bitconneeeeeeeeeeect
2 Likes
Hey, a new Mustachian here, please be kind 
Thanks to corona, Iâve been starting to educating myself about financial literacy and various investing options (a total novice with all that) and even though stocks and crypto seem to be all the hype now, I think Iâm more interested in a more passive investing approach. I found out about investing in loans, how that is starting to become a new alternative asset class (?) and Iâm thinking it could be interesting to see how/if it works IRL.
I had imagined an ideal scenario to create a portfolio at preferably one, maybe two leading p2p platforms, set up my preferences, and let them do their magic. But after comments here it looks I might have the wrong idea how safe loans are - thought that to be more on the safe side with the borrowersâ collateral, buyback guarantee etc. But now that does not seem to be such a laissez faire option and all the scam platformsâŠ
Seems like some of you are well experienced with at least some of the leading p2p platforms. Whatâs the situation there now? Are you considering returning to them, if so, which ones you see as safest?
I think I red somewhere that Mintos had a super successful crowdfunding round with some record breaking amount. Could that be a signal that things are getting better again - safer again to invest there?
If you see something suggesting a guaranteed rate well above the risk free rate (-0.7%), first ask yourself how that is possible. Most of the time this is because the risk is much higher. (Or itâs a ponzi scheme)
So personally wonât touch it, if itâs too good to be true itâs probably not working or itâs gambling (which can work, some people are lucky, itâs just not a good plan).
Iâve always found P2P lending to be a pretty bad investment. IMHO, the risk/reward ratio just sucks.
If youâre totally new to investing and are looking for a âlaissez faireâ approach with a long time horizon, I would advise to first start building up asap a simple 1 fund All-World ETF portfofolio with low TER (like VWRL). You could still optimise it if you feel the need during your investing journey.
Only then I would consider using my spare cash for others alternative investments.
There is nothing interesting to learn on this area.
The best way to make money with P2P itâs with affiliate!
Even Mintos does not fullfill audit on loan originator.
There were a lot of scam (Envestio, Grupeer, FastInvest, Agrikaab⊠) and there is certainly more âŠ
You have to use EUR. You will be taxed. Buyback is not a real warranty. If you add on top of this that not all loan will be 100% repaid. You will probably loose money and time.
And from a moral point of view, you give the opportunity to people who should not be able to get a loan, a loan with >10% interest. They will be more and more in debt âŠ
Iâve was naĂŻve a few years ago, lost money, didnât understand the bad effect on people.
All wolrd ETF outperform by far my p2p experience âŠ
As other guys pointed out above - their âmagicâ is usually running a ponzi schemeâŠ
I once thought like @JulienK but after 9 months I concluded itâs all scam: https://fondue.blog/pulling-out-of-p2p-investing-after-9-months/
1 Like
Same here, pulling all my money out since months and it will take another half a year until I get all my money back and can close the account⊠really annoying.
2 Likes
Yeah, makes sense that high return % come with higher risk. Not sure why I did not think of that 
Come to think of it, if I would do a proper research in the beginning and handpick the loan originating companies + diversification across countries or loan types I should be able to minimize the possible losses, no?
Havenât thought about the moral point of view of investing in loans. If someone takes a loan for buying a new car or a house would that really be taking an advantage of the burrower? If they are taking a loan for such not first necessity needs they probably can afford to pay it. Probably a different story for the short term/personal loans.
From what I have read about p2p, sounds like it should be a long term game where one would put some part of portfolio that would not be needed anytime soon and Iâm ok with that.
@Cursino thanks for the suggestion! Are there perhaps more suggestions for passive investments?
@mabi would you mind sharing how large your portfolio was and what was your strategy? Maybe there is something to learn from your experience. Have you used any other p2p platforms?
Frankly, I really donât see myself doing all that just yetâŠ
By the way, this is the article I saw about the crowdfunding: https://www.finyear.com/Mintos-Wraps-Crowdfunding-Campaign-with-Largest-Amount-Ever-Raised-in-Continental-Europe_a43258.html
If they were backed by 7000 investors putting in 7,2m EUR, I think that shows a lot of trust in it. What are your thoughts about that?
Even Mintos had unreliable LOs and I still have some 2.5k EUR locked into some of them. Trust me just got with a simple VT ETF strategy and you will be much happier over the long run.
Maybe have a look at lendora.ch if you really want to put a toe in the P2P lending game with a bit less risk.
I have not tested their platform (I have NO affiliation and I have never invested in p2p lending) and you probably wonât find the highest returns in comparison to Mintos but at least they are a swiss company (could be more convenient legalwise if things go totally south) and I know one of the founder from my student years; very serious and honest guy.
But still, for me, what you would get (minus fees) for what you would risk is not worth it. And in case of a total default, you might end up on your own dealing with the legal stuff.
What people donât realize is how illiquid these markets are. Getting out takes months if not years, even when you are ready to take a cut.
I think there is no point even mentioning my strategy in details I just wanted to invest 300 EUR every quarter and forget about it (my portfolio is small as you can guess around 1.6k EUR). If I remember correctly I chose only the âsafestâ class A companies issuing loans with repayment within 6-12m. Their web interface is ok but I get very annoyed by the fact that in order to get an account statement I need to write their support an e-mail and canât generate it myself. Last month I had to write them twice and it took 2 weeks for a simple PDF file. I wonder why they donât make that process automatic⊠makes me think again something is fishy. Anyway, no, I did not try another platforms and I will never try another platform. This business is simply not for me. I started FIRE beginning this year and at that time it looks like everybody was trying it out or speaking about it and I thought why not try it out too with my fun money. In retrospect now I am 100% sure I do not want to go down that pathâŠ
Well, my cantonal bank offers 0.00 to 0.03%.
Well above the risk free rat of -0.7%.
Are you saying itâs a ponzi scheme?
Do you pay any monthly fees?
Up to how much 
and is it liquid? (But yes itâs a great deal Iâm making use of, but part of it is explained through banking fees and also the BNS has a special rate for retail bank capital requirements deposits which is better than -0.7%).
OK, I just looked it up: 10â000 CHF a month.
2% penalty for amounts above that âas required by lawâ:
âdie gesetzlich vorgeschriebene 2 % GebĂŒhr fĂŒr den vorzeitigen Bezug (NKK)â
Savings accounts would be free.
But back to P2P lendingâŠ:
Thatâs an average of about 1000⏠per investor.
Unsurprisingly, they raised the amount on ⊠you guessed it, a crowdfunding platform.
Well, if trust can be measured monetarily:
Investors have been known to show more trust in other companies for lesser reasons, havenât they?
Thank you for your input and suggestions everyone!
I have done some more reading about Mintos and other platforms, and my conclusion leans towards giving Mintos a try (out of all European p2p platforms).
How so?
- They donât have any brokerage / commission fees (only currency conversion and secondary market sales fee)
- They are the largest platform in Europe, which wins out local market offers - I donât think you become the largest by being a scam or by providing a poor service or bad product.
- Their statistics page shows that over 360 000 investors have collectively earned well over âŹ5 billion in interest. If that indeed is correct, that sounds like a decent return in 5 years of Mintos existence.
- Their website is very informative and together with mobile app appear to get constant updates and improvements (can read about that on their up to date blog) making it easy to track progress and just is easy to use.
- The same statistics page now shows 13% average interest rate - thatâs rather high that probably comes with high risk as well. Besides, even lower interest rate percentages are better that just letting money loose value in a savings account.
- Last year with the beginning of pandemic it appears there have been several lending companies that defaulted making a good chunk of investors unhappy. I would like to believe that Mintos has learned from that experience, the bad apples have been picked out and the due diligence on their side has seen some improvements. I saw they have launched a new risk score system that is much more indepth and provides more transparency in each investment option.
- @San-Francisco - it sounds you are implying that crowdfunding is a bad sign? Could you elaborate more on that? I saw somewhere people discussing that Mintos had said this is just a first step of their funding round - they will be going to VCâs as well and this strong record breaking crowdfunding would help them to negotiate better terms.
- They are working on licensing, that would make it safer and more trustworthy. No idea when this should be done, but crowdfunding campaign made it sound like this is the top priority.
- I can set up my own auto-invest strategy with all desired filters and have it do itâs job without my involvement.
- I am too lazy to follow developments of stocks and crypto (thatâs also technically complicated) and do daytrading. Thatâs too much effort and too much FOMO.
Besides, the current heights of crypto and stocks make me wonder how ââsafeââ are the more traditional asset class investments in the first place. If there would be a sudden loss due to the bubble bursting, it would also be a long term game to regain the invested principal and somehow the risk there seems bigger to me than loans with collateral. Alternative would be to become very active and follow the developments constantly and try to time the market which again for a new investor as myself does not sound appealing, just stressful.
Please, do let me know if you see any major flaws in my logic here.
I will give this a try and add each month some little fun-money to invest via my auto-invest strategy and reinvest the profits. Will see how it goes!
Maybe explain to yourself what the risk adjusted returns is, and compare it to e.g. regular leveraged bonds. How do you make sure that the risk youâre taking is fairly rewarded (and considering the returns, are you ok with the expected risk/volatility).
I also thought that Mintos as the biggest player would be the best performer⊠my 2.1k CHF stuck in recoveries disagree.
If I still had to recommend platforms with the least issues I would go for:
- Swaper (my whole portfolio liquidated with 500 CHF in profits)
- IuvoGroup (1.3k CHF remaining in one defaulted LO)
- PeerBerry (1.7k CHF remaining but second best platform when it comes to liquidation)
But really, just donât and buy VT or ARKK instead.