1. Tell us about yourself and what you do for fun.
I came to Bratislava, capital city of Slovakia, to study. Artificial intelligence and cognitive systems always fascinated me, so after finishing engineering study at Faculty of Electrical Engineering and Information Technology of Slovak University of Technology (FEI STU) I applied for job at Institute of Informatics of Slovak Academy of Science (ÚI SAV). After certain time I was forced to reconsider my work there though. Today I work in private sector as IT developer and with R&D spend just fraction of my free time.
I have other hobbies too: various sports, musical instruments (own some and want to learn play some more) and part-time doing musical accompanying for local children’s folklore ensemble. After all, folklore is my companion since early childhood, I sing 24/7 (in spirit at least when at public :D) and I used to dance it actively before. I also read fantasy and sci-fi or write some stupid little programs, useful at the moment. :D
2. What made you start investing with Bondora and are you investing for a specific purpose (i.e. retirement, extra monthly income, house purchase etc)?
I discovered Bondora in 2016. Somewhere I overheard expression “p2p lending” and got interested, so I searched for principle, pros and cons of investing that way and found some local and abroad platforms, including Bondora. I liked idea of direct lending, skipping long chain of middle-men and minimizing cost of process that way, it enables to decrease borrower’s interest and increase lender’s interest. Win-win scenario if you ask me. Moreover, Bondora as middle-man requires laughably low and very clear amount – 1% of interest, if loan is not defaulted. There are no hidden meaning and they carry similar risk to investors if loan is defaulted.
“My original purpose for investing was cash reserve, but since my net interest stays pretty high, I do dare to think of a nice (and premature) retirement possibility.”
I was raised to keep my spare cash safe. Bank interests are dropping so I presumed correctly, invested money can be relatively safe yet generate an amount of interest worth of being called gain. Bondora wins for 2 reasons: 1) it exists since 2008 and each year is proof they are not after fraud but try to do business honestly and in long term. 2) I searched for client feedback and found no significant dirt under their carpet.
Yes, most of responses were negative, but it is usual that satisfied clients are less persistent in notifying public than unsatisfied ones. Also, these negative responses were just few in count and their main issue could be summarized as communication error. Sometimes Bondora overlooked to inform clients when doing some changes in recovery process, maybe incorrectly labelled some interest figure, or clients simply done incorrect calculations themselves. Everybody learns and up to today I noticed no more than few cosmetic bugs. So, back to my second point – I believe, that if client’s biggest issue is if their interest is 13% or 17%, it is safe to assume I have a decent chance for 2-digit interest and no big ugly surprises awaiting.
3. What were your goals when you started and what is your net return today?
My original purpose for investing was cash reserve, but since my net interest stays pretty high, I do dare to think of a nice (and premature) retirement possibility. In the beginning I expected approximately 10% proclaimed by Bondora, yet my net interest never dropped under 18%, for now. I’ve done some calculations for the coming decades – expecting average net interest at 14% and development is so promising I could switch from monthly investing to monthly withdrawing (partial withdrawal of monthly income) in merely 6 years. Plus my retirement income would be better than my parents ever dreamed of.
“I’ve done some calculations for the coming decades – expecting average net interest at 14% and development is so promising I could switch from monthly investing to monthly withdrawing (partial withdrawal of monthly income) in merely 6 years.”
4. What features do you use and how do they work for you? E.g. Portfolio Manager, Portfolio Pro or the API.
I am really grateful for the automatic Portfolio Manager. Investment calculation machines are not exactly my cup of coffee so I gladly put myself into well care of people with most precise knowledge of topic and capable to configure the Portfolio Manager for most reasonable interest with minimal risk involved. That is why I do not use API nor Portfolio Pro – for me they represent chance to mess up settings and decrease interests. Since I invest only what I can spare, I set the Portfolio Manager to Progressive setting.
As for the Secondary market, I enabled buyout of current loans without increased price. As they say – do to others only what you would wanted them to do to you. Such loans are not extra risk for me and if time comes when I would need to sell my portfolio, time needed could notably shorten if others have secondary market buyouts enabled.
5. If you could give any advice to someone starting out with Bondora, what would it be?
If you consider investing with Bondora, here are some tips:
- If you can spare larger amount of money, make first deposit big. Here is the thing – online company with non-secured loans is greater risk. The longer you invest – if you deposit a big amount right away, in 4-5 years you can double your investment and can relatively quickly withdraw initial sum back “to safety” and what is left is pure gain.
- If you plan to invest monthly, do not forget that reported net income does not reflect your totally invested sum. For example, I have started from zero putting in 100€ monthly. In one year my total investment was 1200€, but with 20% net interest p.a. my interest was not 240€. It is because my investment grew linearly starting at zero, so my average investment was in reality 600€ and expected return 120€ is what I actually earned.
- And two more notes. If you’d love to start investing but are not sure how much you can afford to pay monthly, try to put aside the amount left on account before payout…maybe there will be a few tens of € per month and after you are sure such amount means no harm to you, start investing. Also do not forget legislative. It is probable your country will expect you to pay tax from interests received. Check “Reports” section to see how much you earned in previous calendar years.
6. Do you think Slovak’s invest differently to the rest of Europe? If so, how and why?
I can’t speak in name of all Slovak, but most people I know favour keeping out of debts and ending them as fast as possible if it could not been avoided. With no debts, we can freely manage our money without fear they will be needed elsewhere.
“But, mentality changes and young people today fall in debts too easily, living mighty today and poorly tomorrow. I hope we will find right balance pretty soon.”
On the other side we put our desires aside, dreaming of freedom with no guarantee it will ever come. Investing with such mentality is thus difficult. But, mentality changes and young people today fall in debts too easily, living mighty today and poorly tomorrow. I hope we will find right balance pretty soon. I definitely try to. Despite belonging to the first group I decided to invest part of my savings into relatively safe Bondora rather than into high gain, higher risk cryptocurrencies.