What can make a person miss family events, dinner dates or catch-ups with friends? Probably a lot of things, but in many cases work tend to be the reason. It is not uncommon that people misses or cancels things because something urgent came up at work. The question is if all these cancellations are a result of people loving their job so much that they prioritize it over family and friends, if it is people that are too dutiful to say no or if it is a result of an addiction to something as simple as earning a lot of money?
Do you remember our recent post “There is no free lunch” and how we have learned that if something looks too good to be true, then it IS too good to be true?
When it comes to investing in p2p loans, and especially those with buyback guarantee, we have a bit of the same feeling. We are very curious about the product, but we are at the same time looking for the catch in what we immediately think is too good to be true (loans with a high return and promised buy-back guarantee?!). After researching the product for some time we have chosen to give it a shot and as you could read in our last portfolio update (Portfolio update – April 2018) we have now invested 10.000 DKK (USD 1.600) in p2p loans via the platform Mintos.
Renting out houses and apartments has been around for ages, so this should be no extraordinary investment. Innovation within the accommodation industry has been limited over the years where renting out “empty” apartments/houses on a monthly basis has been the dominant business model. If you wanted a shorter stay you would look for a hotel room or a hostel.
But bim bam boom! A unicorn appeared – AirBnB! It shook up the industry and created opportunities for the happy treasure hunters!
To save up or borrow? This question is essential when talking about how your net worth will develop the coming years.
We both believe in saving up to buy the things we want rather than borrowing. And why so? Our main reason is the total cost. Things get way more expensive when you choose to borrow the money AND your future disposable income will be lower (not forever – we know). This starts an evil circle towards borrowing more money, because it then takes even longer to save up again. Therefore we find it more attractive to save up for the things we want in advance, even though we sometimes have to wait longer to get it.
Do you know that feeling where you feel really good about something but then you find out that all the others are better off and then you feel a little bit down even though you were perfectly happy before? Thats is how we feel right now after running the numbers at the end of April. We knew our returns were good, but apparently the market was better. Well you can’t win every time..
Even though the indexes jumped ahead of us, it is funny to see how closely the three different collections of stocks developed. This just proves how correlated the financial markets are.
The right stocks!
Wait! – Before you close this post and go back and admire your auto invest low cost index fortune take notice that we didn’t just write stocks, but wrote the right stocks.
Okay so this one will probably be one of the extraordinary investment opportunities that will be hardest for you to apply to your own life. Nevertheless we have to mention stocks as the stockmarket is a wonderful thing that have created many fortunes. The only little problem with the stockmarket is that at first sight it doesn’t fit any of the characteristics for extraordinary investment opportunities that we set up in our last post Extraordinary investment opportunities – Part 1. The stockmarket seems neither new or rare and it is very accessible for the public and highly scalable. So basically the worst place to look if you want to find something extraordinary. At least on an aggregated level. The exiting part about the stockmarket when looking for extraordinary returns is however its fragmentation, variation and dynamic behaviour!
“You can only get high returns on your investments if you are also taking a higher risk” Is that true? Or are there potential loopholes?
It seems more and more people are getting introduced to the efficient markets hypothesis in some form or another. There is as such a common understanding that you can only obtain higher returns by taking more risk.
As educated in finance we have been taught about efficient markets as well – and actually almost believe it. If there was an investment that was better than other investments the money would flow to it and wash away the extraordinary returns in a splitsecond right? But do we actually live in a world where the Eye of Sauron watches all financial options? Wether you we believe it or not we will use this post and its follow ups to challenge this view.
This title refers to the saying “If something is too good to be true, it IS to good to be true”.
Maybe you mother og best friend will do amazing things for you, but firms will certainly not – unless they are paid to do so. So the saying “there is no free lunch” highlights that you should always think twice if someone offers you super high returns for no risk or products to super favorable prices.
If you have studied finance (we both have!) you will have heard the saying a million times, but it is probably because it is true in 99% of the cases. And to be fair, it actually helps you evaluate a financial product, as if the product is too cheap or have a too high return, there must be a catch.
Q1 2018 is over and it is time for our quarterly dividend update.
As many annual reports are made during Q1, a lot of dividends are paid out in Q2 (at least for firms paying an annual dividend). This being said, we still received some sweet sweet dividends, which summed up to 768 DKK (123 USD).
We have a strong feeling about the dividends for Q2 as we have already in start April received more than the total of Q1.
Even though we are not focusing solely on dividend stocks we have our own little goal to be able to fund af stock purchase by only using the received dividends. As we usually buy for a minimum of DKK 10.000 (USD 1650), we still have some way to go.
March… What a month! Started a little soft, but went up after that – for two weeks. Then straight down to losses. We have been quite confused about the volatility in the market so we haven’t bought any new stocks this month. We had our eyes on a stock called Tomra but in the process of talking it through the share price took off so we decided to wait. Maybe next month or maybe another stock. We will see.
Apart from this we had an overall loss of 4.2% which we of course aren’t happy with. It does however seem to be the whole market that is falling these days so maybe we can make additions to our portfolio cheaper next month. This could actually turn out to be good.