Author Archives: MPI

How to effectively protect yourself from investment risks?

Risk/Reward

 

Every time we think about the idea of making investments, the first thing that automatically comes to mind is the notion of risks.

This way of thinking is typical for the field of investments and is much less present in our normal, everyday life.

Or not…?

How present is the concept of “risk” in our lives?

Obviously, certain risks normally exist for us no matter what we do, only we don’t think about them all the time and we don’t worry too much.

Because they are quite small, and most of the time they are even EXTREMELY small.

For example, how many times do you happen to climb the stairs and fear that you might stumble and break a leg? Or how many times do you walk down the street with fear of having a serious accident?

Probably quite rare…

And yet, such accidents happen, because we hear about them many times and we even see them on TV.

However, they are very rare (thankfully!), So it would be abnormal to live our lives in constant fear of them, always thinking about these risks and everything that could happen.

In terms of investments, however, the way of thinking is exactly the REVERSE!

Every time we are interested in a certain investment, we must analyze very carefully the situations in which things could go exactly the opposite of how we hope.

What would happen in those cases, how we would react to an adverse scenario, how much we could lose – all this must be part of our plan from the beginning.

For the simple reason that sometimes these investment risks do occur, no matter how carefully and inspiringly our initial plan was made.

Therefore, the question we need to ask ourselves is not “IF” but, rather, “WHEN” the risks associated with each investment will occur.

It is very important to find out the answer to the question “HOW MUCH” can we lose if those risks occur. Because depending on this answer we know how to plan and manage our investment correctly from the beginning.

In any investment, the main concern related to risks is that, in case they occur and we have losses, they should be as limited as possible.

Because all investors, absolutely ALL, face these investment risks and therefore sometimes incur losses.

Even the famous Warren Buffett, probably the biggest investor of all time, constantly in the top of the richest people in the world, reported a significant loss a few years ago as a result of his investment in Tesco.

What is interesting is that, although in absolute terms this loss seems huge (being several hundred million dollars), in fact it represents only about 0.2% of the net value of the company run by Buffett (Berkshire Hathaway).

In fact, over the last 50 years, Berkshire Hathaway has once lost 2%, with the rest being less than 1% of its net worth. These impressive results confirm that the winning strategy is to keep the risks to a low level, and therefore the potential losses.

How can you effectively protect yourself from risk?

Self-knowledge and study are the most important elements when it comes to investing.

If you understand how you react to risks and potential losses, it will be much easier for you to build a portfolio that fits your risk profile and helps you achieve good long-term results.

Here are 4 things you should always think about BEFORE making a certain investment, so as not to expose yourself to too much risk:

1. How much can you afford to lose?

How much money do you have available for these investments? And, most importantly, how many of them could you lose without significantly affecting your portfolio (or even your standard of living)?

In addition to answering these questions, you need to think about whether you are comfortable with the fact that you will make those amounts unavailable for a certain period of time, specific to each investment.

2. What is your time frame?

The time frame for which you intend to invest is directly related to those risks that you are willing to accept.

The longer you invest for the longer term, the more chances you have of recovering from any declines, so you could take, at least theoretically, higher risks.

On the other hand, as you get closer to your goal (eg financial independence), you need to prepare your portfolio properly so that you decrease the total level of risk you take.

3. How well do you know the investment you want to make?

The main risk of an investment is the investor himself. Or, as Warren Buffett says, “Risk exists when you don’t know what you’re doing.

So, before you embark on a particular investment, get seriously informed and try to really understand how that investment works.

What are the main risks? What might not be going well? What are the positive scenarios and what are the negative ones?

And, most importantly, what will YOU do in each of these scenarios?

Once you find the answers to these questions, it will be much easier for you to make a concrete plan, which you can implement when the situation demands it.

4. How do you deal with these risks emotionally?

Your emotional ability to cope with change, unforeseen and potentially dangerous situations is very important.

If riskier investments stress you out and affect your daily life, you should probably turn to lower risk instruments.

Even if it is said that high profits are usually brought by investments with higher risks, you should know that there are enough profitable options to invest with medium or even low risks, so that, in the long run, you do not end up ruining your life and the health.

IN CONCLUSION, you can reduce the risks of your investments by investing:

– in a diversified portfolio, with investments that you understand

– which is adapted to your risk profile

– long-term and very long-term

– investing regularly, amounts with which you are comfortable.

This way you will be able to build an investment plan to help you get good profits, in conditions of limited risks.

How to invest: 5 basic tips for beginner investors in stocks

Investments for beginners

The development of technology has increasingly paved the way for ordinary people to global financial markets. But easy access for individual investors to international markets comes with the need to be educated about them and to understand the risks they take.

1. Do your homework

Once you have decided on which platform you want to invest, you have to do your homework. Investing means more than choosing a few random shares, with the hope that everything will go well on its own. A familiar example would be that when you buy a house you do not choose one at random from advertisements, but you will go to visit it. And to determine if it has a fair price, you look at the neighborhood, the real estate market in general and then you make a decision.

Similarly, before you start investing in stocks or any other asset class, you need to research the market to understand what you are investing in. Read about each asset and invest only when you feel comfortable that you can make a well-informed decision.

Thanks to the internet, nowadays it is easy to access information about listed companies. You can see what their income and history are, you can read their news and recommendations for investors. Sector or market information or even political news is also important – for example, we can now see how airlines, even the best performing ones, are affected by Covid-19 travel restrictions or how incentive packages economically affects markets. Being up to date with things that happen in the media helps you better understand the evolutions of stocks and trends in the markets.

2. Define your financial goals

Before you invest your money, you need to have a clear idea of what you want to achieve and how you will do it. You need to understand your personal goals as an investor. Do you plan to invest in the long term (10 years for example) or in the short term? What types of investments will help you achieve your goals? What are you ready to risk?

Investors should be encouraged to define an investment strategy that suits their needs, including their risk attitude. To mitigate risk, they should diversify their portfolio, adopt a long-term attitude and invest only in financial instruments with which they are familiar and for which they understand the risks they take.

3. Invest the money you don’t need in the next five years

Risk appetite should always be linked to investment objectives. Evaluate your current financial situation to understand if you can take the risk and always invest with money you will not need in the next five years. Never invest more than you can afford to lose!
You need to have a long enough time horizon for the investments you make to avoid market fluctuations. If you have an amount at your disposal, but you know that you will need this capital in the next 12 months, then the recommendation is to invest in a less volatile asset class, such as bonds.

Over time, stock markets have provided excellent returns to long-term investors. For example, since the establishment of the S&P 500 index (stock index composed of the top 500 American companies) in 1926, it has increased by an average of 10% annually. This is a much higher return than those generated by other assets, such as government bonds. You can also start investing in shares with a relatively small amount of money using a commission-free platform, as commissions can affect your profit margins.

One of the factors that discourages people from investing online is cost. The idea is still widespread that you need a lot of money to start investing. Moreover, equity investments are often perceived as an extremely complex process, involving technical knowledge and attracting expensive commissions. This is no longer the case. A number of online investment platforms, conduct transactions with shares without commissions, as well as fractional shares – you can actually buy a part of a share, a percentage of it, expressed in dollars. This offers the opportunity to invest $ 50 in high-value stocks, such as those of Amazon (which trades at about $ 3,000 per share), Tesla (over $ 700) or Alphabet (Google) – whose shares would cost about $ 2,000 a piece.

4. Practice before you start investing

Start with small amounts of money or practice with a virtual demo account, while learning the markets and defining your strategy.
Demo accounts of several online platforms allow you to practice without risk. Every user who registers receives access to a demo account, credited with virtual money, so that they can practice their strategies, learning to work with the platform before investing with real money.

5. Diversify your portfolio

Diversification is a risk management strategy and the proverb “don’t put all your eggs in one basket” explains the concept very well. In other words, invest in different assets or market shares to limit your exposure to a certain class of assets or financial instruments.
The purpose of diversification is not to achieve very high returns, but to manage risks. Think about what it would have been like if you had invested all your savings in the shares of an airline company just before the pandemic, which made travel difficult. You don’t want to be completely dependent on the performance of a single company or a single sector, maybe even the economy of a single country or continent.

Coinbase International – Buy and sell cryptocurrency. Send money internationally for free

Coinbase International

Coinbase started in 2012 with the radical idea that anyone, anywhere, should be able to easily and securely send and receive Bitcoin. Today, they offer a trusted and easy-to-use platform for accessing the broader cryptoeconomy.

Coinbase have approximately 43 million verified users, 7,000 institutions, and 115,000 ecosystem partners in over 100 countries that easily and securely invest, spend, save, earn, and use crypto.

You can now send money to any user with a Coinbase account around the world using XRP or USDC. By using cryptocurrencies that are optimized for cross-border transmission, you can send and receive money virtually instantly by sending those cryptocurrencies and having the recipient convert them into local currency. There’s zero fee for sending to other Coinbase users and a nominal on-chain network fee for sending outside of Coinbase.

In fact, you can send any cryptocurrency supported by Coinbase to another Coinbase user or to an account outside of Coinbase. XRP and USDC may be better suited for smaller international money transfers due to their faster processing and lower transaction fees. USDC also has the added advantage of being exchangeable for one US dollar, rather than being volatile in price like other cryptocurrencies.

What you’ll need to open a Coinbase account:

– be at least 18 years old
– a government-issued photo ID (they don’t accept passport cards)
– a computer or smartphone connected to the internet
– a phone number connected to your smartphone (they will send SMS text messages)
– the latest version of your browser, or the latest Coinbase App version. If you’re using the Coinbase app, make sure your phone’s operating system is up-to-date.
Coinbase doesn’t charge a fee to create or maintain your Coinbase account.

How to send money internationally with Coinbase?

1. Sign in to your Coinbase account, or create one.
2. Confirm your recipient can convert XRP or USDC into local currency.
3. Convert your desired funds into XRP or USDC. 6
4. Access your XRP or USDC wallet and select send.
5. Enter the amount you’d like to send and the target wallet or email address.

With Coinbase you can create your cryptocurrency portfolio

Coinbase has a variety of features that make it one of the best place to start trading:

– Manage your portfolio: Buy and sell popular digital currencies, keep track of them in the one place.
– Recurring buys: Invest in cryptocurrency slowly over time by scheduling buys daily, weekly, or monthly.
– Vault protection: For added security, store your funds in a vault with time delayed withdrawals.
– Mobile apps: Stay on top of the markets with the Coinbase app for Android or iOS.

HeavyFinance crowdlending platform overview

HeavyFinance

HeavyFinance opened a completely new asset class for retail investors – loans backed by heavy machinery. This is the first crowdlending platform in the world focusing on heavy equipment as collateral to make investments more secure.

HeavyFinance was founded in 2020 by four experts in different fields such as heavy machinery, finance, marketing and project management. Two of the co-founders are serial entrepreneurs who established successful companies like Finbee, Nova rent and Litrental.

HeavyFinance is supervised by The Central Bank of Lithuania under the track of crowdfunding platform operators. The Central Bank of Lithuania is one of the leading central banks in the world taking active monitoring and regulating efforts as well as fostering innovations in the financial sector.

Investing on HeavyFinance is available to anybody over 18 years old, while the company has some geographical restriction for borrowers. HeavyFinance is focusing on issuing loans to entities based and operating in European Union with primary focus on Lithuania, Latvia, Portugal and Bulgaria.

On HeavyFinance people can start investing from 100 Eur.

Loan period usually varies from four months to three years. However, if you want to sell the part of your investment portfolio earlier, you can do it on the secondary market.

How is the risk measured?

First of all, people can choose to invest in loans depending on the risk they are willing to take. Risk levels are indicated by letters A (lower risk), B (medium risk) and C (higher risk). Consequently, while you could earn up to 14% interest rate by investing in C risk level loan, A risk level loan would bring you around 10-12% interest rate depending on the amount you’ll invest.
Talking about the risk assessment in more detail, these are the main criterias HeavyFinance looks at:
● Financial statement for past 2 years;
● Balance sheet;
● Cash flow statement;
● Reputation of business owner;
● Loan-to-value ratio;

As of today, the platform already helped people to invest more than €1M in loans backed by heavy equipment and arable land with 12,14% average return on investment. Furthermore, the platform didn’t have any defaults so far.

Don’t forget: if you register through this link  you get 2% investment bonus as long as the investment is active with HeavyFinance for a 30 day period from the investment date.

For other bonuses visit our Cash-back & Bonuses page.

 

Invest €20 and get an instant 50% return at Iban Wallet

Iban Wallet informed that a new opportunity is available at the platform to all new registered participants.

Every new investor who register through this link at Iban Wallet, use the promo code – GET10 –  and invest minimum 20 EUR, will get a 10 EUR cashback bonus on their Iban Account after the  investment deposit!

Rules

‣ Minimum deposit of €20
‣ One-time only usage
‣ The deposited amount should remain in the Iban Account for at least 30 days
‣ Available for Iban Account
‣ Available only for first deposit
‣ Applicable for accounts in EUR, USD
‣ Bonus assigned for upon investment confirmation

When is the bonus paid?

Bonus will be attributed as soon as your deposit is confirmed on your Iban account. It can be instantly for deposits made with debit/credit card, or take up to 3-business days for bank transfers.

Where should you enter this code?

Make sure to insert the code GET10 when topping up your account. When selecting the amount to deposit, you should see a field “Promo code” right below.

Campaign is valid until 31.10.2020.

For other bonuses visit our Cash-back & Bonuses page.

LendSecured real estate crowdlending platform overview

LendSecured is a real estate crowdlending platform, based in Riga, providing only real estate backed business investment opportunities.

LendSecured was founded by two entrepreneurs, who have built a successful secured lending business in Latvia, specializing in real estate backed lending to businesses. The return they have brought to stakeholders of their business was on average 10% annually. The emergence of technological solutions has inspired the founders to build an investment platform and offer the same lucrative investment opportunities for a wider public.

LendSecured platform was created in 2017, as a private tool for investors, enabling them to monitor their loan portfolios. During these years, the platform has been developing its core business (mortgage lending), gathering experience and building loan portfolios.

Since 2017 the platform was accessible exclusively for high net worth investors, but now they are opening it for the public.

The core pillar and philosophy for LendSecured is to minimize the risks. LendSecured feels responsible for their clients and believes that if investors have trusted them with their funds, then it is their duty to offer the safest possible investment opportunities. In order to minize the risks, LendSecured publish investment projects with low LTV (Loan to Value ratio). The lower the ratio, the lower the risk.

LendSecured benefits from debt collection license (Loan MGMT Ltd.). Besides that, LendSecured is the member of European Crowdfunding Network since 2020.

In order to ensure the security of the clients funds LendSecured has partnered with the prominent payment solution provider Lemonway, which is a Fintech founded in 2007 and regulated by Banque de France. Lemonway is obliged by the regulator to hold all money received on behalf of its clients on a separate account, which is held with BNP Paribas (the largest bank of France by value of assets), thus investors of LendSecured can have a peace of mind, as their funds are held safely on a segregated bank account monitored by French Central Bank. This fact totally excludes the chance of fraud, which recently has occured on other platforms in P2P sector.

Moreover, Lemonway is doing all compliance checks, KYC & AML procedures of all funds credited to LendSecured’s account. This helps LendSecured to speed up the investment process and be assured that they comply with all the latest regulations set up by the EU.

If you invest for the first time at LendSecured don’t forget that you can get  a 0.5% cashback bonus for the investment amount.

Who can invest at LendSecured?

Anyone who is above 18 years old can become a client. To register, you need to submit a copy of your passport or ID document and wait until our team completes your identification process. Once all KYC and AML procedures are done, you can invest!

Every investor must have an opened bank account in the Single Euro Payments Area (SEPA).

Investment deals on LendSecured platform

Lendsecured accepts projects with Loan-to-Value (LTV) of 50% on average, maximum reaching 70%. The lower the LTV, the smaller the risk to an investor. The LTV of 50% means that the value of a real estate is as twice as high as the loan amount. This means that in a situation, where the loan ought to be recovered from the sale of the real estate, the value of the real estate will be more than enough to cover the amount lent.

All mortgages can be monitored online on the Land Register of Republic of Latvia: www.zemesgramata.lv.

There are three repayment types that are featured on LendSecured:

  • annuity– where interest is paid monthly together with the loan principal amount spread over the life of the loan.
  • bullet repayment type, the most common type, where borrower makes interest payments monthly, but principal repayment is made in one full payment before the end of the loan maturity.
  • full bullet where there is no interest, nor principal payments during the life of the loan. The sum consisted of entire interest and principal is repaid at the end of the maturity date.

The minimum investment amount on the LendSecured platform is 50 EUR and the average loan term is 12-18 months.

 

The “secret” to reaching the first 1000, 10000 and 100000 EUR / USD

Compound-interest

Most people get stuck until they reach the first 1, followed by a few zeros of  earned /saved/invested money, and they stay in the “start” area for the rest of their lives, taking it over and over again from the beginning.

This is why most people do not become financially independent and do not truly achieve financial prosperity.

The first 1000 EUR invoiced from the new business;
The first 10,000 EUR invested on the stock exchange;
The first EUR 100,000 in the personal portfolio;
The first studio for rent;
First salary / bonus etc. of EUR 3000 (the example is relevant, even if it does not start with 1)

The effort to reach the first 1, followed by a few zeros, is enormous and many give up along the way. What they don’t know is that after you hit a 1 followed by a few zeros (2,3,4 etc.), the rest of the zeros are much easier to reach.

After 10 years of struggling to reach a portfolio of 100,000 EUR, most likely up to 200,000 EUR could take you much less, up to 300,000 EUR less and so on.

The same applies to investments. You can constantly invest 200 EUR per month, without seeing a big difference in the portfolio, until, at a certain moment, the compound interest intervenes and your portfolio grows rapidly.

 

The graphic result is more than clear:

Calculator_initial

200 EUR invested monthly for 20 years at 10% interest

The result is:

Calculation result

Result after 20 years

The graph “speaks” for itself:

Balance after 20 years

Balance after 20 years

So don’t get lost on the road, but continue at maximum acceleration, until you reach that goal of 1 followed by a few zeros.

After that point, things will become easier, automated, routine.

So the “secret” is that there is no secret: all that is needed is discipline, patience and time.

New investment project announced by Bulkestate – Amālijas Street – 2nd stage

Bulkestate - Amālijas Street

Bulkestate announced today that it is preparing to launch a new investment project: Amālijas Street – 2nd stage.

Launch time: Friday / August 7, 2020 / 17:00 (EEST)

Investment opportunity

Interest rate: 14% (+1%)*
Investment target: 150 000 EUR
Loan period: 12 months
FLTV: 15%
Security: mortgage

*Bulkestate incentive payment

For this project Bulkestate offers the following special incentive pay (cash-back) for investors by sharing part of its fee received from the client:

  • Investors making EUR 10,000 or larger investments will receive a 1% incentive payment from the invested amount.
If you invest for the first time at Bulkestate don’t forget that you can get 5 EUR cashback bonus after the first investment. You can register here for the new offer.

 

For other bonuses visit our Cash-back & Bonuses page.

New skin in the game project in Riga from EVOEstate – Krišjāņa Valdemāra str. 145

EvoEstate logo

Evoestate announced today that a new investment project with “skin in the game” from Evoestate founders is available on the platform for all users: Krišjāņa Valdemāra str. 145 k-1 – 55, Riga, Latvia in Riga, Latvia.

Skin in the game: Founders of EVOEstate invest personal capital in these deals

Krišjāņa Valdemāra str. 145 k-1 – 55, Riga, Latvia in Riga, Latvia

Krišjāņa Valdemāra str. 145 k-1 – 55, Riga, Latvia
The project is raising € 100 000.00.
12% annual returns.
Loan term 24 months.
LTV (loan-to-value) ratio is 25% !!!!!
Originator: NORDSTREET

If you invest for the first time at EVOEstate don’t forget that you can get 0.5% cashback for 6 months after the first investment. You can register here for the new offer.

 

For other bonuses visit our Cash-back & Bonuses page.
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