sunnuntai 30. kesäkuuta 2019

This Blog has a new name and look! - Check this out!

I wanted take writing more seriously, so my new blog address is :

Come on in and join me! I will post 1-3 articles per week :)

Lapin, Talvi, Lumi, Maisema, Talvinen, Suomi, Kylmä

torstai 27. kesäkuuta 2019

P2P-lending vs Dividend investing

Peer-to-peer lending: more risk, more return

P2P -lending has become more and more popular in just a couple of Years. Peer-to-peer lending basically means that you lend money to individuals or businesses through some online platform/service.

One example would be Mintos, which is established P2P-player in Europe. One has to just land some money to the platform and invest it in different loans. Diversification is important here, as some of the loans will never be paid back. Luckily, Mintos has a buyback guarantee which basically means that the loan originator will buy the loan back from the investor if it happens to be late more than 60 days. If you don't invest in loans that have a buyback guarantee, you usually get higher interest rate but also lose some of your money, because certain percentage of borrowers never pay their loans back. P2P -lending platforms usually provides pretty good interest returns for investors: usually from 9% to 12%.

Screenshot from my Mintos P2P -account

P2P-lending can be quite profitable, as you can see. Lots of new P2P-platforms have established their services in past 2-3 years. However, if we enter into a recession or global economic growth slows down too rapidly, P2P-lending can be very risky business. P2P-platforms have not yet been tested properly during any big recession. During a bear market it would only be natural if P2P-borrowers would not be able to pay their high-interest loans because of personal bankruptcies.

Dividend Investing: Relatively safe and secure

Dividend investing is an old way of accumulating wealth: you pay shares of businesses that do very well and thus are able to pay you dividends. Usually those dividends have a tendency to grow every year, if you decide to focus on these solid companies that have very good track record. Historically, companies that have been able to pay big dividends, have also been safe bets also with their growing share prices. Of course, during a bear market, there are very few stocks that actually rise. On the other hand, during the bear market, these dividend stocks are on sale. 

Compared to P2P-loans, dividend yields are not as big and juicy, but dividend yields are not the one and only thing you should focus if you invest in dividend stocks. While dividend yeilds are usually 0-5% annually, P2P-loans usually earn you 9-12% profit annually. However, dividend investing means that you buy shares of the company, which also means that the share prices can (and usually will) go up. Thus, dividend investing might be more profitable thatn P2P-lending in the long run, or vice versa. Who knows that? 

Dividend stocks usually earn the biggest capital gains 

It is not too easy to compare dividend investing and peer-to-peer lending. Both have their pros and cons. One thing to remember is, that P2P-investing has not been around that long, so please do not put all your eggs in one basket :) !

maanantai 17. kesäkuuta 2019

Facebook trying to get piece of Crypto - Sign of a bull run and future mass adoption?

Facebook is launching its own cryptocurrency, GlobalCoin, which will be used for payments in Facebook's platforms (Faebook, Instagram, Whatsapp) but also in partners platforms. These partners are rumoured to be Uber, Spotify and Ebay, only to name a few.

The purpose of Facebook's new, historical initiative, is to unlock new engagement and revenue streams.  The coin is not going to be a "real" cryptocurrency according to true Bitcoin nerds. It is going to be a stablecoin linked to a basket of fiat currencies in order to prevent high volatility. It is not going to be fully de-centralized as Bitcoin is. But, it will have same features which make Bitcoin unique from banks and traditional fiat money system. With cryptocurrency, you are free from banks, big fees, geographic restrictions and central banks.

This is something big. This will bring lot of attention to crypto space. If Facebook's GlobalCoin achieves even some kind of mass-adoption, people are more open to try other cryptocurrencies. I think that Bitcoin is already benefitting from Zuckerberg's effort. We have seen a steady bull run for 4 months already. 

tiistai 4. kesäkuuta 2019

How I track my daily expenses and why should you do it too !?

Tracking your daily expenses is a HUGE thing when you are pursuing for financial independece. It is one of the things that most people just don't do. I did not do it myself, until couple months ago I decided that I need to start doing it, because I spent too much on groceries and I wanted to limit my expenses even more.

Why should you track your expenses?

Many people don't know how much they are spending and what they are buying. It comes as a surprise for people that they spend so much money without even thinking it. Insurances, transportation, clothes, housing, hobbies, subscriptions, food etc. When you actually track all of the money you spend, you will easily see how your financial actions dictate your account balance. That is a crucial part when you are trying to became financially free. Most of the people in western countries save max 15%, but if you are aiming to achieve financial independence, that number should be at leat 50%. It is not even that hard, but you just have to be mindful about you expenses and reduce them whenever possible (without losing your quality of life).

Also, I know people who are even afraid to see their account balance, because they have spent too much money. You might have had the same feeling after a night-out when you wake up with a hangover and -100 $USD on your bank account.

It is easy to track daily expenses with modern technology 

Some people use Excel to track their spending, but it is kind of an old way to do it. I like to use Monefy - an app for tracking your money. The data from the app can be synchronized to your Google Drive, which is a very good thing.

Monefy is simple and easy to use.

Other apps/sites to track your money are for example MINT and Personal Capital. These are good if you want to manage all of your wealth in one place.