Investor talk with Jaak Roosaare

Dear Readers. We are happy to launch our new investor talk series here on the blog, where you can read about the experience and investment philosophies of Bondora investors. First up is an Estonian Jaak Roosaare.

What are you up to today?

I consider myself mainly an investor and a financial author/blogger. I also help to train students who want to go and sell books in USA. My mission is to help people get better with their finances and build capital so that they could have better life and have more fun in life. That is why I am an investor as well.

What was your first investment? How did it go?

My very first investment was a loan to my mom when I was 10. I learned that if you lend money out, then money earns you interest and I liked it. My first “real” investment was Estonian Telekom shares from IPO in 1999. I discovered that I enjoy learning about companies.

How have you evolved as an investor? What do you know now that you wish you knew 10 years ago?

I first started out very speculatively, this is probably common trait with novice investors. Later as I had accumulated more capital I started to learn more about different asset classes and diversification. Also, I started to focus more on cash flow and less on capital appreciation. 10 years ago I wish I had learned more about real estate – it was a great time to get started in real estate.

How would you describe your investment strategy? How do you divide your portfolio and what is the optimal allocation in your view?

I like to spread my capital around three passive income streams: rent, interest and dividends. I try to keep it balanced. My goal is to grow my assets 10-12 percent per year (using a bit of leverage as well). I try to achieve forever cash or play with house money – if my stock has doubled I sell half and then I play with house money (so rest of the position I can keep without fear of losing capital). Same idea goes to real estate as well.

How much does your daily work and interest influence your investment strategy?

I am constantly reading and learning about investing and luckily this is my hobby as well.

Do you prefer short or long term investments?

I like more long-term projects and focus on cash flow. For instance, I have given out mortgage backed loans that are interest only loans for 5 years duration. Also, I have some rental apartments that will take 10 years to get rid of loans.

In your opinion, what’s the best way to start investing?

Start by reading. I would suggest Warren Buffett biography “Snowball” and also his letters to investors. To start with smaller amounts, peer-to-peer lending is a good option.

Share your golden rule of investing with our readers?

My golden rule is to start early and do not shoot for big risks but focus on passive cash flow. Also, when you start do not focus so much on your returns but adding to your investment capital – it’s better to invest 1000 euro and make 10% than invest 100 euro and make 15%.

Have you tried different lending marketplaces? What fascinates you most about peer-to-peer instrument?

Yes I have – I have accounts in Bondora, Omaraha, Mintos, EstateGuru and CrowdEstate. I like that it gives you access to many instruments that were not available before. Also, I like that you can start small and so there is no excuse not to start.

You’re 33 years old today, what has been your best investment so far?

My best investment so far has been my marriage license in Hawaii (25 USD). On a more serious note, I invested pretty heavily during the financial crisis 2008-2009 to Baltic stock (Merko, Tallinna Vesi, OEG) and that bet turned out very well. Also, I have made nice capital gains and growing dividends from SAF Tehnika. I have got my money back already and now play with house money.