When I started with my Crowdlending Portfolio I told several friends and colleagues about the revolution that involved being able to enter a market until now only available to large capitals or banks, many of them gave me the typical excuses that “that is very complicated for me “,” I do not understand investments “,” that does not give me confidence “, etc … and after explaining to them again and again that it was and how it worked, I only got one to pay attention to me, only one gentleman , it is really so difficult to understand how a loan works, we are supposed to be talking about people with higher education and careers, where sometimes in their work you have to reach quite complicated levels of abstraction and tell me that a Loans is something complicated to understand, at least it makes me strange.
The next problem I encountered was that they never had money to invest, either for one situation or another they never found the opportunity to transfer to the crowdlending platform or with the money they had left at the end of Month was never enough and they left for the next month, with what they spent and never found the time to start.
To list another problem of the many that raised me is that for the benefit that could be obtained the risk was high, that for that better to gamble on other types of investments that could produce greater benefits with higher risk, equity, we go to problems and more problems to open an account and start investing, so in the end they never invested either in crowdlending or in any other thing of course.
The truth is that in the end I even get to ask myself if it really was me who was wrong in my approach and then I remembered this video about keys to make the savings of Jaume Puig profitable:
Where at the 30th minute more or less comments what is happening in our society now and what is going to happen to us, I explain it briefly:
The patrimonies of the families are separating, since each time the rich part is richer because it invests in assets that are more profitable while the other part is less when investing in assets that are less profitable and even deficit due to inflation , such as the money market (bank deposits) or fixed income (long-term loss of value).
Here below you have a graph:
Historically, savers have invested in those products with less risk offered by the market to try to conserve their savings but what this really causes is that they are now investing in products with higher risk than usual, while “investors” are relaying their Saving the left side to the right to get positive returns with a lower risk than usual.
This for the small saver is unthinkable because of the ignorance of the market and in any case as much, it ends with an investment fund placed by the bank itself. The problem is that whoever does not make this move to direct savings to a greater or lesser degree of risk depending on the time horizon will be placed every time in the least favored part.
That is why this is where I reaffirm myself, because with Crowdlending this type of separation of family assets can be corrected by being a product of investment de-corrected from the market and with a spectacular profitability / risk. As long as the Crowdlending platforms do the risk assessment well, lately I’m having some unpleasant surprises with Funding Circle, so I advise you NOT to invest with them. Your risk assessments at the moment for me are not having the level or much less than that of other platforms and also, a lot of delays in payments without giving explanations, delinquency in loans that are supposed to be of high quality such as type A, etc … Here I leave part of my account so that you draw your own conclusions:
As I said this last is what I really think is more complicated and where I think the question kit really is, for me it is not a problem to lose money, I assume that, I just have to earn more than I lose to that the equation is profitable .
But since this was about how to start investing in crowdlending, I’m going to tell you my specific case.
I do not know if it is because I consider myself a sober or austere person and because for me only the principles are long-lasting, but I have internalized certain aspects in my daily life that I can not afford to take on every day, week, month, year, triennium or decade.
1 The main one is pay yourself first , it is necessary and fundamental nothing else pay your salary to set aside a certain amount of money either to another account or to a crowdlending account, this is what I do every month, nothing else arrives my payroll I invest that capital in any of the crowdlending platforms where I have an account and I do not touch it unless it is strictly necessary, although for those cases I usually have an emergency or unforeseen account as you want to call it (I usually call it my financial cushion) since it gives me more mental security) with what that money that I put to work hard for me does not do anything else but to grow and grow.
If you can only pay € 100 the first month do it, then every time you see that it is easier, because once you have your financial cushion you will see that your fear of investing in crowdlending will disappear, because it is a capital that you do not need to live and that apart from Having your financial mattress already created in case of any major unforeseen event in your life you are also covered.
I get to pay 50% of my payroll at this time without much trouble, I have a financial cushion of € 12,000 for any unforeseen and half of my salary gives me plenty to live soberly.
2º The second advice I can give you is to analyze the big expenses you have in the year and reduce them, normally the payment of those large expenses occur only once a year as life, home, car, mortgage, rent, etc … with what for very little effort, call your insurer, go to the bank to negotiate, talk with your landlord, find another service provider, etc … the savings of all of them can be maximum.
To give you a real example, I went to renegotiate with my bank the life insurance that covers my mortgage making it decrease, that means that it only covers me for the total that remains until paying the mortgage and not for a fixed amount as they usually do. Insurance normally, with which I saved almost half of it and only cost me 1 hour of my time and I saved half the price of my insurance.
3º The next step is to reduce the small expenses and modify them, this I think is the most complicated and to get to this point I think you must go through others much earlier, but good for that reason I will not explain it since it is a hole the one that usually escapes quite a lot of money. The idea to control this is to assign you a weekly budget in cash, that is in hard cash (no cards) for what are called ant expenses, coffee, lunch, meals, whimsy go. If you assign, for example, a budget of € 20 / week, do not leave it and see during the week how that cash is decreasing in your portfolio, so you are controlling what is left for you, if on Monday and Tuesday you you spend spending you know that the rest of the week you have to spend with € 10 for example for coffee, lunch or snack.
I already say that this last is the most complicated and that is where most people usually start, which for me is a big mistake, because your feeling of loss is much greater than for example paying yourself first.
4th Another of the tips I wanted to tell you is that you use some digital tools that can help you improve your personal finances such as Fintonic , Saving or Mooverang , you do not need to go into the rag with them to categorize all your expenses, just for the moment with you which are the expenses or direct debits that come to your accounts is a good start to start worrying about your own finances, not like me that I enter every day to see the movements of my bank accounts with the mobile application of my bank.
5th Finally, some teaching material that can help you if you really want to change your financial situation, first understand that you have to put your brain to work and leave your comfort zone in terms of financial material if you want it to change and then I advise you to start with the free didactic guide of your decisions will be your story and if you want to buy the book , it is clear that I do not take any commission but it seems really good.