio, and by the time I decided to sell them just 2(!) of them had had no issues and were nice and "green". I did not sell those two (one has paid me back by now, the other is still going strong). So where am I now?
I put in 1350, I have withdrawn 1155 €, so I am still missing 195€ even to get the initial deposit back. Well actually more as from the money withdrawn officially 378,89€ has been accrued interest and has been taxed at 20% so 75,78€ has been given to the state and to break even I sill need to get 270,78 out (well even more as any interest I get is taxed). Officially the Bondora account is worth 345€ by their calculations but this diminishes daily when payments are missed again and again...
And here is the general statistics to prove what I have said:
So let's move on to a much better portal.
I have been using Mintos since September 2016, and by the end of 2016, I had deposited to here also 1350€. But for some reason, the story is much different.
Mintos is a much different portal in the sense that it is a platform where many companies (loan originators) list their loans. There are loans offered for rather different interest, loan length, different currencies as well as either with or without buyback guarantee. It is important to note that even loans from the same originator and same interest rate are not equal as we can not predict everything but it is more than sure that loans from different loan originators differ as well. To help out the users Mintos also rates the loan originators on their portal. In general, I invest in loans in euros, which have buyback guarantee and where the originator has a rating from A+ to B. I have also read the comprehensive explorep2p post on their assessment of the loan originators and made few adjustments based on their suggestions (if you use or plan to use Mintos, it is a must read post!). I have 2 auto investments running there with the aforementioned settings, one asks for 12% interest and investment is 10€ and the second one is of 11% and 15€. So basically if the money is not going out when it comes to the sum of 15€ it should go out for sure. Because money sitting on the account does not produce anything, so I accept lower interest for the fact that the money is circulating. The only real issues I have with the portal is that sometimes even though the portal shows that there are plenty of loans matching my criteria the money is not going out (even with the lower interest). There are times when I log on and there is 50€ sitting there. Usually, it is gone the next day (and has been put into 12% loans), but it bothers me a bit.
Also, let's be honest, if the depression should hit and some originators might go under, the fact that I have buyback guarantee won't help me a bit. So I try to diversify across originators to lessen this threat.
I have few defaulted loans and some 60+ days loans and bad debt on the portal from before I used 100% buyback guarantee loans.
To this day I have deposited 2975 € and received 634,58 € in interest, I still use and recommend this portal.
Full details are shown on the account view, here:
Now we come to the 2 relatively new portals, the Grupeer and the Envestio.
On the positive note, all loans have buyback guarantee in case of borrower`s payments delay for more than 15 days. So this is enforced faster than the 60-day-rule in Mintos.
I do not use the portal that much, I have used it since April last year and I have invested just 310€. The money is nicely in circulation since the auto invest was implemented, so with my small sums no cash drag. Not planning to up my game here too much, just use it as a small part of the portfolio to get a pump up for the general portfolio interest rate :) But I will see how it works. If the interest rates drop to the Mintos level, I might exit. But at the moment, I plan to keep using it.
Envestio is an interesting platform and newest in my portfolio. I started there just last November and have deposited 500, and invested 400, you'll see why. It offers funding to companies running a business in rather different fields like timber and wood pellet industry, green energy (biomass, wind) and traditional oil energy, fruit wholesale, urban mining etc. So it can give your portfolio access to interesting different fields and allows easy diversification across fields. The interest rate has dropped in this portal, the older projects are around 21%, now it is more common to see 15-17%. I find the projects offered really interesting and plan to grow my portfolio here. The only issue is that the projects fill really fast, and there is no real regularity when to expect them. There is no auto invest and no real time to study the projects. You get an email notification and if you do not notice it, in 1-2 hours it can be already filled. So I have a hard time keeping track of this portal and if the money is not invested it will earn me nothing... But I do find it rather unique and fascinating. I have a few first loans ending at the end of February and March so I hope to have positive news from those. A small thing perhaps, but I love that it shows the list of payments you are expected to receive (just like CrowdEstate), I wish more portals had this function. It makes planning my deposits easier, as if I know a larger payment is expected I might this month deposit to other portals as I know that I have free capital to invest here and opposite if I can just expect small interest payments, I will add more money to portal get to take part in new interesting projects. I have done so in CrowdEstate for some time and I just love this functionality.
