MoneyZen portfolio, 2 months

Several people have contacted me to ask how I’m doing with MoneyZen so I decided to give a short overview. For those of you who don’t know, MoneyZen is a P2P (social lending) platform that’s third on the market in Estonia (following Bondora and Omaraha).

I decided to test out the site by adding in about 50€ per month. Currently my first loans have made their first payments and some are already a bit overdue. One of their concepts is having lower loan interest for premium clients, so having overdue loans is a pretty bad sign. Still, this is what my portfolio looks like right now.

moneyzen2monthsI first wanted to make a very conservative portfolio but you can see that there is a complete lack of 900+ credit group loans, so I had to downgrade a bit. As you can see, the average interest for loans is 17,5% – about 10% lower than my porfolio on Bondora.

Questions and comments I currently have

– The credit scoring logic needs a bit more clarification

– I am not sure if the low interest level really justifies itself

– If you want, then it’s probably easy to give out quite a lot of money since there aren’t that many investors on the platform yet

– Significant work should go into making info easier to see for the investor (it’s not very intuitive right now)

– They don’t have an aftermarket, and there is little or no data on revocery

I’m currently planning to keep investing about 50€ per month, meaning that it will take me until summer to reach 100 contracts, which is a reasonable level of diversification. I am hoping to see active development on their side in terms of information/statistics + an overview of how the recovery system works.


I am a boring investor

One of the things I mentioned in the interview for Äripäev was that I’m a boring investor and I recommend investing in a way that’s boring as well. I had a few people ask me after reading the article what exactly I meant by that, so I thought I’d write down the principals of what I consider “boring” investing.


The dullest investment related stock photo I could find

1. Tolerating potential risk

Talking to many people, one of the biggest concerns I keep hearing again and again is the worry of what they’ll do when the market crashes or one of their investments fails unexpectedly.

What do you do? Realize that there has been a mistake in your investment strategy because steady and “boring” investing should not cause crippling stress. There are generally two reasons for your investments to do badly – either (exceptionally) bad judgement calls when investing or an unprecedented market movement. If you’ve made a bad judgement call, then learn from it and don’t repeat it. If it’s a surprise situation on the market, then take comfort in the fact that everyone else is suffering though the same issues.

How do I know if I make good investment decisions? Experience. I’ve made some bad calls when investing as well, what matters is that you learn from them and don’t repeat them. Of course there is a chance that something might go wrong, but that’s something you have to find inner peace about – if you can’t then investing might not be for you. A boring investor sleeps reasonably well not matter what the market situation is like.

2. Reasonable time expenditure

At first investing seems like a pretty high effort-high time investment field. There are several reasons for this, among them lack of financial education and a relatively steep learning curve to many types of investments.

How to control your time usage? While it is tempting to try and read everything possible there is about the world of finance, then at times it might be reasonable to control yourself. How much of a real return do you really get from reading another 10 investment books? I definitely got more of a return from going to the RSÕ training course than I did from the past 5 finance books I read (similar time investment). A certain level of financial education is of course necessary but once you’ve reached a certain level of knowledge you should be aware of how you use your time. (I’ve by now admitted to myself that reading up on investing is more of a hobby by this point.)

Am I spending too much time on investing? There are several theoretical ‘rules’ about proper time spent vs. market returns. I’m currently thinking towards the following idea (due to the size of my portfolio, may be subject to change) – every 5000€ in your portfolio deserves 0,5-2 hours of monthly time. This of course depends on the type of investments – social lending might take less, real estate takes more (most investments take less time, the longer you own them). Take a moment to think though, if you’d be better off working an extra hour to get more starting capital as opposed to reading another book. A boring investor gets real returns on their time.

3. Good habits

Keeping good habits is easy when everything is going well. People who are trying to quit smoking find it easier during a low stress period in their lives and it’s easier to go for an early morning run during a sunny weather. The first problems with maintaining and building good habits come when things stop going so smoothly.

How to build and keep habits? One of the more difficult habits I’ve gotten into in terms of investing is starting the pay yourself first system. Transferring money into my investment accounts at the start of the month creates a certain level of uncertainty – what happens if something goes wrong during the month? Transferring money into our stock account is definitely less motivating when you see that the account is demonstrating significant red numbers. This is why above all your focus should be to keep rational, analytical and systematic. When you make decisions about investments or changing your habits ask yourself – why? why now? why not some other way?

What do I do when I’m slipping? Definitely do not spend time logging onto your brokerage account every day to check whether the market has gone up or down. If you’re starting to suspect that something is wrong with your investment plan then discuss it with a fellow investor, read what others are thinking or just take a day or two to think. A boring investor makes carefully considered decisions based on data and analysis, with a clear head.

The road to becoming a boring investor

There is no secret tip or trick here. It’s mostly discipline and refraining from knee-jerk reactions. Of course being a boring investor becomes easier as time goes on and you know more about the market but it’s completely possible when you’re just starting off.

While you should of course be wary of using past performances as indicators for future returns, then have some faith in historical returns provided by the market. Whether you put your belief in investment books, Bogleheads philosophy or follow MrMoneyMustache  or have some own investment theory of your own, the key is still consistency. Even if the market drops a terrible 30%, then as a boring investor you know that it’s time to get buying, learn all that you can from the experience and that you still have infinitely more investments left than people who haven’t invested at all.

My social lending portfolio (2014, 3rd Q)

The end of the year is drawing near (only 3 more months to go) and I’m starting to struggle with my investment goal for Bondora. I planned to increase my overall total investments to 4000€, but currently I’m at 2900€ (I’ve overcome last year’s invested amount though!). This means that the end of the year is definitely going to get interesting – I need to invest 1,1K to hit my goal. (1050€ if you take into account Moneyzen investments). Time to get cracking on some side projects it seems.

q3 pie

Overall I’ve managed to increase my portfolio surprisingly well. At the end of the month the account is pretty much dry, and I haven’t even invested into all that many B+ loans. Seems like the supply going up has worked out well for me.

q3 total investments


q3 returns


You can slowly start seeing the impact of me trying to add more money every month. The Bondora returns chart is hovering above 25% still, it’s been pretty much steady for more than half a year already. I hit a new high point for interest earned (62€ for the month of September), the following months should also bring relatively good growth due to increased monthly investments.

Overall in the past 3 months I have picked up a total of 72 new loan pieces. The breakdown is as follows:

– 71 Estonian loans, 1 Spanish loan

Out of those 71 Estonian loans:

– 9 B+ loans (unverified), 62 verified loans

The unverified loans are 2×600, 2×800, 2×900 & 3×1000 credit group

The verified loans break down as follows:

– 10xA1000, 11xB1000, 19xC1000

– 3xA900, 1xB900, 4xC900

– 2xA800, 2xB800, 1xC800

– 5xA700, 1xB700, 2xC700

– 1xC600

I quite like the B&C credit groups. There is very little competition and they give relatively good value as far as loans go. I could get into way more low level credit loans, but I’ve tried to keep it somewhat balanced. I open up the lower level portfolio builders occasionally to add on a few here and there, but overall I’m happy with how it’s going since I haven’t hit the point where I need to substantially rework my portfolio logic. I’m running on similar settings as before:


Platform diversification

I mentioned before that I decided to diversify a bit, so I’ve put 50€ into Moneyzen as well, building a pretty conservative portfolio. The 50 euros was invested (a bit slowly, but still) and the first payments will start coming in in the middle of October. That means that by the end of the next quarter I will have some info to share on that as well. I will probably add in another 50 euros at some point to get a better diversification level there as well.