We are continuing with our investor talk series. This week we share the story of our investor Roger Garner who has over 25 years of investing experience.
How did you get into investing?
My first serious investment was when somebody told me about managed funds and that it would be useful to look at those managed funds as against what kind of return I was getting from my previous company’s pension fund.
The managed fund I went into was offering 14% return, while my previous company’s pension scheme was offering me only up to 5%.
And that really was the thing when I went — uuuh, hang on for a minute. I ought to look at those things. I learned that you should be not complacent about investment. It needs periodically checking if you can get better return elsewhere.
A few decades have passed since. How have you evolved as an investor?
I constantly look at new opportunities. 25 years ago I focused on UK investments such as managed funds, then I decided I want to have a more hands-on involvement and moved in to buy-to-let investment properties here in the UK. That was going pretty well, but it dawned on me that the investments were very illiquid, there were costs involved in buying and selling. We were quite lucky, but there can be problems with tenants and so on. And I felt it would be better to be more at arms-length, so what I did then was I started trading on the stock market, generally on the US market because it’s far more liquid. I found that was probably too much involvement. I just could not do it, mostly because US different time zone. It meant staying up late.
I have always read the Economist, that’s were I came across an article on Bondora in April 2014. I became specifically interested because the person who wrote the article had actually invested so it gained more credibility. What I wanted to see was whether the peer-to-peer approach would spread the money wider than a few fund investments here and there. It was quite obvious that investing 5 euros or 500 euros you could spread the risk over many loans.
As an investor what you wish you would have known 10 years ago?
You got to try things yourself. A lot of people I talk to are only getting into the new things, they have no experience. With properties I should have gone in probably 5 years earlier, but I think I got out of it at the right time as house price inflation started to fall and now the UK government is targeting the investment by reducing tax relief on mortgage costs and increasing stamp duty on purchases.
So what I would have liked to know? What’s the next things I should invest in and how do I find out whether it’s the right one.
I am very impressed how innovative Bondora has been. If Bondora would have existed 25 years ago I would be a very wealthy man now.
How would you describe your investment strategy?
I constantly search for new opportunities. I try small investments to determine if it works, to put your skin in the game, but also to review your returns and sell the ones which is the worst performer and with those funds try something new.
How much does your life outside investment world influence your investment-decisions?
I am retired, so the bottom line for me is – I want to make sure the money does not run out before I do. In the other end of the scale, now having two grandchildren I am actually investing also for them and I have two accounts with Bondora in their name because university fees are going up every year in the UK, property prices continue to go up, there are so many people now that are locked out of university education and from getting on to the housing ladder because they just can’t afford it. So I have two investment strategies – one for me and one for the grandchildren.
One is a very long term and one is more imminent?
Yes, but hopefully not too imminent.
So, overall do you prefer short or long-term investments?
To some extent I am an impatient person. My career has been very much hands on – sort problems out as quickly as possible, being responsible 24 by 7 for worldwide operations. I am “Must get it done, let’s get on with it” type of person, but I think with investment it’s not so much short or long, but that I prefer more liquid investments. Liquid so that if particular investment is the worst performer I can get out of it. If it keeps providing good returns I am happy to stay in it.
Being in property investments might have be tricky then?
I had many properties and every three months I would review them. Actually every month I would see what the returns were and if there was one always at the bottom I would wait until the tenancy was over and then sell it. Trying to improve the net return by removing the worst every time.
What is your golden rule in investing?
My golden rule is don’t borrow money to invest.
Save up money that is yours. If you lose it, well that’s okay – it’s unfortunate, but don’t borrow money, don’t take another loan on the house. Make sure it’s your own money.
What’s the best way to start investing?
I would say that the bottom line is to talk to as many people as you can who actually do invest. If they give you their time, use it and ask them difficult questions, ask them the kind of questions you asking me, and obviously inform yourself as much as you can go to seminars, read the papers, read investment books. But then make sure you invest a little across the number of options rather than just go for one, go for a maximum of five if you can afford it. It gives you so much knowledge because you must be in it to win it.
Getting little into many investments is the only way you really learn, you cannot learn to swim by reading a book.
How did you get into P2P?
It was after reading Economist in April 2014. I invested in three: RateSetter in the UK, Wellesley in the UK and the dab into unknown was Bondora. It was very new to me, I was aware of peer-to-peer previously, but did not know anybody personally who had been into it. So I thought to try the three. I even looked at the organizations in the US, and strangely enough Harmoney in New Zealand.
From New Zealand to Estonia to UK to US – pretty much covering the globe?
I have been to 83 countries, I have lived in different countries, worked in different countries and therefore to me it does not matter where you live or where you invest. Don’t limit yourself to countries that only speak your language. Don’t limit yourself to industries you might have been involved in. You got to try it all.
You have been involved in quite a lot – what has been your best investment ever?
Strangely enough, having moved 17 times I have made more money on my own property than anywhere else, including salary. The reason for that is that in UK when you sell your place of residence you do not pay tax on it. There are periods when house prices have gone down but long term they have always gone up. I think my best deal was when I bought a house thinking I would be there for the rest of my life, but we sold it in 2 years because I was offered a job in London and that property in that 2 years went up 100%. It was an old house, I did a lot of work on it, but the price just … wow, it was incredible, I still don’t even believe it today.