Happy New Year in 2020! I hope this year will be better than the last one for you and your families! I hope we can put behind this terrible year, that came for all of us with a lot of alterations in the normal life, many restrictions and hard times.
For me it was a good year, my job was safe and I worked on a project that I liked. For my wife, not so good. Her job is not so safe, her company fired some people this year, the Berlin office is getting smaller and smaller at some point it will close. But hopefully she will find something else until that moment comes.
Now, let’s get to investments! As I said in the previous post, I’ve started investing at the beginning of 2020, with peer-2-peer lending and stocks & ETFs. I’ve have invested in three instruments and another asset class (real estate) was already in my portfolio:
- Real estate. As I said in previous post, we own an apartment in Romania, where the market is not so good for rentals, you don’t have too much protection from the law as a landlord (the tenant can make a lot of damage and get away with it) and also the market is leaned towards the tenant, as many people are looking to buy and not to rent. Maybe I will elaborate one day. This apartment was rented for 9 months last year to an acquaintance, so below market value and brought 2700€ or 3% return. It is a normal return in mature markets for real estate, but I know that it has more potential (rented for whole year with 400-500€ would mean a return of 6,6%) and if this apartment will not reach its potential or it will be hard to rent out, I will sell it and use the money for better purposes.
- ROBIN, a Robo Advisor from Deutsche Bank, that is supposed to make transactions in your name and spread the money in different directions, depending on your risk appetite. My money have been invested in stocks, ETFs, bonds, goods (oil etc.). I’ve have started with 2000€ and at the end of the year I have 2053€. My gain is 53€, or 2,65%. For me this is not a good ROI and I will liquidate this account and invest the money in something more profitable.
- Stocks and ETFs, using Trade Republic as a broker. Trade Republic is a startup from Berlin, mobile first broker that offers transactions at lower cost, you can have an individual transaction for 1€ and the savings plans for ETFs are free. I think it copies quite a lot Robinhood from the US market. Here I’ve bought individual stocks and made two savings plans for two ETFs: Core MSCI World and NASDAQ-100. Here I’ve invested over the year 3900€ and finished 202 with a portfolio value of 4998€, 1098€ or 28,15% gain. I’ve also received 2,25€ from dividends in December and I am very happy from the performance and I will continue to invest in this direction. (You can open an account on Trade Republic and earn 15€ at the first transaction)
- P2P lending. Here I’ve started using in the beginning Bondora Go & Grow, that gives you 6% return. That’s not bad for a safe return, but I was not so confident in this type of investments and I’ve withdrawn everything (500€) when the COVID-19 crisis started. Maybe I will give it another chance in the future. If you want to invest with Bondora, you will get 5€ starting bonus if you create an account using this link.
- P2P Lending, part two: Mintos. Mintos is the biggest European platform for personal loans and I’ve started here by investing 2000€. The performance of this portfolio is not so great, 122,78€ earned (or 6%), according to Mintos, but I also have 460€ in recovery (with a possibility to be lost forever), after some Loan Originators defaulted or had problems with the authorities (licences revoked, for example). Since I am not so confident in Mintos capability to recover those funds, I’ve stopped investing and withdrawing fund until my portfolio will be around 600€. With the money freed up, I will search for another platform to invest, and also to test it and share my opinion with you. If you are eager to invest with Mintos, you can open an account using this link (and support this website in the same time).
Over the last 12 months I’ve earned 2829,48€ as passive income. Tracking my monthly average gains is a better way to see where am I in this journey to financial freedom, so the average is 235,79€, which puts me at 15,72% of my monthly first ‘passive’ income goal, which is 1.500€/month.
All in all it was a goos year regarding investments, considering the pandemic and the crazy times, my inexperience in the investment world and other factors. I wish I could invest more, but a large part of the savings are left in the bank account for buying a house. After we will buy the house, I will re-evaluate the family budget and hopefully more funds will be available for investments.