September went by very fast! As I’ve explained before, I’m currently in Albania where I can only stay for 90 days without a visa as a European, so I really need to make my time count here while I’m working an an interesting project. I’m currently traveling a lot for this until I’m leaving in a few weeks, so I’ll keep my update short this time.
My Passive Income in September
When I have little time to spend on my investments, I like the feeling that my money is at work for me while I have my focus on other things. September was an absolute record month with a whopping €805,58 in passive income, a massive jump from last month. Although the interest payments from my P2P investments were down to €255,90, a large number of dividend payments totalled €549,68.
Introducing The 12 Months Trailing Average
As you can see in the graph above, my passive income is going up over time, but not in a straight line. This is not because my portfolio is performing better or worse from month to month, but this is rather the result of payment schedules and seasonal influences. Interest on P2P loans can be subject to delayed payments, or simply follow a certain 3 or 6 month payment schedule, which is for example the standard with real estate loans. Dividends are usually paid out fairly regular, but also follow 3, 6 or 12 month schedules in which payments might not even be equally distributed between the payment cycles.
As a result my monthly income can sometimes be much higher (like this month) or suddenly drop (last month), making it not the most accurate measurement to record where I stand towards my longterm income goals. Therefore I’m introducing a new measurement, called the trailing 12 months average. This is simply the everage monthly income over the last 12 months. So the current value is the sum of all monthly income between October 2020 and September 2021 divided by 12. In my next update, the income from October 2020 will be dropped and replaced by the income of October 2021 etcetera. This way the growth of the income number will lag a bit behind, but any seasonality will be removed and the growth will look much more stable.
From now on I will use the trailing 12 months average to measure my income against my goal of €1500. In September the number reached €498,94 which means I’m currently at 1/3 towards this goal.
P2P Lending Portfolio
The return on my investment in P2P loans went a bit down to €255,90 in September. At the beginning of the month I invested an additional €900 so my total portfolio in P2P lending is now worth €40.819,89.
Similar to previous months I invested an additional €500 on Mintos at the beginning of September. My goal is to increase my portfolio value to €20.000 over the nexth months. I also received €103,33 in interest payments, which I obviously reinvested as well.
Last month I elaborated extensively about the investment firm license that Mintos obtained and the transition from loans to notes that comes with it. Read more about this here. Mintos has now announced that they will start listing the first notes this month, so I’m looking forward to see this in practice.
While last month I recorded a record amount of interest from EstateGuru, in September the income dropped to €53,56. Obviously this is the result of the payment cycles so nothing to worry about. Due to the large amount of interest and principle payments received last month, I had a lot of cash in my account, but luckily there were a lot of interesting new projects on the platform, so I had no problems to reinvest everything quickly.
EstateGuru also reported a negative milestone in September. The platform has always stated that investors never lost any capital, but unfortunately the first official loss of capital was recorded for a project in Latvia dating back to 2019. This was before I started investing in EstateGuru so I’m not affected at all, but I thought it would be good to mention this anyway. The damage is actually not even that bad, since they managed to still recover 90,9% of the capital by selling the underlying property. The loss of capital is mainly due to the costs and fees involved with the backruptcy and the process of recovering the funds.
I think this would happen sooner or later anyway and it will definitely not be the last case. However, it also demonstrates the strenght of real estate backed loans as even in the worst case of a bankruptcy, over 90% of the captial was still recovered.
At the beginning of September, instead of adding €250 like last month, I decided to accelerate my journey to reach €1 a day from Bondora Go&Grow by adding €400, the maximum monthly amount Bondora currently allows to invest in Go&Grow.
The interest on my Bondora Go&Grow account was €22,58 in September, which also had a day less than August.
In September I received €33,92 from my investments on the IUVO Group platform. No further news or changes here.
In September I received €25,24 in interest from my investments on the PeerBerry platform.
PeerBerry also came with a shocking announcement that they were withdrawing their application to get licensed in Latvia. The news came as a bit of a surprise, as they were already in touch and collaborating with the Latvian authority for so long you wouldn’t really expect this decision in such a late stage of the process.
Meanwhile PeerBerry CEO Arūnas Lekavičius has givin a detailed explanation for their decision. Although PeerBerry is officially registred in Latvia, the entire company is actually Lithuanian. Both management and employees are Lithuanian, they speak Lithuanian and not Latvian, and they are physically based in Lithuania. In order to get licensed by the Latvian authorities, they would not only need to have a physical presence in Latvia, but a lot of the official communication with the authorities needs to be in Latvian as well, as English is not accepted. Both requirements are a huge issue for PeerBerry which only has a small number of staff on which they heavily rely. With the employees not willing to relocate, they would need to replace the entire team that built the company from the ground up, causing significant harm to the company culture. With such a small number of employees this could even be deadly for the continuation of their operations!
Having been an expat working in an international environment for many years I can totally relate to the challenges that PeerBerry is facing so I do sympathize with their decision. However, this also shows some bigger problems to get the P2P market fully regulated.
First of all the fact that the Latvian authority requires a physical presence and communication in the local language only, shows to me that the motivation to step up and regulate the national P2P market is not solely aimed at protecting investors, but at least partly driven by the goal to stimulate the Latvian economy. Why else would they require to employ Latvians who speak Latvian to physically work, pay taxes and spend their money on Latvian ground?
With Latvia stepping up to regulate their fintech industry, we will also probably go through a long phase in which P2P platforms can shop around countries for the best conditions until countries start collaborating to ‘close the net’ or when regulation is coordinated on an EU level. I hope I’m wrong, but I expact this to still be many years away.
Viainvest brought me €17,27 in interest in September.
There was also white smoke coming from the Viainvest camp as they officially obtained their investment firm license from the Latvian Financial and Capital Market Commission on September 30th. This means investors will have to accept the new terms and conditions that will be published in the next few weeks. A suitability and appropriateness test will also be required but no exact timelines have been given yet.
P2P bonus offers
Do you want to invest in the P2P platforms that I discussed above? Make sure to check which platforms currently offer a bonus for new signups. You’re not only doing yourself a favor but by using my links you are also supporting my blog so I can continue to create more valuable content.
Stocks & ETFs
In September I received a record amount of €549,68 in dividend payments from the following stocks and Exchange Traded Funds (ETFs):
|Johnson & Johnson||€7,62|
|Royal Dutch Shell||24,09|
|Wheaton Precious Metals||€32,37|
|First Majestic Silver Corp||€0,51|
|SPDR S&P Euro Dividend Aristocrats (ETF)||€101,12|
|SPDR S&P US Dividend Aristocrats (ETF)||€25,15|
|VanEck Vectors Global Real Esstate UCITS (ETF)||€38,76|
My divided payments reached an all-time high mainly because some of the dividend ETFs I’m more heavily invested in had their payout month. Since I continue to invest every month I’m expecting the payments to continue to go up over the long term, but the amount will also fluctuate month-to-month.
I’ve kept this update rather short while I’m traveling a lot within Albania at the moment. Later this month I will move to my next destinaion: Greece. Looking forward to share my next update from there!