I love this blog and the forum, especially the recent discussions on the Covid thread. However, I saw a recent post on P2P by the blog owner and I feel a slight disappointment with the direction this blog is going. I understand the need to make some money to support the blog but P2P is risky and seems to be only attractive for bloggers that make significant amounts of money through the affiliate links (and not through their investments). I think it is irresponsible to advertise P2P platforms with the recent scams. Especially now there are many (uninformed people) that read the blog and may follow advise blindly. There is even a P2P blog that had to close because of threats ( https://www.financiallyindependentmom.com)
I wanted to know if there are others that share my opinion, or whether I’m complaining for nothing…
To be honest - I had exactly the same feeling. I get that money needs to be earned … but advertising p2p loans that have caused issues to numerous people on the forum (myself included) just ahead of a recession? I wouldn’t be able to do with a quiet conscience.
I do not invest in P2P and would not recommend it.
Now the blog is first about FIRE. P2p is for sure one way to reach FIRE faster…or slower if shit happens.
I do not think p2p is a good instrument to get a better diversified portfolio, as in crisis mode stocks will go south and p2p souther (my opinion without back check).
So in my opinion the owner of the blog has to inform about 1) its motivation in p2p (higher expected return, monetizing the blog, fun in discovering smth new etc) 2) the risks 3) ethical side (p2p in general, affiliated links)…which he does pretty well as far as i remember.
Bogleheads strategy is boooooring, so you need other stuff to keep a blog active. @MrRIP and @_MP have a different approach/ style.
The blog is basic. The forum is the best part.
To be clear:
Noone is going to reach FIRE bc he uses Zak instead of ubs. Most articles on this blog are published to make money. Now i think it is great to search for the best offer and to criticize the one having horrible fees…it really feels good in ch.
Imo the only way to reach fire:
earn more: get educated, negotiate for a higher salary
save where it really makes a difference
So you do not need zak & cumulus card for that. A good broker is what you need.
For me frugality is more an (absolutely valid) ethical / psycholigical point of view and way to live.
Thanks for tagging me @djbabasil as I don’t follow the entire forum (tried when launched it but then impossible after a few days — else I’d have had to drop my job ).
Let’s try to answer/follow up on all points:
Question from my side: is it only this latest blogpost about P2P which makes you feel this? Or other things? (I’m actually gonna talk about monetization in my very next blogpost, which is why your opinion interests me particularly).
Any investment is risky, and P2P are clearly on the top side, but I thought I clearly stated it by explaining it would never get bigger than 5% of my own portfolio.
What would you expect more from the blog (as it seems you like+follow it, thanks for that btw) to get a better feeling? (I’m asking this really open-mindedly, not arrogantly)
Not agreeing on this one, because I know why I ended up posting this, but to me P2P (when used rationally and carefully) is as much brining yield for me than anyone else. I got several readers asking me about my experiment going on (as I wrote about it in my NW reports), and wishing to have something in FR or DE as they were not comfortable enough with English, which led to the step-by-step article.
You also wrote “ethics” into the title and here I won’t detail more my current point of view than on the blog, moreover because this is very personal to anybody (i.e. based on your own values).
Question to you @IdleThought:
1/ Would you have felt the same would I have published this one year ago? (because it’s been long that I wanted to try out this trending P2P topic, but didn’t have time so far)
2/ Related to 1, to me “ahead of a recession” is market timing and I don’t take that into account in my strategy. Else I would’ve stopped to invest back in 2017 because THE crisis was gonna happen.
Thanks for your reply @djbabasil.
I was starting to doubt about what I did put in my blogpost before reading this.
Anyway just to summarize so anyone reaching this thread can be informed:
1/ P2P motivation: higher expected return, because I need to if I wanna keep my 40yo goal reachable. As with why I went into real estate, I wanted to try P2P to see if it fits my portfolio. At the moment still in the trial phase, I recommend it only up to 5% of your portfolio.
1.1/ Discovering something new/being “active”: very small part of why I do it, but indeed Bogleheads strategy is booooring as hell and I like to try new things. Check value investing but, I do so only because of higher expected returns. Maybe I’ll be wrong, but at least I get skin in the game and don’t write shitty blogposts with dozens of link to P2P platforms I never checked or don’t trust more than putting 10CHF in them.
1.2/ Do I like the idea of getting another source of passive income outside of my job and investments via this blog: hell yeah! That’s a dream slowly becoming true. But I know how dangerous this greedy mind can be, which is why I take time replying here to jauge if and how I can do that in the best way possible without losing all my readers. Thanks by the way to all of you who replied to this thread because you’re sort of my safeguard.
2/ The risk: I repeat it here. Any investing is risky. P2P is as well and I never claimed it was risk free or secure. Tell me if you would like more push on that (I just can’t take it myself too much when I see nowadays legal blabla everywhere “Investing is risky, be sure to check blablabala.”. But maybe I underestimate my educating role. You tell me.
3/ As for the ethical side, to repeat what I wrote in different blogpost:
a/ When you let money sleep on your bank account, banks are using it for loans and co. I prefer to have this money getting in my pocket instead of bankers’ bonuses.
b/ I hate consumption and car loans (your disgust may go on other things), which is why I said if I go deeper in P2P I will exclude them from my portfolio. At first I wanted to get my feets wet with Mintos via the simplest tool they provide.
Overall I agree with you that you won’t reach FIRE because of those tiny changes if you don’t fix the other expenses and get to investing.
Nevertheless, I still think that optimizing everywhere compound quite fast when you look at the average minimum of 100-120CHF (and way more for a lot of people) in banking and foreign exchange fees over a decade or two of ones’ life.
Gosh! I didn’t think I would write so much, hope you didn’t get bored
I will actually re-use some of my materials for my current blogpost as it will provide some context
I really like the blog and the forum, and I will continue to follow it, and I really don’t want to sound harsh. BUT, after one year with Mintos you have only invested 1000 euros. This is hardly close to 5% of your portfolio. Therefore it is clear that most returns that you will get will be coming from the affiliate links. Therefore I feel slightly disappointed.
Related to the topic of value investing, now that was an interesting topic that I would like to have known more about. However in this post you recommended subscribing to a paid platform, instead of really informing people what you invested in. Even giving a few examples of net nets would have been interesting and very informative. This is going completely off topic now, but after lurking on the forum for too much time it seemed you used the value investing club that was founded through the forum to choose your net nets stocks, and not the Belgium platform (Daubasses). Of course you don’t have to justify anything, this is just my hunch and what led me to become disappointed.
I am grateful for this blog and the forum, without it I would not have discovered the FIRE movement, and start my own path to FI 2 years ago.
Just my two cents.
Didn’t have time to write much. Enjoy your weekend!
No worries, my view of the world is: “Be harsh on the problem, not on the people.” And that’s exactly as I perceived our discussion. So no hard feelings so far
Joke aside, where did you read that I started 1y ago?
Because I must fix it, as I started only on 01.01.2020. Hence why I “only” have 1’000€ in there.
1/ I didn’t find it fair to give away net-net as that’s the value (for which they get paid) of what daubasses.com are offering.
2/ As for learning more about the topic, I often realize (too late) that people like to read the thing from me and don’t read all blogs I read… because my advice of reading daubasses.com guided visit was to avoid just repeated what they wrote so well. But I keep your point in mind!
3/ Where did you feel (forum or blog?) that I used Value Investing Club vs. Daubasses? Because it’s actually wrong too. I aimed to join at first, but it was too much to follow. Hence why I ended on following the daubasses.com for a first jump into value investing.
And don’t worry, I don’t feel like justifying but more clarifying. Because if you feel like this, other readers may too. If it was all true, I would just assume it. But I prefer to correct it and keep the community I built so far.
Happy w-e to you too! (and no stress, feel free to reply later next week, we’re not fighting here, just making the place evolve in the right direction together).
@_MP at least for me what sounds misleading when reading the post are things like “~10% expected returns”.
It’s like saying that the expected returns of a junk bonds is the coupon rate. I’d like to see at least trying to educate people more about default risk, etc. Or even explain why/how it could beat risk adjusted returns of regular lending. Maybe remove intermediaries compared to classic banking, but then given how much they spend on marketing/affiliate, I’m not even sure that’s true.
I get those high returns on paper are what attractive with p2p platforms since they sell the dream of high interest rate with no risks.
But there’s no free lunch, even the most risky assets (e.g. stock) don’t provide those returns.
Sorry, totally my bad. Somehow I perceived it as you had started in 2019. Maybe this perception was strengthened because you blogged about it in the past. I must have misread it. But then again, personally I would not recommend a platform after using it for 2 months. I look forward to the reports on the Mintos returns, and I hope your future investments with them will pay off!
About value investing, I agree you can’t disclose their work. But going this direction is different from the standard passive investing strategy (yes boring) that the blog was promoting in its earlier years. Therefore a recommendation of a paid platform after several months of use is something that I personally would not do. I probably would have given it another year.
Hi @_MP, I gave it some thought and I would like to share my opinion. By running a financial independence blog you’re akin to a financial advisor with a relatively large audience. Recommending to invest only 5% into p2p loans is a practical disclaimer, but it’s likely that people who get hooked on high returns will easily invest more than that.
I would say that p2p loans are similar to high yield bonds and I just watched an episode on them by Ben Felix. He says that he would NOT recommend high yield bonds to any of his clients and if you really want to do it, invest a small portion of your portfolio and diversify, i.e. invest in an ETF. He strongly advises against picking individual bonds.
Now, aren’t p2p loans about lending to single entities? Or are there also pools that group lenders and borrowers together? In any case, p2p lending seems to be more similar to gambling than investing.
Thanks for that too. Get to confirmed my further reading of this week-end.
I got fooled by the worst investing ennemy: my boredom with passive investing… will provide update to readers today via newsletter and later on this week on the blog.
Thanks again for the constructive exchange.
That’s a really humble reaction on your side. It almost makes me feel like I was too bashful . I mean, I see the point of wanting to explore new products and test them. But in this case I guess the bulk of your income would come from the affiliate links and not from return on loans, right? So you would not be in the same boat as your readers.
And I guess it’s good to be aware that if a platform you recommend runs into trouble, people will be very angry at you, just look at Jorgens blog where he tells people to chill out.
Well, my rational brain finally won
To give more details: I deep dived into the topic but I was too much in the P2P realm and not stepping back enough to have the full picture. This is now done.
As for the affiliate, that wasn’t my first intention but just a consequence. Although not hurting obviously.
Finally, I’m still convinced by Mintos reliability and don’t fear losing my 1k€ for now, but just not convinced as much as last week about risk+time vs. returns.
Hence the broadcast email this morning to rename it as “experiment” + 1% of portfolio for now and potentially 0% soonish.