Things I wish I had known when starting with social lending

Last night the Women’s Investment club met again and this time our topic was social lending. Since most of the people who came to the even didn’t have much (or any) experience with social lending, I had to really go back to the basics when preparing for the meetup.


How to start?

This was one of the most popular questions – how to get started in the technical sense (as in, how to make an account, how to make portfolio managers) but more so, how to start with the actual investing – which loans to pick and how.

1. I wish I had known to worry a lot less about credit groups and returs and other numbers back when I didn’t really understand how they worked. It’s super easy to get caught up in all sorts of Excel tables and graphs and analyzing your return numbers, but it’s just not all that useful when you lack fundamental knowledge about how the sector works.

2. I wish I had started both earlier and with bigger amounts of money. Even if I had made the same mistakes or more mistakes at start, I would still be enjoying far bigger compounded returns at this point. I spent way too much time paying attention to how my very small portfolio was doing as opposed to focusing on how to increase it.

3. I wish I had found people who shared similar interests way back when I was starting. It’s been pure chance that I stumbled onto other people who shared an interest in social lending, and I think we have all learned a lot from each other’s ideas and thoughts. In that sense all the women in our investment club are super lucky – there is a lot of knowledge on offer if you just ask.

What to do if you’re just now starting?

1. Make your first 1-5 small investments into Estonian loans and just follow their progress and assess your risk tolerance based on how nervous you get and how often you log on to check on your loans. (Spending time on reading up on theory will not give you any extra magical returns on these first investments.)

2. Focus on increasing your savings or your income to be able to invest more money monthly. With social lending every 5 euros saved will help! Once you have some money in your emergency fund then start planning for how much money you want to invest into social lending each month.

3. Read up on some of the wealth of knowledge that has been written about social lending in the past few years. Look at blogs that show real numbers so you can estimate what your portfolio will look like in the future. Don’t get too carried away with this – it isn’t worth reading 5 hours if you’re investing 100 euros.

4. Find an investing buddy! This is super important because having a friend with similar interests will both motivate you to keep going, you can share interesting bits of info and learn from each other’s mistakes. Going to different meetups to hear other people helps you keep track of what’s happening as well.

5. Focus on slowly increasing your portfolio while keeping in mind that your first priority is to diversify your portfolio to at least a few hundred loans. Get a feel how different risk levels work for you – it’s ok to make small investments into riskier loans if you want to try them out. Just keep in mind – the closer you keep to “boring” investment strategies, the more stable your returns.

Happy investing!


11 thoughts on “Things I wish I had known when starting with social lending

  1. Kristi, olen Sinu blogi usin jälgija ja Sa oled olnud mulle päris mitmes asjas eeskujuks! Sinu järgi hakkasin ma investeerima sotsiaalpangandusse ja plaanin ka natuke raha paigutada aktsiatesse. Varem ma ei kujutanud ettegi, et võiksin ise niisuguste asjadega tegelema hakata. Oled selle maailma ühele oma lugejale lihtsaks teinud.

    Aga kas Sa ei tahaks Eesti asjadest kirjutada eesti keeles? Sinu juttude mõju pääseks emakeeles palju paremini maksvusele, sest siis ei ole vaja seda kaks korda (autori ja lugeja poolt) läbi võõraste kanalite suunata. Tahaksin ka Sinu blogi soovitada paarile oma sõbrannale, kes muidu on agarad, aga inglise keelt natuke pelgavad. Ja pisike patriotism ka sinna juurde muidugi. :)

    1. Tere, Maria!
      Mul on väga hea meel lugeda, et oled leidnud julgust investeerimisega alustada! Just seda tahangi oma blogiga saavutada!
      Inglise keeles kirjutamine ei ole patriotismi puudusest vaid soovist veidi rohkem just eesti asja ajada – nimelt on hetkel blogi lugejatest umbes 30% mujalt riikidest kui Eestist ning neil on võimalik läbi minu blogi meie finantsmaailmast kuulda :)
      Oma sõbrannadele aga, kes eesti keeles parema meelega loevad, soovitan julgelt sotsiaalpangandusest Tauri blogi ( ja näiteks Taavi kirjutatavat blogi ( või Jaagu lugusid (
      Ja täiesti eesti keeles saab minuga suhelda naisteklubi üritustel ja FB grupis ning eks inglise keeles lugemine on ka võimalus ennast arendada :)

  2. Tere! Sooviks infot selle naiste investeerimisklubi kohta.
    P.S. mind ka kohutavalt häirib, et see blogi ingl. keeles. Üle ühe-kahe lause ei suuda ühestki postitusest lugeda. Kuigi olen lõpetanud inglise filoloogia eriala TÜ-s. Võib-olla on just selles põhjus. Eesti keeles huvitavatel teemadel lugeda on lihtsalt nauding. Teised blogid, millele viitad, on ju meeste kirjutatud. Ja nemad näevad maailma hoopis teistmoodi.
    Eesti keeles naise poolt kirjutatud raha- ja investeerimisteemalised kirjutised pakuksid huvi.

    1. Finantsteemadel blogimine on Kristi isiklikuks hobiks suunatuna inglise keelsele lugejaskonnale, siin ei ole kellelgi õigust nõuda eesti keelset kirjutamist. Pigem peaksime olema tänuväärsed, et Kristi üldse midagi kirjutab.

      Kuigi olen mees ja kirjutan eesti keeles, siis ma ei julgeks öelda, et minu mõttemaailm Kristi omast nii kardinaalselt erineb. Meie portfellid on enam-vähem sama suured ning suhtlen Kristiga pea igapäevaselt, mistõttu meie mõtete vahel ei saa olla nii suurt erinevust. Või siiski – Kristi on pigem suuremate visioonide ja tegudega kui mina, ta on nõus rohkem riskima.

      Anu, kui soovid eesti keeles kirjutatud raha- ja investeerimisteemalist blogi lugeda, siis on selleks kaks võimalust:
      a) hakkad ise kirjutama
      b) teed Kristile ettepaneku tasustatud blogi pidama – s.t. näiteks kuutasu eest on võimalik lugeda Kristi eestikeelset blogi.

      Blogimine on raske, sest lugejate soovid ja mõtted on äärmiselt erinevad, lisaks ei saa Kristi selle eest tasu, et ta panustab oma aega, tahtmist ja ressurssi blogi pidamisse. Võiksime olla rohkem tolereerivamad!

  3. Hi Kristi,

    I wondered if you know about alternatives to Bondora available to EU investors. In order not to put too many eggs on a single basket if you see what I mean. When I mention alternative, I mean P2P with the type of rates we can see on bonder (as indeed some western platform have much lower return)

    thanks a lot

    1. From what I know of other international platforms then nothing comes close to Bondora in terms of the actual return and interest rates. I’m assuming German or UK markets might be a bit more stable, but a significant cut in terms of returns would be taken.

  4. Generally good points but I disagree on the first one. I don’t think it is a good idea to start worrying about the fate of your first 1-5 investments, as this is far too small a number to make any conclusions. Whatever happens, you will draw false conclusions, as luck will play a great role here. For example, if all turn out to be good payers, it may make you believe that this is always the case (it is not!). Even worse is if any one of them default, which might put you off from investing altogether, considering that you’ll lose immediately 20-100% of the initial investment (which is not generally the case, if you avoid Spanish loans).
    Alternative suggestion for a beginner: decide how much you are prepared to risk for finding out how the system works, then split it to the smallest possible pieces and invest across the board in diverse borrower groups. E.g., if you have 200 EUR to play around, you can make 40 5-Euro investments. It will be a lot more representative and more fun to follow.

    1. While to some extent I agree that your interpretation is better for someone who has made a serious decision to start investing (has done risk analysis, formed a proper strategy, made long term goals), I feel that my suggestion is better for someone who knows nothing or is trying their first investment because of two reasons:
      Firstly, for people who are starting to invest, 200€ is not a trivial amount of money, for many people they’d have to save months to set that amount aside. (This means that 1-5 investments in the first month, and add more as you manage to save up money and get more comfortable tying your money up.)
      Secondly, I think that a small investment initially is necessary to test your risk tolerance – for some people their first investments will let them know that they really don’t manage the stress of social lending too well.
      If, however someone has a significant amount of money they don’t rely on (have an emergency fund + liquid resources) then I’d of course suggest starting by aggressively diversifying by 5€ pieces as well, but this isn’t the case for most complete beginners.

  5. I think that there’s almost 2 equally bad mistakes that beginners do:
    1. They log in every minute and check their investments all of the time and then panic when something goes overdue or get over-excited when a payment is made.
    2. They don’t even do a basic research into what loans should be avoided/what’s best to invest into.

    Of course, doing either one of these in the opposite extreme is usually also a bad mistake :)

  6. Naiste ja meeste investeerimisblogi jutujätkuks lihtsalt. Rahal ei ole sugu, need on nagu punktid, sa kas oskad nad oma kontole saada või siis oled harjunud neid ära andma ja mitte sellele mõtlema, et see on on vaid üks punktikogumismäng.

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