September 2019 portfolio returns.
So this month was particularly exciting for me as during August I made my largest one-month investment so far, thus I was expecting a big bump in my returns. Also, I got the chance to evaluate two new re-designs of platforms and changes that re-designs brought.
This platform review is especially useful to Finbee investors as there was some drama that could have been missed by non-Lithuanian investors as it revolved in Lithuanian p2p investing facebook groups.
|Platform||Size at the begging of the month||Monthly change||Monthly gains||Average interest rate||Funds added during this month|
|Total at the end of the month***||4661.17€||42.25€||0.98%||–||200€|
*Please check what I wrote by Finbee results section, this number is technically not correct.
**Nordstreet platform does not hold my deposits directly, but uses Paysera platform as a money holder and directly moves money trough that accounts when I invest or gain interests. When calculating monthly change I will give monthly gains percentage rather than whole portfolio size change.
***This is the total amount invested after this month with interest gained and deposits accounted in.
Finbee results and drama:
So there is a lot to talk about Finbee during this month. First of all, let’s start with my results. Due to the new redesign of the platform, Finbee decided to make a few changed with how they show information. Some data that they used to show is temporarily gone, but they promised to bring back all features till the end of the year. But that’s not the point. One of the things they changed permanently is how they calculate their returns.
Before, if the loan is late for more than 60 days, it was considered a defaulted loan. Now they decided that defaulted loans will count as being late for 90+ days. Their argument for this was that other platforms count like this too, so it would be easier for investors to compare platforms. Sure, that’s fine, but that also makes my returns look great this month.
If I would calculate by the old system, my returns for the month of September would be equal to -30.98€. Yes, that’s a negative growth! Of course, it just happens to be a coincidence that the platform chose to change their rules when my returns are bad. But as of right now, I chose to follow returns as they are shown on the platform because I do not want to complicate my results tracking. So this negative balance will be pushed down the road, probably until the next year.
And that might actually be good. Well, relatively good. A loss is a loss and I would rather only have income, but in my income statement, this loss would not mean anything. But next year I expect my p2p portfolio income to be above the tax-free interest size of 500€. So this loss could mean I would have to pay a bit less in taxes for year 2020. Sure, I would still rather have income and pay taxes for it, than take a loss. But a win is a win and I will take any victory I can.
Interested in Finbee? I did a review a few months ago. Click here to read it.
If you would like to register to Finbee, I would ask you to use my affiliate link. This helps to support this blog.
Now for the drama part:
I might try to write a longer and a bit more in-depth explanation of what has happened, but now I will try to keep it short. During September, some members of a Facebook group called P2P Lietuva noticed that for some reason, new loans pay less than they used too with the same interest rate. This of course raised some questions to everyone because nothing was communicated about this issue from Finbee team beforehand. Now the great thing about this Facebook group is that all Lithuanian p2p platforms CEO’s are also in it so it’s possible to ask them questions directly.
Turns out, Finbee decided to calculate borrowers fees to the platform with interest rates. So if loan offers says 10% interest rate, the investor would actually get less than that. Of course, a lot of users did not like that and a lot of arguing with Finbee CEO has happened with a lot of investors questioning the legality of this move. I can’t say if it was legal or no, just that questions were raised, the final decision over this matter should come from Lietuvos Bankas that oversees all financial institutions in Lithuania. To stop this conflict Finbee decided to go back to the old system and every loan that was funded with the new system should be tracked the same way as before.
I would like to stay away from pushing my own opinion over this matter, but a lot of foreign investors in Finbee platform would probably miss this whole issue. This is why I find it important to at least mention what has happened.
Although Mintos overall results are good and almost reach my desired 1% monthly growth, I think that for the foreseeable future, most investors on Mintos won’t be able to reach such growth. And I would blame their Invest & Access tool for that.
If any better loans come up, they would instantly get funded by Invest & Access tool. But because it does not choose loans according to investors criteria, it allows loan originators to offer smaller interest rates and they can be sure that the system will fund those loans. If my theory is correct, then a lot of investors will be disappointed in the upcoming few months when they notice their income dropping. And worst of all, I highly doubt investors risk decreased, only their returns.
Of course, the situation is not that terrible, as of right now, there are still loans that reach 10-11%, all with buyback guarantee. I believe most investors would still love even the 7-9% average returns.
If you would like to join Mintos you can do this by using this link.
Still having doubts about Mintos? Check my review!
Sadly Robocash did not manage to reach 1% mark but was really close to it. As of right now, I am satisfied with my portfolio size in this platform so I will keep it as is right now. I noticed a bit of a cash drag for small periods, but nothing too bad. I also wrote a review of this platform during September, so if anyone is considering investing in Robocash, I highly recommend reading my review first.
After looking around for a bit I choose Grupper as my next platform to invest. Other bloggers reported great results and were overall happy with it.
There is still a lot I would like to check about this platform before investing any larger chunk of money in it. But as of right now, I chose to invest in it to better diversify my portfolio between platforms. I might increase its size by a bit, but I think I will keep it on the smaller end of my portfolio.
As always, Nordstreet is performing as expected. Although I don’t have much to say about this platform this month, I would like to take a moment and appreciate again their new design. For a while, I thought I would leave this platform as there were quite a lot of visual bugs. And of course, that did not speak well about the platform. But now, the platform is updated, and there are new loan offers coming in regularly. Good job Nordstreet team!
It took August and half of September to fully fund a loan that I was trying to invest in, so my results are lower than it could have been. Hopefully, next month will be better. As of right now, I am not planning to increase my position on this platform. But I am not planning to reduce it either. It would be nice to increase it to the amount that would allow my returns to compound every few months that would allow me to invest in new loans.
As of right now the only reinvesting I can do is waiting till the loan is paid out fully and investing in a new one a bit more. The same issue does exist on Nordstreet platform too, but Nordstreet uses Paysera e-wallet to hold investors cash. This allows me to fully use my gained interest, just like any other bank account. Meanwhile, Estateguru just holds my cash not generating anything from it.
Join Estateguru by clicking here!
As for next month…
Given that I write this few days in October already, I am still not sure what to do during October. My plan to save up at least 3000 € till the end of the year is still going according to plan. That amount is needed just as an entry point to the stock market, or any other larger investment as I don’t want to invest only in peer to peer. I do like diversification after all.
But at the same time, I still want to invest something every month. I will probably deposit some money into my Paysera account to be able to fund another loan on Nordstreet, and might slightly increase Grupeer’s size.
Anyways, that’s the end of September and the end of warm weather. Have a good month everyone!