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Mintos has reached profitability in 2017 – Projections for 2018

By MPI10th May 2018News, Peer-to-Peer Lendinginvesting, investors, Mintos, peer-to-peer lending, profitability, strategy

After three years since the launch, Mintos has turned an annual profit for the first time. In 2017, Mintos revenue increased more than four-fold to over EUR 2.1 million and net profit was EUR 196 000.

During 2017, Mintos experienced significant growth, making it the peer-to-peer lending market leader for continental Europe with a 38% market share according to AltFi Data. Since their establishment, Mintos have exceeded EUR 660 million in cumulative investments by investors and they expect the amount of loans funded to reach EUR 1 billion by the end of the year.

“Last year was a strong year for us and we established ourselves as a leading player internationally. We are very pleased to see that our business model is working and that we have reached profitability in only three years after launch, which these days isn’t that typical for startups,” says CEO and Co-founder of Mintos, Martins Sulte.

In 2017, Mintos made considerable investments in technology, people and the marketplace, making their service even more convenient for investors on Mintos. Last year they launched a currency exchange featuring transparent exchange rates and fair fees, which allows investors to exchange money at a lower cost than through banks. As a result of this investment in growth, the number of investors on Mintos also grew rapidly. As of May 2018, 58 000 investors had joined the marketplace and we expect to reach 100 000 investors by the end of the year.

Currently, Mintos has three offices employing 50 people in Riga, Warsaw and Mexico City, with offices shortly opening in Brazil, Russia and South East Asia. By the end of the year, they plan to double the number of their employees.

“… for us at the moment growth is more important than becoming a profitable business. With the proven success of our business model, we will continue to invest in technology and product and double our headcount by the end of the year. That will allow us to double down on our mission to enable the free and efficient movement of capital around the world with the help of technology,” says CEO and Co-founder of Mintos, Martins Sulte.

Mintos strategy is growth at an ambitious, but steady pace – thus ensuring their sustainable development. According to projections in 2018, the marketplace turnover will increase by 2 to 3 times. In 2018, they will focus on growing both sides of the marketplace by increasing investor demand, as well as loan supply from current and new locations by expanding the investment opportunities on the marketplace in Africa, Latin America, and Southeast Asia.

Lendo has published its latest operational results

By MPI2nd May 2018News, Peer-to-Peer Lendingcashback, consumer loans, investing, Lendo, Mintos

Georgian non-bank loan originator Lendo has published its operational results for the first quarter of 2018. According to the figures, Lendo is now the leading non-bank lender in Georgia in terms of loan volumes and portfolio size. As of the first quarter of 2018, Lendo disbursed more than EUR 90 million worth of loans since its inception.

Due to the changes in regulation in Georgia in 2017, Lendo focused on instalment loans, which has provided the company with a steady growth of its loan portfolio and income stream. As a result, the company’s revenue has exceeded levels reached before the interest rate restrictions were implemented.

Lendo offers its unsecured consumer loans through its established network of branches across the largest cities in Georgia. Lendo is a well-known brand in Georgia and employs almost 200 employees. The company prides itself on its friendly customer service and as a result had more than 130 000 active clients as at March 31, 2018.

Lendo will publish its audited 2017 financial statements in June 2018.

Lendo has also reactivated its cashback campaign on Mintos peer-to-peer lending marketplace. If you invest on Mintos in Lendo’s loans with a maturity of 9 months or more between May 2, 2018, and May 16, 2018, you can earn a cashback of 1.5%.

If you want to earn the cashback, you need to be enrolled in the campaign before you make the investment. Only investments made on the Mintos primary market qualify.

Why smart people do stupid things with money?

By MPI24th April 2018Smart moneyfinancial behavior, intelligent, investing, money, smart, stupid

Smart people

It’s a pretty good question, is not it? How do intelligent people manage to do things with money and after a while become totally disappointed with their “successes”?

I suggest you think a little bit!

And here I do not mean people without financial education or any other kind of education.

Let’s think of intelligent people who have completed a faculty or a master and who have obtained a job because of their competencies or who have developed a start-up that has become a “small profitable money machine”. How do they become totally disappointed with their own financial situations, even though they have earned a lot of money over the years?

Here are three of the most common reasons:

They have a disastrous financial behavior. Although there are people who have extraordinary professional, social or family behavior when it comes to financial behavior, they completely ignore it!

They are implusive consumers, meaning “perfect” for traders. Buy anything at any price. If they like something, they put in a basket without considering how much money they have available until the next salary. “I even withdraw money from my credit card if I do not have any money left in my salary account”. You’ve heard of such people, right?

The first step in changing financial behavior is definitely analyzing your own behavior. If it’s not one you can be proud of, you can change it. Instead, if you go like a ostrich – just put your head in the ground and deny your own financial situation – it takes only a short while until the frustrations and shortcomings will arise.

They omit the financial planning activity. They do not have financial goals, they have no clearly defined plans to follow, and this is why they do not take into account the financial planning activity. Surprisingly, all people know that without a plan whatever it is financial or any other type, the chances of success tend towards zero.
To increase your chances of succeeding in what you propose, take a pen and a sheet, write down your short, medium, and long-term financial goals, make plans for action, and set up tight financial targets.

If you want a house, set the amount of money you need, the detailed plan to get that amount, the intermediate targets delimited by clear terms and get to work. Without action, the results are always zero!

They do not have information, skills or financial skills. The result of not very profitable investments is often the lack of understanding of financial products and services and business investment in areas that they do not know.

I’m sure you’ve heard questions like “I have 10,000 euros and I do not know what to invest in.” Or “What are the most profitable businesses?” Often, those who ask for such questions are people who lose money because of their lack of skills and entrepreneurial experience.

Lack of understanding of financial products and services such as savings accounts, deposits, investment funds, shares or the Forex market can also cause a small amount of trouble if you do not understand how they work.

Developing a “healthy” thinking, how the most important financial products and services work, and developing entrepreneurial skills can help you increase your personal income.

Is peer-to-peer lending safe for income investors?

By MPI13th April 2018Smart moneybonds, investing, loans, peer-to-peer lending

Anyone who has borrowed to buy a car or a taken out a home mortgage is familiar with the basics of how a loan works.

In a nutshell, borrowers ask for money, and lenders decide how likely it is that they will see that money back. If repayment is unlikely, those lenders charge a high rate of interest to offset that risk, and if the borrower is trustworthy they charge a lower rate of interest to win the business from competing banks.

But loans aren’t just ways to buy things. They can also be powerful ways to invest for income.

For instance, bonds are essentially a debt that’s owed by a corporation or a government to investors. A 10-year U.S. Treasury bond is a 10-year loan to Uncle Sam, and at current rates the government will pay you about 2.3 percent annually in interest – along with repaying your initial loan in full at the end of a decade.

That’s not just a nice way to grow your money, but a safe one, too.

In a digital age, debt markets have become more accessible for both investors and borrowers alike. Consumers can easily compare dozens of loans on the internet, investors can research and purchase a wide variety of bonds with a click of their mouse and more competition drives down the costs of a loan for well-qualified borrowers.

Another interesting development in debt markets has been the rise of peer-to-peer lending.

Peer-to-peer lending went mainstream about 10 years ago, with the launch of Prosper and Lending Club as two of the first large U.S. portals for so-called P2P loans. The idea was simple: an individual borrower makes their case for why you should give them money, and regular consumers can decide if it’s worth putting up the money.

It may sound like a scam to the skeptical or to the risk-averse. But remarkably, it worked in many cases – and continues to work today.

A common example is someone who has $5,000 in credit card debt with a 20 percent annual interest rate, who is asking the P2P community to lend them $5,000 at 8 percent or 10 percent. Everyone wins in that scenario, with the borrower paying less to their credit card company and the internet lender getting a nice return on their investment.

The downside, of course, is that investors who purchase debt via bonds from brick-and-mortar corporations have a much easier time of knowing what they’re getting in to. On a peer-to-peer lending site, doing your due diligence is much harder.

So how do you know if peer-to-peer lending is right for you?

Well, for starters you need to assess your risk profile. The potential for 8 percent or 15 percent annual returns is nice, but there is a very real case your money is just walking out the door. So never consider P2P lending if you can’t afford to lose a big chunk of that principal.

If peer-to-peer lending is still an option you’re interested in, then find a major peer-to-peer lender that is transparent about its process and track record. That doesn’t make your investment in P2P loans via these sites a sure thing by any stretch, but can help mitigate some of the risks of default.

Lastly, always consider the importance of diversification. If you want to invest in peer-to-peer lending then make sure it’s only a limited part of your portfolio. And rather than dish out $10,000 in loans to one person on a P2P portal, consider 100 smaller loans of $100 a piece so you don’t get hit as hard in the event of default.

What is Cash Flow? Find out how you can use it to your advantage

By MPI23rd March 2018Peer-to-Peer Lending, Smart moneyaccumulation, Bondora, cash flow, financial freedom, investing, investor, money, p2p investing

Cash, and more so the lack of it, can be a determining factor in whether you will achieve your goal of financial freedom. In short, cash flow is the net amount of cash that is flowing in and out of your accounts each month. Traditionally, this has been an important measure for business owners as they can keep track of how much money they are generating from customers that they offer their services to. It’s also important for them to know how much they are paying out each month for things like business loans, office rental and many other expenses.

However, the same cash flow measures can be used by individuals like you and me. Let’s say that each month you earn €2,000 net per month from your employment, €500 from your side hustle and €200 from your investments. But you need to live, so you can deduct your mortgage payments, car costs and any other expenses you have. The result of this will be either a positive or negative cash flow.

Cash Flow from P2P, Real Estate and Income vs Accumulation Funds

One of the most popular asset classes today is Peer-to-Peer (P2P) lending, notably for the opportunities it gives investors to become the bank and receive a monthly cash flow. Let’s say you invested €10,000 across thousands of loans from a range of risk ratings, loan durations and countries. Every month, the borrowers will make their loan repayments which consists of principal and interest, you then have the option to withdraw this cash flow or reinvest your profits to compound your interest and maximize your overall returns.

Quite similarly, real estate investments work in a comparable fashion. If you buy a rental property for €100,000, each month you will receive a payment from the tenants (e.g. €600 per month). You might use some of that to pay the remaining mortgage on the property or add it to a growth account to save a deposit for another property. An important difference between this and P2P is risk, as previously mentioned you can spread your risks across thousands of loans where as you rely on the payment from a tenant in a single property – if they default then there is no other cash flow. Protect your cash flow by diversifying within your chosen asset class.

If you are familiar with investing in equity funds, it’s likely you have come across the accumulation vs income conundrum. Simply put, an accumulation class fund will reinvest any cash generated from the investments within back in to the fund, over time this can significantly increase the size of your total pot. On the other hand, an income class fund will pay any cash generated from the investments back to you to use as you wish. This is for those who are looking to increase their total monthly cash flow amount and are not necessarily focused on the long-term growth of their investments. Almost always, the accumulation fund will be the most profitable in the long run.

Take a look at the graph below:

The same principle can be applied to your investments with Bondora, as the only difference is the underlying asset (consumer loans rather than equities). In the graph above, we have compared the growth of a portfolio with the same interest rate, starting capital and duration, the only difference being reinvesting your monthly cash flow compared to withdrawing it each month. Using our Portfolio Manager, starting with €10,000, an outlook of 5 years and a respectable interest rate of 10% per annum, there’s a stark differential in performance.

In fact, by simply allowing the Portfolio Manager to reinvest your monthly cash flow, your account value at the end of the 5 year duration would be 33.9%, or €4,462 larger (€17,623.42) than if you did not (€13,161.42). This is literally how you can “Make your money work for you” with minimal effort.

Cash for thought

Do you recognize the quadrant above? If you do then you are most likely well accustomed to the benefits of having a positive cash flow, congrats! For those who are still puzzled, this peculiar yet simple diagram is the brainchild of Robert Kiyosaki, the king of cash flow. As the creator of the Cash Flow Quadrant, Kiyosaki divides the general population and their mindset in to 4 separate categories:

E: Employee – This person values job safety and security over everything.
S: Small business owner/Self-employed – An independent person who wants to do everything related to their business by themselves.
B: Big business owners – People who create a large business run by intelligent people.
I: Investor – Those who make money work for them.

His main theory is that people should learn how to become big business owners and learn how to become investors, as the people on the left side of the quadrant only have active income compared to those on the right earning passive income. Creating a viable and sustainable source of passive income is seen as a core principle of achieving financial freedom.

Source: www.bondora.com

4 ways to save money for investing

By MPI14th March 2018Smart moneycutbacks, investing, p2p, refinance, savings

Something we hear time and time again is “I would love to start investing, but I don’t have any money”. By human nature, we are at times reluctant to change, especially when it comes to parting with something we hold so dear such as our money. When you hear your friends or that rich uncle of yours talk about their investment portfolio, know that everyone has started somewhere and the most critical thing you can do is to get started. But how can you actually save money each month for investing?

If you’ve reviewed your monthly budget and you still don’t think you can start, here are 4 things you should consider.

1. What are you planning to invest in?

Firstly, you should think about exactly what you want to invest in as this will determine how much capital you need to get started and also how you can get there. For example, if you are choosing to invest directly in to real estate then you will need quite a considerable cash amount available. Not to mention, you will needed further capital available for repairs, maintenance and any related fees for agencies, insurance and legal.

If you’re investing in securities, P2P or something similar, it’s likely there will be a minimum investment amount required but significantly less than real estate. Once you know how much you need to get started, you can move on to the next step.

2. Refinance existing debt

If you’re in a situation where you have absolutely no debt then you can skip past this one (and congratulations!), although statistics show that the average debt per person in the UK is £8,000, with the highest debt-to-income ratio in Europe seen in Denmark. Start with your largest debt, i.e. your mortgage, and check if you are getting the best interest rate available. Your property may have increased in value since you last checked and therefore your equity will have increased, this is usually the single most important factor for a bank when determining the rate they can offer you. Another common debt is a credit card; today there are a number of providers offering 0% interest rates for 12 months and over if you complete a balance transfer to them. Take advantage of these fantastic offers while they are available and use them to pay off your debt quicker, smarter and free up further income for investing.

3. Pay yourself first

Before you pay any bills (or anything at all for that matter), you should always pay yourself first. The day you get paid, you should set aside a minimum of 10% of your net salary to pay yourself and use the funds for investments, then you can focus on your bills and everything else. Once you get in to the habit of doing this, you may find that you choose to up your monthly percentage that you invest to 20%, even 30%, because it can be extremely motivating once you start to see your money work for you and generate interest.

4. Make some cutbacks

You don’t have to give up your car or downsize your house, but we’re certain that you can think of a few things you pay for each month that aren’t really necessary. What about that gym membership that you never use? Maybe you have a subscription to a magazine or a set of TV channels? The little things add up, so make a list of all the discretionary expenditure you have each month and you’ll be amazed at what you find.

Source: www.bondora.com