Jørgen has posted a December update.
In a shocking (at least to me…) development, the affilate links generated 19 240 EUR of profits in December alone. This is nuts.
Why don’t I have a blog?
Also, I really can’t believe why are people investing in some of these platforms. This stinks.
I can’t really grasp what he gets the money for. He brings customers to these investing platforms through affiliation programs? How much do they pay him? 1% of new assets brought in by his readers? Then it would mean his readers invested 2 million euros in December. Feels like either these investing platforms are generous to him, or his readers are crazy about investing into some things I never heard of.
Jørgen replied to this question in the comments section:
“Affiliate links generate from 0.5% to 5% depending on the platform. Some only pay for the first deposit and some pay for all investments made over several months. I estimate that my readers have invested around 1 million EUR in December.”
I did some research on most of these platforms and here are my comments.
Bondora
Edit: The loans are all with the platform owner. Negative returns realized by Jørgen suggest there is no buyback of defaulted loans.
Crowdestate
Cracks already showing. Some projects significantly delayed, therefore promised returns will not be realized in full. At least one developer already bankrupt (see their Marketplace)
Crowdestor
Very few projects, means high exposure to individual loans. Risky.
Envestio
20%+ returns is just fishy. Most projects are “Tiers” of existing loans. This leads me to believe they are just refinancing the previous loans for as long as they can get away with it. Many previous projects were crypto mining farms based on GPUs. To anybody in the know it is clear that GPU mining is not profitable at current prices. No chance this will get repaid.
FastInvest
Only two, unspecified, loan originators. Too little transparency, too little diversification. No go.
Grupeer
As I write this, only 16 loans available with 3 originators. Too little diversification.
Mintos
230’000 available loans with 50+ originators, good transparency.
Robocash
Looks like all loans are with the platform owner (Zaymer=Robocash). No diversification.
Swaper
All loans owned by one financial entity. No diversification.
Twino
One of the oldest platforms (2009). Apparently reliable, offers buyback guarantee. I can’t find any info about loan originators or the loans available (lack of transparency).
Out of all these platforms, I only found Mintos suitable to trust with some play money. I’ve been with them for 4 months and it’s been going fine (support, withdrawals etc.), but the real return is closer to 11.5%. Here’s my referall link if anybody is interested: www.mintos.com/en/ref/L7M93R . Let’s see if I can get my 19000+ EUR in referrals!!! 
“Mintos - invest in loans”
So they are a broker between loan takers and lenders? And these loans go for 14% p.a.? Who wants a loan for 14%
Lots of people, apparently. Most of these short term (so called pay-day) loans are effectively 100 to 300%+ annualised to loan takers. I’m sure you’ll recognize some of the loan originators from Poland if you look at Mintos. All the safer styles available (Business, Mortgage, Car are actually well below 10% return).
I had a look and I only found loans at 13% for Kuki.pl, which I don’t know. But I checked them out. They are one of these companies that give out short term loans for 30 days to desperate people. I guess if you don’t pay, then some scary mobster guys come and convince you to find the money…
Let’s see what they offer:
So a 10’000 PLN loan for 30 days. Annualized interest is a cute 10%, but commission is 20%, which makes the total annualized interest 916.67%! It almost feels immoral to seek for people willing to take that deal. These people are either completely screwed and I’m pretty sure this loan won’t help them, or they can’t do the math.
Either way, there seems to me that there is a huge risk these loans won’t get paid. Then comes the penalty etc. When I see these numbers I instantly have these thriller movies about loans sharks in my head…
What are the the four numbers before each invesment platform? ( -248,48€ -2,88% 16.100€ 25.110€)
My loan portfolio in Mintos is around 200 different loans. Believe it or not, majority actually really get paid back! People are really stupid with their finances.
Loans which don’t get paid are bought back by the originator and full interest is paid (had some of those already). As of now the major risk I see is the bankrupcy of one or more loan originators, which is why I find it absolutley critical to diversify among as many originators as possible even at cost of lower returns.
That was copy/paste from Financiallfree author.
These numbers will be unattainable for anyone who jumps in as of today, although may be true for Jørgen (if he actually sees the principal paid back on all of the loans he has).
This is what I’m getting in EUR (i also have some loans in RUB, but the currency depreciation will probably eat all additional profits).
I have tested Bondora during the last two years. I have received around 10% a year. I have around 2600 different parts of loans with an average of 2 euros by loan However, I don’t think it is worth it to invest on this type of platforms:
It is true that higher risk mean higher returns, but i think index funds make more sense on the long run
I actually tried this in practice on Mintos:
I sold some loans with 0.5% discount on Secondary Market and they were gone within an hour (this loss is the “service fees” on my screenshot.
The 1 month loans which went delayed/defaulted and were paid back with “Buyback guarantee” after additional 2 months were paid with interest for the whole 3 months.
Ethics… You’re actually lending the money to businesses. For what it is, their extra liquidity may actually lead to lower fees for end clients.
This would depend on the platform. Some platforms like Bondora are personnal loan.
One platform i will test is Advanon. Does anyone have a feedback about it?
Guys is this investing in Loans really worth it? Especially for Switzerland where income from interest is taxed at your highest marginal tax rate. So even in the best case scenario of 11.56% return that will get decreased by 30%, so why risk it when you can get some structured products with similar returns if you want a fixed income. Yes, they are not great, but I would rather bet with Postfinance as a counterparty then some random desperate people.
Investing? No :-).
Especially not over long duration loans and especially not in ones which pay only interest over the term duration and repay principal on maturation (if ever…).
I treat Mintos as a place to park cash short term. I’m happy with the liquidity and for this purpose it’s fine. It can easily be set up to only invest in very short term loans so even without using the secondary market, the cash is free relatively quick.
I am happy that it works for you but to me this sounds like a ponzi scheme. The fact that they pay so much for referrals doesn’t really help to change my mind.
I suppose Jorgen is somewhere near the top of the pyramid.
I guess Jorgen will never have to worry about that. With his 2018 earning of a whopping 60k EUR in referrals, he can easily afford to see half of his investments go default and he will still maintain positive balance. The same can’t be said about most of the people who followed him though.
Some very alarming comments to be seen in his review of Fastinvest and Envestio:
Fastinvest:
https://financiallyfree.eu/fastinvest-review/#comment-962
Envestio:
https://financiallyfree.eu/envestio-review/#comment-1035
I find Jørgen’s replis equally alarming. He seems very commited not to see the risk.
That being said, Mintos only offers 0.75% refferal bonus capped to 250 EUR (as opposed to up to 5% on other platforms).
Quick math shows, that it would take 1000 people, each investing 8000 EUR (8M EUR total) to generate 60000 EUR from referrals on Mintos.
“Whose bread I eat, his song I sing.”
There is no pyramid. The structure of these referral programs is flat as a pancake, I only get paid for the people I refer directly. Referral programs are available to everyone with equal opportunities to use them. Read more on https://www.mintos.com/en/join-our-affiliate-program-and-earn-money/
Glad to see you back. Nobody is saying you created a pyramid, but the rapid growth of P2P market indeed makes it look like one.
I, personally, am a littel taken aback by your naivety of approaching the very legitimate questions asked abouy Envestio or Fastinvest. It all may play out fine. But what if it doesn’t? You are covered, you have already made more in refferals than you did or will make in these investments.
Ponzi schemes are known to work for as long as there is fresh capital inflow, this is historically proven. It’s also proven that they can go on for many years or even decades, and it’s also proven that the investors who get in early and get out early actually win large.
You can’t honestly believe that all of these P2P platforms will continue to flourish or that the ones which won’t will fold in an orderly fashion. Every market crashes once in a while. Be it bonds, stocks, commodities, housing. The difference is, this one might actually never recover after a crash.
