Andreas Tielmann is an active investor on the P2P platforms across Europe and his returns on Bondora are outstanding. We have a chat with him about his investing experience.
What is your background and what are you up to today?
I was born in Russia and since 1989 I live in Germany where I started to educate myself as a tool mechanic. Now, at 30 years old I am an active investor and write my blog about P2P Lending (P2P-Anlage.de) in Europe, as well as share my personal experience.
What was your first investment, how did it go and what did you learn from it?
My first investment was about 10 years ago at Deutsche Bank. They offered 4,5% return on a 1-year deposit. It was a really good investment – nearly without risk, with good interest rates at that time. Years later the interest rates have fallen until today and I have to take some risks to get a better return.
How have you evolved as an investor? What do you know now that you wish you knew 10 years ago?
At the beginning I preferred financial investments with very low risks, like fixed-time deposits. With the time, as I were always financially interested, I searched for investments with better returns. In 2008 I registered at the first P2P platform here in Germany and in 2011 began to invest with small amounts in P2P loans. I wish, that 10 years ago I had learned more about the stock market. A short time later, in 2008, there was a good time to invest in cheap stocks.
Describe your investment strategy? How do you divide your portfolio and what is the optimal allocation in your view?
My investment strategy is currently focused on P2P lending. Because of my focus it’s important to diversify in many loans and across many P2P platforms. Furthermore, it’s important to spread the risks and invest in several countries as well. I think the optimal portfolio allocation is different for everyone – it depends on how much money the person needs and if the person is willing to bear risks.
How much does your daily work and interest influence your investment strategy?
I am a very active investor. I like to analyze different investments strategies and analyze regularly to see how well investments do. It started as a hobby, but now I make regular analysis to see how good an investment was and make forecasts for future scenarios.
Do you prefer short or long term investments? Does that reflect on your personality – are you a patient or an impatient person?
Normally I prefer long-term investments. I do not like investments in which I am bound for many years without an option to exit before the term ends. If an investment is illiquid I prefer short-term. If an investment is liquid I prefer long-term. The liquidity is very important to me, because if something significant changes in the market in which I invest, I can react to the new situation. I would describe myself as a patient person and I like to have more than one option.
In your opinion, what is the best way to start investing?
Everybody should understand what they invest in and what the risks are.
I think the best is to first educate yourself about different investment types. Once you understand how it goes and what you invest in, it’s important to start with smaller amounts to get the experience. Most mistakes happen in the beginning of investments because of lack of experience. So in short – understand the investments and start small.
Share your golden rule of investing with our readers? And is there a particular book you could recommend?
My golden rule is – invest in riskier investments only the money you can afford to lose.
What fascinates you most about P2P lending?
I invest in peer-to-peer lending since 2011 on more than 10 platforms around Europe. I like the monthly cash flow and the idea behind it. Also there are normally fewer fluctuations on the return of capital compared to the stock market.
You’re 30 years today, what has been your best investment so far?
My best investment so far is my investment in Bondora.
Since I started to invest in 2013 my Internal Rate of Return is to date nearly 30% p.a. after defaults which decreases slightly because of the higher default rates. Bondora shows my annualized net return on investment at 38.83%.