September 1, 2022

My Investments Update September 2022

Nick Investing reviews, events 4 Comments

Here is my latest monthly update about my investments. You can read my August 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below of performance last month shows, my main portfolio is currently valued at £20,344. Last month it stood at £20,407 so that is a modest fall of £73.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,091 compared with £3,108 a month ago, another modest fall of £17.

Here is a screen capture showing performance since January 2022. As you can see, I have topped up this account several times this year.

The falls are obviously disappointing, though August was a roller-coaster month and until about a week ago both portfolios were showing a good profit since the end of July. As I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments. And this year there has been no lack of volatility in world markets, caused by rising inflation, the war in Ukraine and the aftermath of the pandemic (among other things).

Even so, since I started investing with Nutmeg in 2016 – and despite everything that has happened this year – I have still made a total net return on capital of 42.12% (or 60.65% time-weighted) on my main portfolio.

I should say as well that I selected quite a high risk level for both my Nutmeg accounts (9/10 for the main one and 5/5 for Smart Alpha). This has served me well generally, but I’m sure investors who selected lower risk levels will have seen fewer ups and downs over the last few months. If you also have a Nutmeg portfolio and plan to withdraw from it soon, there is certainly a case for switching to a lower risk level now.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my experience over the last six years, they are certainly worth considering.

If you haven’t yet seen it, check out also my blog post in which I looked at the performance of Nutmeg fully managed portfolios at every risk level from 1 to 10 (as mentioned, my main port is level 9). I was actually pretty amazed by the difference the risk level you choose makes. If you are investing for the long term (and you almost certainly should be) opting for a hyper-cautious low-risk strategy may not be the smartest thing to do.

My Assetz Exchange investments continue to perform well. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated £70.81 in revenue from rental and £85.35 in capital growth, a total of £156.16. That’s a decent rate of return on my £1,000 investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile (as at the moment).

I now have investments in 23 different projects and all are performing as expected, generating rental income and in most cases showing a profit on capital as well. So I am very happy with how this investment has been doing. And it doesn’t hurt that most projects are socially beneficial as well.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They continue to do well, with new projects launching almost every day. I currently have around £2,500 invested with them in 14 different projects. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question. At present most of my Kuflink loans are performing to schedule, though two recently had their repayment dates put back by three months.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than £200 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now!

Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can now build your own IFISA, with most loans on the platform (including the one shown above) being IFISA-eligible.

My investment in European crowdlending platform Nibble continues to perform as advertised. My latest investment was in their Legal Strategy. These are loans that are in default and facing legal action. Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the money owed. The minimum investment is 10 euros and the minimum period is six months. I invested 100 euros for 12 months initially at a target annual interest rate of 12.5%.

The Legal Strategy comes with a deposit-back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per year. The actual yield depends on how successful recovery efforts prove, so in practice you may end up with a return of anywhere between 9% and 14.5%. All has gone to plan so far, but I will obviously continue to report on this in the months ahead.

You can read my updated review of Nibble here if you like. You can also sign up directly on the Nibble website [affiliate link].

As mentioned last time, I recently set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (about £412) copying an experienced eToro trader called Aukie. My investment initially dipped, but I am now about $21 in profit. In these turbulent times I am quite happy with that. But in any event I’m looking on this as a long-term investment so won’t be judging it yet. I am also considering a further investment with eToro, possibly in one of their themed portfolios. You can read my full in-depth review of eToro here.

Moving on, I had another article published on the always-excellent Mouthy Money website. This one is titled Earn a Sideline Income From Online Surveys. In this article I set out my five favourite survey sites for generating a sideline income. Surveys represent an easy, stress-free way to give your income a bit of a boost, which clearly we could all do with just now.

I had quite a busy month in August (one reason I haven’t updated the blog for a while!). In particular, I agreed to present a session for The Joy Club (an online social group for retired and semi-retired people) on the subject of budgeting in the cost of living crisis. This involved rather more work than I anticipated, as I had to prepare a PowerPoint presentation, resources list and accompanying 7000 word script. But it seemed to go down well and I enjoyed the questions and discussion at the end. I know PAS has acquired some extra readers and subscribers as a result of this event, so a very warm welcome if that includes you!

Also in August I enjoyed a break in Lavenham in Suffolk, said to be England’s best-preserved medieval village. My original reason for going was to see Darkside, my favourite Pink Floyd tribute band (see photo below). But I thought I’d make a holiday of it as well, so I ended up staying four nights.

Lavenham is a charming, picturesque place, with various interesting historical buildings you can visit. These include the early 16th century Guildhall and Little Hall, a former wool merchant’s house. I plan to write a post about my Lavenham trip soon.

Finally, I know a lot of people are extremely anxious about the cost-of-living crisis. As I said in my Joy Club presentation last week, though, it’s important not to panic. I recommend a three pronged-approach of maximizing your income, minimizing your expenditure, and budgeting carefully (using your resources as effectively as possible, in other words). Bear in mind, also, that various government support measures have already been announced to try to mitigate the worst effects of the crisis. And once a new PM is (finally!) in place, more will certainly follow.

In the meantime, please do check out some of the other posts on Pounds and Sense for additional advice and resources, especially in the Making Money and Saving Money categories.

That’s all for today. As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

If you enjoyed this post, please link to it on your own blog or social media:

August 2, 2022

My Investments Update – August 2022

Nick Investing, Everything Else events, reviews, property 4 Comments

Here is my latest monthly update about my investments. You can read my July 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below of performance last month shows, my main portfolio is currently valued at £20,407. Last month it stood at £19,357 so that is a (very welcome) rise of £1,050.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,108 compared with £2,942 a month ago, a rise of £166

Here is a screen capture showing performance since January 2022. As you may be able to see, I have topped up this account several times this year.

The rises in July are obviously encouraging. In particular, it is nice that my Smart Alpha portfolio (which I haven’t had as long) is worth more than I put into it once again!

Nonetheless, this month’s rises still don’t quite cancel out the falls of last month. And the total value of my Nutmeg portfoiio is still around 8% less than it was at the start of 2022.

As I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments. And this year there has been no lack of volatility in world markets, caused by rising inflation, the war in Ukraine and the aftermath of the pandemic (among other things).

Even so, since I started investing with Nutmeg in 2016 – and despite everything that has happened this year – I have still made a total net return on capital of 42.56% (or 61.15% time-weighted) on my main portfolio.

I should say as well that I selected quite a high risk level for both my Nutmeg accounts (9/10 for the main one and 5/5 for Smart Alpha). This has served me well generally, but I’m sure investors who selected lower risk levels will have seen smaller falls over the last few months. If you also have a Nutmeg portfolio and plan to withdraw from it soon, there may well be a case for switching to a lower risk level now.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my experience over the last six years, they are certainly worth considering.

If you haven’t yet seen it, check out also my blog post in which I looked at the performance of Nutmeg fully managed portfolios at every risk level from 1 to 10 (as mentioned, my main port is level 9). I was actually pretty amazed by the difference the risk level you choose makes. If you are investing for the long term (and you almost certainly should be) opting for a hyper-cautious low-risk strategy may not be the smartest thing to do.

I talked about the performance of my Assetz Exchange investment in my July update and also in this recent blog post about ethical investment options. I don’t therefore intend to provide an in-depth report about it on this occasion. I will just say that AE continues to provide steady returns for me, with a lot less ‘excitement’ than my equity-based investments. And as mentioned in my recent post, I like the fact that my money is being used ethically as well (e.g. to provide accommodation for people with learning difficulties or physical disabilities). You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They continue to do well, with new projects launching almost every day. I currently have around £2,200 invested with them in 14 different projects. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question. At present all my Kuflink loans are performing to schedule, though two are showing as ‘pending status update’, which may translate to a delay in repayment.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than £200 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now!

Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can now build your own IFISA, with most loans on the platform (including the one shown above) being IFISA-eligible.

My investment in European crowdlending platform Nibble continues to perform as advertised. My latest investment was in their Legal Strategy. These are loans that are in default and facing legal action. Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the money owed. The minimum investment is 10 euros and the minimum period is six months. I invested 100 euros for 12 months initially at a target annual interest rate of 12.5%.

The Legal Strategy comes with a deposit-back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per year. The actual yield depends on how successful recovery efforts prove, so in practice you may end up with a return of anywhere between 9% and 14.5%. All has gone to plan so far, but I will obviously continue to report on this in the months ahead.

I recently updated my original review of Nibble, which you can read here if you wish. You can also sign up directly on the Nibble website if you like [affiliate link].

As mentioned last time, I recently set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (about £412) copying an experienced eToro trader called Aukie. My investment initially dipped, but as the screen capture below (of the app page on my mobile phone) shows, I am now about $16 in profit. That’s an increase of over 3% in just over a month. Obviously if it continues to do as well as this, I shall be delighted 🙂

In any event I am looking on this as a long-term investment so won’t be judging it yet. I am also considering a further investment with eToro, possibly in one of their themed portfolios. You can read my full in-depth review of eToro here if you like.

Moving on, I had another article published on the always-excellent Mouthy Money website. This one is titled Is Car Leasing Right For You? I found this very interesting to research and it gave me food for thought about what I may do when the time comes to bid goodbye to my current vehicle.

Turning to non-financial matters. I hope you are enjoying the (mostly) fine summer weather and making the most of our greater freedoms as we (hopefully) leave the pandemic behind. I recently enjoyed a day out with my friend Jeff at the National Trust’s Snowshill Manor and Gardens in Gloucestershire (pictured in the cover photo).

It was my first visit and I found it a fascinating place. The manor was owned by Charles Wade, an eccentric ex-Army officer. He used it to house his extensive collection of objects of all kinds, from musical instruments to children’s toys, bicycles to Samurai armour (see my photo below). I will try to find time to write a proper review of my trip to Snowshill soon.

And on the subject of summer, can I also remind you about the collaborative Summer Giveaway I am sponsoring in association with other UK bloggers. It’s free to enter, and the lucky winner will receive not only an MSpa hot tub worth almost £1,000 but a range of other great prizes as well. The contest closes on 14 August 2022. Here’s a link to my blog post with details of how to enter.

That’s enough for today. As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

If you enjoyed this post, please link to it on your own blog or social media:

July 24, 2022

Three Ethical Investment Options For You to Consider

Nick Investing reviews 4 Comments

More and more people are looking to invest ethically nowadays. As well as wanting decent returns from their money, they wish to ensure it is being used for purposes that will benefit the planet and local communities too.

So today I thought I would spotlight three ethical investment opportunities of which I have some experience and/or knowledge. There is nothing particularly scientific about this and I am certainly not saying these are the ‘best’ such opportunities. But based on my personal experience and feedback from colleagues and PAS readers, I am happy that they merit the ‘ethical’ description and are well-established and reputable.

Nutmeg Socially Responsible Portfolios

Regular readers of PAS will know that I am a fan of the robo-adviser platform Nutmeg and have a fairly substantial ISA investment with them.

As you probably know, an ISA is a tax-free wrapper that can be used for a range of investments. Every year you get an annual ISA allowance, which is currently £20,000. If you exceed your annual allowance (or invest it elsewhere) you can still invest in an ordinary Nutmeg account, which will be subject to taxation as usual.

Socially Responsible is an option you can choose for your Nutmeg portfolio (or one of them – you can have several). Your money is then invested in a managed, diversified fund which focuses on the environment, social values and good governance (ESG for short).

Nutmeg invest in exchange traded funds (or ETFs) that avoid companies engaged in controversial activities, while focusing on those that lead their peers on ESG. The screen capture below, taken from the Nutmeg site, shows the sort of things that are covered under ESG criteria.

As with all Nutmeg accounts, you can set your preferred risk level on a scale of 1-10 (you might like to check out this article in which I reveal why choosing a very low risk level when investing for the long term may not be the best idea).

There are, of course, management and other fees to pay. For Socially Responsible portfolios these fees are slightly higher than the standard Fully Managed portfolios, but still moderate overall. Example costs for a £5,000 portfolio are shown below. On the Nutmeg website [affiliate link] you can enter any amount and see the likely fees you would be charged over a year.

You might wonder if choosing the Socially Responsible option means sacrificing performance, but Nutmeg say this is not the case. Since they started offering this option, performance has been roughly the same as their Fully Managed portfolios. Of course, the fact that charges are slightly higher means you may make a little less profit overall, but even so the difference should only be marginal.

For more information about Nutmeg, you may like to check out my in-depth review, which includes details of how my Fully Managed Nutmeg portfolio has performed since I opened it six years ago.

Assetz Exchange

Assetz Exchange is not an equities-based platform. Rather, it is a P2P property platform. I have been investing with Assetz Exchange since January last year and have gradually built up the amount I have with them (see below).

Assetz Exchange focuses on lower-risk properties, such as supported housing for people with learning difficulties or physical disabilities. Properties are bought jointly by investors under the usual crowdfunding/P2P model. Most are then leased to charities and housing associations. This means they are securely funded and there is a low risk of defaults.

Of course, defaults could still happen in certain circumstances – but as investors jointly own the property in question, ultimately you could still expect to get your capital (or most of it) back when the property is sold.

Although AE does also list some other types of property (e.g. show homes for new housing developments), you can of course choose which properties you wish to invest in. You could choose entirely charity/housing association projects – such as the one below – if you like.

I put an initial £100 into AE in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000. Since I opened my account, my AE portfolio has generated £65.52 in revenue from rental and £70.97 in net capital growth, a total of £136.49. That’s a decent rate of return on my £1,000 (staged) investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile (as at the moment).

I now have investments in 23 different projects and all are performing as expected, generating rental income and – in all but two cases – showing a profit on capital. So I am very happy with how this investment has been doing, and the fact that projects are generally beneficial to society as well.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as I am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Abundance

Abundance is a well-established investment platform (launched 2012) for green energy projects. Cards on the table, I haven’t invested directly through them myself, but I do have friends and colleagues who have done so with good results.

Abundance offers peer-to-peer lending for green infrastructure projects to help combat climate change. You can invest in projects operated by businesses and also projects run by local councils. Business projects tend to be riskier but offer higher potential returns.

When I checked just now, there were two council projects offering annual returns of around 2% and three business projects offering returns of up to 9%. An example of the latter is Carbon Plantations, a project to fund new sustainable hardwood trees that capture more carbon and help regenerate farmland. This project was offering a return of 8% a year over a ten-year period.

One thing which put me off Abundance in the past is that the investments are typically quite illiquid. You were locked into an investment of (typically) 5 to 10 years, with interest paid annually (or more often) but no way of getting your capital back until the end of the investment period. In common with other P2P platforms, however, they now have a secondary market where investments can be bought and sold by members. Of course, there is no guarantee that anyone else will want to buy your investment if you need to sell up early or what price you will get for it.

On the plus side, if you want your money to be used for green, ethical purposes, Abundance certainly ticks that box. I also like the fact that there is a low minimum investment of just £5. There are no hidden fees, and you can invest tax-free within an IFISA if you like. As with all investments, money is at risk, and I highly recommend diversifying across a range of platforms and projects.

For more information about Abundance, do check out their website [non-affiliate link].

Closing Thoughts

In this article I have set out three different ethical investment opportunities for your consideration. While there are never any guarantees, if investing ethically is a priority for you, in my view they are all worth checking out.

As I always say, I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

As always, if you have any comments or questions about this post, please do leave them below.

Note: Articles on Pounds and Sense may include affiliate links. If you click through these and make a purchase (or perform some other qualifying transaction) I may receive a fee for introducing you. This will not affect the price you pay or the terms you receive.

If you enjoyed this post, please link to it on your own blog or social media:

July 5, 2022

My Investments Update – July 2022

Nick Investing events, property 4 Comments

Here is my latest monthly update about my investments. You can read my June 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below of performance last month shows, my main portfolio is currently valued at £19,357. Last month it stood at £20,512 so, after another challenging month, that is a fall of £1,155.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £2,942 compared with £3,119 last month, a fall of £177

Here is a screen capture showing performance over the last month.

There is no denying these are disappointing results. Though as I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments. And over the last few months there’s been no lack of volatility in world markets, caused by rising inflation, the war in Ukraine and the aftermath of the pandemic (among other things).

It is, however, worth noting that since I started investing with Nutmeg in 2016, and despite everything that has happened this year, I have still made a total net return on capital of 28.79% (or 52.94% time-weighted).

While performance this year has clearly been disappointing, I have no doubt there will be an uptick at some stage, and am considering topping up now while asset values are low. I definitely don’t plan to sell up, as that would only crystallize my losses this year and leave me unable to take advantage when – as I fully expect – things turn around again.

I should also mention that I selected quite a high risk level for both my Nutmeg accounts (9/10 for the main one and 5/5 for Smart Alpha). This has served me well generally, but I’m sure investors who selected lower risk levels will have seen smaller falls over the last few months. If you also have a Nutmeg portfolio and plan to withdraw from it soon, there is certainly a good case for switching to a lower risk level now.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my experience over the last six years, they are certainly worth considering.

If you haven’t yet seen it, check out also my blog post in which I looked at the performance of Nutmeg fully managed portfolios at every risk level from 1 to 10 (as mentioned, my main port is level 9). I was actually pretty amazed by the difference the risk level you choose makes. If you are investing for the long term (and you almost certainly should be) opting for a hyper-cautious low-risk strategy may not be the smartest thing to do.

I talked about the performance of my Kuflink and Assetz Exchange investments in my June update and also in this recent blog post. I don’t therefore plan to provide in-depth reports about them on this occasion. I will just say that both are continuing to provide steady returns for me, with a lot less ‘excitement’ than my equity-based investments!

As I said a few weeks ago, in these turbulent times I believe P2P/crowdlending platforms such as the two mentioned are well worth considering. Not only are the rates of return higher than those on offer from banks and building societies, they are relatively unaffected by ups and downs in the stock markets. P2P loans aren’t a way of hedging your equity-based investments directly, but they do help spread the risk.

To be clear, nobody should put all their spare cash into Kuflink, Assetz Exchange or any other P2P/crowdlending platform, but in my view (and experience) they are certainly worth considering as part of a diversified portfolio.

My investment in European crowdlending platform Nibble (as mentioned last time) continues to perform as advertised. My latest investment was in their Legal Strategy. These are loans that are in default and facing legal action. Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the money owed. The minimum investment is 10 euros and the minimum period is six months. I invested 100 euros for 12 months initially at a target annual interest rate of 12.5%.

The Legal Strategy comes with a deposit-back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per year. The actual yield depends on how successful recovery efforts prove, so in practice you may end up with a return of anywhere between 9% and 14.5%. All has gone to plan so far, but I will obviously continue to report on this in the months ahead.

I recently updated my original review of Nibble, which you can read here if you wish. You can also sign up directly on the Nibble website if you like [affiliate link].

Also as mentioned last time, I also recently set up an account with investment and trading platform eToro, using their popular ‘copy trader’ facility. I chose to invest $500 (about £412) copying an experienced eToro trader called Aukie. As of today my investment has fallen to $473, which I guess in the current circumstances isn’t too bad. In any event I am looking on this as a long-term investment so obviously won’t be judging it yet. I am also considering a further investment with eToro, possibly in one of their themed portfolios.

Moving on, I had another article published on the always-excellent Mouthy Money website. This one is titled Starting Your Own Business With a Franchise. If you harbour an ambition to be your own boss, a franchise can be a great way of achieving this. My article sets out some hints and tips for choosing the right opportunity and making the most of it.

I also liked this recent article on Mouthy Money by my fellow blogger Shoestring Jane on The Best Places to Make Money From Your Old Clutter.

Finally, I enjoyed a short break in Criccieth, North Wales, at the end of June. I won’t go into detail about this here, as I plan to write a separate blog post about it soon [now published}. But I will say it was a very enjoyable, relaxing holiday, and I definitely hope to return there before too long. I stayed in a lovely sea-front apartment about five minutes’ walk from Criccieth Castle. Here is a photo taken from the castle showing the main beach…

That’s all for today. As always, if you have any comments or queries, feel free to leave them below. I am always delighted to hear from PAS readers 🙂

If you enjoyed this post, please link to it on your own blog or social media:

June 17, 2022

Is It Time for Investors to Look Again at P2P/Crowdlending Platforms?

Nick Investing events, property, crowdfunding 6 Comments

There isn’t much doubt this year has been a challenging one for stock market investors.

The war in Ukraine, rising inflation, and lingering fallout from the pandemic have all conspired to damage investor confidence. As a result, what we’re seeing now is a bear market, with share values falling across the board. How long this will continue I don’t know, though one thing I can say for certain is that there will be an upswing sooner or later.

I have witnessed this with my own equity investments and it hasn’t been pretty. My Nutmeg Stocks and Shares ISA has fallen by 11% in value since January 2022. My Bestinvest SIPP (personal pension) has fallen by a roughly similar amount (I’ve suspended withdrawals from it as a result, to avert the risk of pound-cost ravaging). I’m not panicking about this, as all equity investments have their ups and downs. And since I started both of these investments, I am still well up overall.

There is indeed an argument that now could be a good time to invest, while asset values are depressed. Nonetheless, I do of course understand why many people are wary of investing in stocks and shares at the moment, as markets may well have further to fall.

So today I thought I’d talk about an alternative approach that has fallen out of favour in the last year or two, but still has the potential to generate good returns for your money even when stock markets are in turmoil.

P2P/Crowdlending

I am, of course, talking about P2P/crowdlending. A few years ago these platforms were being touted as an exciting new alternative to banks, allowing individuals the opportunity to club together to buy property or lend to people/businesses. Investors could then benefit from interest paid, rentals received and/or capital gains made.

While initially everything went well, Covid in particular put a big spoke in the P2P sector’s wheel. More borrowers went into default, and platforms struggled to stay afloat as a result. Some (e.g. The House Crowd and Lendy) went bust. Others (e.g. Zopa and Ratesetter) decided to withdraw from P2P lending. Still others (e.g. Bricklane and Crowdlords) continue to operate but have closed to new investors and begun a process of winding down.

While that might sound depressingly negative, it’s not all doom and gloom. A number of P2P/crowdlending platforms are still running and indeed thriving. Three I have investments with myself are Kuflink, Assetz Exchange and Property Partner.

Interestingly, these are all property investment platforms. Kuflink offers secured loans to property developers, while the other two are more ‘conventional’ property crowdfunding platforms where investors jointly purchase a property and share pro rata in rental received and any capital gains on sales. P2P platforms that lend directly to individuals and businesses without the security of property are a lot scarcer nowadays than they used to be.

Regular PAS readers will know I have money in all three platforms mentioned above and am still actively investing in two of them (I am gradually winding down my Property Partner portfolio, though I do still recommend them). One big attraction of property platforms is that investment outcomes are not directly linked to the performance of stock markets. Yes, where the economy is rocky, this might ultimately impact on some commercial properties. Overall, though, these platforms are much less affected by market fluctuations than equity-based investments. That means they can offer an attractive alternative at times (like now) of high volatility.

In this article I’d like to highlight my two current favourite P2P/crowdlending platforms, Kuflink and Assetz Exchange. I will say a word about each and explain why I am still enthusiastic about them and continue to invest with them.

Kuflink

Kuflink offers opportunities to invest in loans secured against property. These loans are typically made to developers who require short- to medium-term bridging finance, e.g. to complete a major property renovation project, before refinancing with a commercial mortgage. They offer three types of investment, as follows:

Select-Invest (individual loans)
Auto-Invest
Tax-free IFISA (Innovative Finance ISA)

Auto Invest and IFISAs both automatically invest your money across a number of loans and pay a fixed interest rate, typically between 5 and 7%. You can choose a 1-year, 3-year or 5-year term, and interest is paid annually. The Auto-Invest product is basically the same as the IFISA, but without the tax-free wrapper. Self-Invest loans can also be put in an IFISA, with most (not all) loans on the platform being eligible.

I have been investing with Kuflink for nearly five years now. My experiences have been entirely positive and my investments have been generating the promised returns. I started cautiously with them, but have gradually built up the amount I have invested. Although – like all property P2P platforms – they were adversely affected by the pandemic, they appear to have come through it strongly, with new loans now being added almost daily.

There have been no defaults so far on any of my loans, and Kuflink say on their website that to date nobody has lost a penny on their platform. I have experienced short delays with loans being repaid, but in such cases you continue to earn interest, of course.

Although Kuflink don’t pay the highest rates in P2P lending, I think the returns on offer are realistic and sustainable. The steady expansion of the platform seems to testify to this, as does the fact that they have received several industry awards. .

Kuflink are also highly rated on the independent TrustPilot website, with an average 4.7 out of 5 (‘Excellent’). At the time of writing 80% of reviewers award them the maximum five-star rating, which is among the highest figures I have seen for a financial services platform.

As with all P2P lending, your money doesn’t enjoy the same level of protection as bank and building society accounts, which are covered (up to £85,000) by the Financial Services Compensation Scheme. Nonetheless, the rates of return on offer are significantly better than those from most financial institutions. And the fact that all loans are secured against bricks and mortar – and Kuflink themselves have cash invested in them – clearly offers some reassurance.

From my experience, Self-Select loans tend to fill up quickly. On the positive side, this shows investors have confidence in Kuflink and want to invest through the platform. On the minus side, it means there are typically no more than two or three new loans open for investment at any time.

You can read my full review of Kuflink in this blog post, or sign up directly here if you wish [affiliate link].

Assetz Exchange

Assetz Exchange is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated £59.49 in revenue from rental and £60.93 in net capital growth, a total of £120.42. That’s a decent rate of return on my £1,000 investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile (as at the moment).

I now have investments in 23 different projects and all are performing as expected, generating rental income and – in all but three cases – showing a profit on capital. So I am very happy with how this investment has been doing. And it doesn’t hurt that most projects are socially beneficial as well.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as I am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Final Thoughts

Clearly, no-one should put all their spare cash into Kuflink, Assetz Exchange or any other P2P/crowdlending platform. Nonetheless, in my view it’s certainly worth considering as part of a diversified portfolio. Not only are the rates of return higher than those currently on offer from banks and building societies, they are relatively unaffected by ups and downs in the stock markets. P2P loans aren’t a way of hedging your equity-based investments directly, but they definitely do help spread the risk.

If you have any comments or questions about this post, as always, please do leave them below.

Disclosure: I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing, and seek advice from a qualified financial adviser if in any doubt how best to proceed. All investing carries a risk of loss.

This post (and others on PAS) includes affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or any fees you may pay.

If you enjoyed this post, please link to it on your own blog or social media:

June 13, 2022

Spotlight: eToro Trading and Investment Platform

Nick Investing reviews 6 Comments

[Updated 4 January 2023] Today I’m looking at eToro, a popular online trading and investment platform. I recently opened an account on eToro and started investing with them, partly in order to review their service.

eToro is a Israeli fintech company based in Cyprus. The company also has registered offices in the UK, US and Australia. It is regulated and authorised by the Financial Conduct Authority (FCA) in the UK and is covered by the Financial Services Compensation Scheme (FSCS). That means if eToro were to go bust any deposits with them up to £85,000 would be protected. Of course, the FSCS doesn’t protect you if you lose money simply due to your investments performing poorly.

eToro is particularly known for its copy trading feature. This allows you to automatically copy any of various established traders on eToro and benefit from any profits they (hopefully) make. More about this later.

What Does eToro Offer?

eToro offers just one type of general trading account. Unlike other platforms such as Bestinvest, there is no option to set up UK tax-free accounts such as ISAs and SIPPs (Self-Invested Personal Pensions). That being said, there are still plenty of investment options available.

For starters, eToro lets you invest in over 2,000 different stocks and shares from the world’s leading exchanges including the UK and US. You can access major stocks, including Apple, Amazon, Google, Tesla, Barclays, Airbus, Microsoft and Adidas.

If you don’t want to pick and choose stocks yourself, you can also invest in ready-made, themed portfolios. Some examples include:

Diabetes Med – diabetes care stocks
MetaverseLife – invest in virtual worlds
Oil Worldwide – global oil industry
Utilities – public utility stocks
Renewable Energy – clean energy production
LatamEconomy – Latin American region

You can also trade over 50 different cryptocurrencies, including Bitcoin, Ethereum, Cardano, and so on (eToro creates a crypto wallet for you for trading purposes). You can also buy and sell various indices (e.g. UK100) and commodities.

And for advanced traders with an appetite for risk, contracts for difference (CFDs) are available. Just be aware that these investments are leveraged, so you can lose a lot more than your original stake if a market moves against you.

What Are The Charges?

A big selling point for eToro is that they offer commission-free trading. This makes them especially attractive to active traders who buy and sell regularly.

Of course, eToro do have to make their money somehow, so other charges apply. It’s important to be aware of these. The main charges are listed below.

Withdrawal fees – any time you make a withdrawal from eToro, you are charged a withdrawal fee of $5 (about £4).
Inactivity fees – If you haven’t logged into your account for a year, you will be charged a monthly inactivity fee. Of course, this won’t apply to most people but is something to bear in mind if you are investing for the long term.
Currency conversion fees – You can deposit on eToro in pounds sterling, but the platform operates in US dollars only and currency conversion fees apply. UPDATE: If you use the new eToro Money app, you can avoid fees for depositing to the platform, potentially saving up to £5 per £1,000.
There are also buy and sell spreads with some types of investment, e.g. cryptocurrency and CFDs.

None of this is to say you shouldn’t invest via eToro. Their offering is still extremely competitive, but you do need to take these charges into account.

Information and Advice

eToro is obviously aimed at people who are comfortable choosing their own investments.

As mentioned above, they have a range of ready-made, themed portfolios you can choose from. The minimum investment with these is $500 (around £420).

They also have plenty of educational resources about investing. Users can also learn from one another through the eToro newsfeed and other social features.

There is also in-depth information (and charts) about specific shares and other investments. One-to-one personal advice (free or paid-for) is not on offer, though.

Copy Trading

As mentioned above, copy trading is a very popular feature of eToro. This allows you to automatically copy the trades of an established eToro investor. An example is shown below…

As with smart portfolios, there is a minimum investment of $200 (about £170) for copy trading on eToro. However, many approved traders recommend a higher minimum than this. That’s because when you sign up to copy a trader, eToro automatically duplicates all of that person’s trades in proportion to the size of your investment. eToro has a minimum investment size of $1 and if a trade would work out less than that pro rata it will not be executed. It follows that traders whose strategies typically involve placing large numbers of relatively small trades generally recommend a higher minimum starting investment.

All approved traders who allow copying have a homepage on which they specify their recommended minimum investment. This can be anything from $200 to $1500 or more, depending on the strategy they use.

What Are the Pros and Cons of eToro?

Pros

Established platform with a large, international client base
Well-designed, user-friendly website and app
No dealing fees when buying or selling shares
No monthly or yearly portfolio fees
No deposit fees
Access to US and other world markets
Cryptocurrency trading and CFDs also available
Low minimum investment (just $10 or around £8)
Social trading features, including easy copying of top traders
Range of ready-made portfolios available
Plenty of research tools and information
Stop Loss and Take Profit features
Free $100,000 ‘virtual account’ lets you practise without risking any real money
Covered against collapse by the UK’s Financial Services Compensation Scheme (FSCS)

Cons

No UK tax-free accounts such as SIPPs and ISAs
Can’t invest in UK investment trusts and similar pooled investments
Trading on the platform is in US dollars only and currency conversion fees may apply (though not if you use the new eToro Money app)
Withdrawal fees and inactivity fees are also charged

What Do Users Think?

On the independent TrustPilot website, eToro has an average rating of 4.2 (‘Great’) at the time of writing, with 55% of users awarding them a maximum five stars rating.

Positive comments typically emphasize the simplicity and user-friendliness of the website, the low charges, the quality of the customer service, and the range of information available. The social trading aspects are also highly praised. Some of the negative comments concern customer service, and in particular issues experienced when trading Russian stocks due to sanctions imposed on Russia over the war in Ukraine. To be fair I am not sure to what extent eToro can be blamed for this.

eToro has also received various industry awards. These include:

ADVFN International Financial Awards Best Social Trading Platform 2019 Winner
ADVFN International Financial Awards Best Platform for Trading Cryptocurrencies 2019 Winner
Ultimate Fintech Awards 2021 – Best Stockbroker
Ultimate Fintech Awards 2021 – Best Copy Trading Platform
Ultimate Fintech Awards 2021 – Best Multi-Asset Trading Platform
World Finance foreign exchange award for best mobile trading platform and best software provider 2011 Winner
Star Awards Best Trading Platform 2013

Closing Thoughts

The commission-free share trading at eToro makes it an attractive option for people who wish to buy and sell shares regularly. Yes, they do have some other charges, but even so for regular traders it represents a great-value proposition.

The inability to open a tax-free ISA or SIPP is obviously disappointing for long-term investors, for whom a UK-based platform such as Bestinvest or Hargreaves Lansdown might be a better option. Nonetheless, eToro does offer a good range of medium- to long-term investment opportunities as well, including copy trading and Smart Portfolios.

It should also be said that profits made buying and selling shares and other assets such as cryptocurrencies are generally taxed in the UK as capital gains. Everyone has a substantial annual CGT allowance (£12,300 in 2022/23). So in practice the majority of UK residents who trade currently on eToro are unlikely to generate a tax liability. But with tax-free CGT allowances due to be substantially cut over the next couple of years, it may become more of an issue.

Smart Portfolios are an attractive option for novice investors and those who don’t have time to research all their investments themselves. As a prediabetic myself, I was quite tempted by their Diabetes Medicines portfolio, which I mentioned above. But equally, if you are happy to pick your own stocks and shares (and other asset types), eToro has all the information and tools you will need.

The social trading features of eToro are clearly a major attraction of the platform, particularly copy trading. But in addition you can chat with fellow investors and pick up tips and advice from them (though don’t take everything you read as gospel!). I also like the Stop Loss and Take Profit features, which allow you to automatically close losing positions before they deteriorate further or take a profit any time a pre-set target is achieved.

If you want to trade cryptocurrencies, eToro offers a simple, straightforward method for doing so. The risk of a platform collapse (as has happened with some crypto exchanges) is probably less, and UK investors also have protection in the form of the FSCS. The buy/sell spreads on eToro mean it may not be the most economical method for crypto trading, though. As I don’t personally touch cryptocurrencies due to the risks involved, I don’t intend to say any more than that. But the option is there if you want it (and many do!).

As for me, I recently started my journey on eToro by investing $500 on copy trading a member called Aukie2008 (real name Mike Moest). He has a good track record, over 1000 people copy him already, and he promises a relatively low-risk strategy. I was tempted to copy Nezatron (see screen capture above) but she has a higher minimum recommended investment of $700 and I wanted to start cautiously. I will let you know in future updates how my investment fares and any other investments I may make on the platform.

As always, if you have any comments or questions about this post, please do leave them below. I should also be very interested to hear from anyone else who has tried eToro. What markets are you investing in, and what results have you obtained? Are there any particular drawbacks or good points to the platform you would like to highlight? All comments are welcome!

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that this post includes affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered.

If you enjoyed this post, please link to it on your own blog or social media:

June 1, 2022

My Investments Update – June 2022

Nick Saving Money, Investing events, property, crowdfunding 8 Comments

Here is my latest monthly update about my investments. You can read my May 2022 Investments Update here if you like

I’ll begin as usual with my Nutmeg Stocks and Shares ISA. This is the largest investment I hold other than my Bestinvest SIPP (personal pension).

As the screenshot below of performance in the year to date shows, my main portfolio is currently valued at £20,512. Last month it stood at £20,799 so, after a roller-coaster month, that is a fall of £287.

Apart from my main portfolio, I also have a second, smaller pot using Nutmeg’s Smart Alpha option. This is now worth £3,119 compared with £3,166 last month, a fall of £47

Here is a screen capture showing performance this year.

Obviously the continuing falls are disappointing (though much smaller than last month). As I’ve noted previously on PAS, you do have to expect ups and downs with equity-based investments, and certainly over the last few months there has been no shortage of volatility in world markets. And it’s also worth noting that since I started investing with Nutmeg in 2016 I have still enjoyed a total return of 36.48% (or 62.07% time-weighted).

I should also mention that I selected quite a high risk level for both my Nutmeg accounts (9/10 for the main one and 5/5 for Smart Alpha). This has served me well generally, but I’m sure investors who selected lower risk levels will have seen smaller falls over the last two months.

If you also have a Nutmeg portfolio and plan to withdraw from it in the next few months, there is certainly a case for switching to a lower risk level right now.

You can read my full Nutmeg review here (including a special offer at the end for PAS readers). If you are looking for a home for your annual ISA allowance, based on my experience over the last six years, they are certainly worth considering.

If you haven’t yet seen it, check out also my blog post in which I looked at the performance of Nutmeg fully managed portfolios at every risk level from 1 to 10 (as mentioned, my main port is level 9). I was actually pretty amazed by the difference the risk level you choose makes. If you are investing for the long term (and you almost certainly should be) opting for a hyper-cautious low-risk strategy may not be the smartest thing to do.

Moving on, my Assetz Exchange investments continue to perform well. Regular readers will know that this is a P2P property investment platform focusing on lower-risk properties (e.g. sheltered housing). I put an initial £100 into this in mid-February 2021 and another £400 in April. In June 2021 I added another £500, bringing my total investment up to £1,000.

Since I opened my account, my AE portfolio has generated £57.24 in revenue from rental and £92.28 in capital growth, a total of £149.52. That’s a decent rate of return on my £1,000 investment and does illustrate the value of P2P property investment for diversifying your portfolio when equity markets are volatile (as at the moment).

I now have investments in 22 different projects and all are performing as expected, generating rental income and – in every case but one – showing a profit on capital. So I am very happy with how this investment has been doing. And it doesn’t hurt that most projects are socially beneficial as well.

To control risk with all my property crowdfunding investments nowadays, I invest relatively modest amounts in individual projects. This is a particular attraction of AE as far as i am concerned. You can actually invest from as little as 80p per property if you really want to proceed cautiously.

My investment on Assetz Exchange is in the form of an IFISA so there won’t be any tax to pay on profits, dividends or capital gains. I’ve been impressed by my experiences with Assetz Exchange and the returns generated so far, and intend to continue investing with them. You can read my full review of Assetz Exchange here. You can also sign up for an account on Assetz Exchange directly via this link [affiliate].

Another property platform I have investments with is Kuflink. They have been doing well recently, with new projects launching almost every day. I currently have over £2,150 invested with them, quite a large proportion of which comes from reinvested profits. To date I have never lost any money with Kuflink, though some loan terms have been extended once or twice. On the plus side, when this happens additional interest is paid for the period in question. At present all my Kuflink loans are performing to schedule, though one is showing as ‘pending a status update’. I suspect this may translate to a delay in repayment. We shall see.

My loans with Kuflink pay annual interest rates of 6 to 7.5 percent. These days I invest no more than around £150 per loan (and often less). That is not because of any issues with Kuflink but more to do with losses of larger amounts on other P2P property platforms in the past. My days of putting four-figure sums into any single property investment are behind me now!

Nowadays I mainly opt to reinvest the monthly repayments I receive from Kuflink, which has the effect of boosting the percentage rate of return on the projects in question

Obviously a possible drawback with Kuflink and similar platforms is that your money is tied up in bricks and mortar, so not as easily accessible as cash savings or even (to some extent) shares. They do, however, have a secondary market on which you can offer any loan part for sale (as long as the loan in question is performing and not in arrears). Clearly that does depend on someone else wanting to buy it, but my experience has been that any loan parts offered are typically snapped up very quickly. So if an urgent need arises, withdrawing your money (or part of it) is unlikely to be an issue.

You can read my full Kuflink review here. They offer a variety of investment options, including a tax-free IFISA paying up to 7% interest per year with built-in automatic diversification. Alternatively you can now build your own IFISA, with most loans on the platform (including the one shown above) being IFISA-eligible.

I also recently published a blog post about another P2P property investment platform called BLEND. Like Kuflink, they offer the opportunity to invest in secured loans to experienced property developers. They offer (on average) somewhat higher rates of return than Kuflink, though arguably with a little more risk. As well as my blog post about BLEND, you can also check out what they have to offer on their website [affiliate link].

As mentioned last time, I invested some more money in European crowdlending platform Nibble last month. On this occasion I invested in their Legal Strategy. The loans in question are in default and facing legal action. Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the money owed. The minimum investment is 10 euro and the minimum period is six months.

The Legal Strategy comes with a deposit-back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per annum. The actual yield will depend on how successful recovery efforts prove, so in practice you may end up with a return of anywhere between 9% and 14.5%. All is going well so far, but I will obviously continue to report on this in the months ahead.

I recently updated my original review of Nibble, which you can read here if you wish. You can also sign up directly on the Nibble website if you like [affiliate link].

One other thing I wanted to mention is that I have just opened an account with online share trading/investment platform eToro. I’ve been planning to do this for a while, with a view to reviewing it on PAS. I’m finding it quite different from other online investment platforms I have used such as Bestinvest.

As well as commission-free share trading, eToro offer a popular copy-trading feature, where you can copy the trades of other successful investors automatically. You can also practise with a virtual portfolio of $100,000. I put some of this into Platinum on the eToro commodities market and initially its value soared. But then it went right down again. So I am not the investment genius I thought I was at first 😀 It’s all very interesting, though. If you’d like to check out eToro for yourself, here’s an invitation link [affiliate]. And keep an eye open for my full review in due course.

Moving on, I have two more articles on the always-excellent Mouthy Money website. The first concerns Two Important State Benefits Many Older People Are Missing Out On. And the second is on the subject Could You Make Money as a Blogger? I have been blogging for over twenty years now, initially about freelance writing and now about personal finance. So I had plenty to talk about in this article!

Incidentally, Mouthy Money currently have a vacancy for a graduate-level personal finance reporter. This is a one-year paid internship working partly from home and partly from MM’s London office. If you know anyone who might be interested in this opportunity, please do draw it to their attention.

Finally, there has been a lot of talk about the cost of living crisis this month. As you may know, Chancellor Rishi Sunak announced a raft of measures to try to mitigate the worst effects of this.

Whatever your political or economic views, I do think he has been quite generous to older people in particular. Not only will those of us receiving the state pension get £400 off our household energy bills, we will also receive an extra £300 on top of our usual Winter Fuel Allowance (that means I’ll get £500 this year).

Many pensioners will also qualify for the £150 bonus for those on non-means-tested disability benefits such as Attendance Allowance. And they may also get the £650 cost of living payment going to anyone receiving various means-tested benefits (everyone getting pension credit will qualify for this, for example). Some households will receive a total of £1,500 in additional benefits through these measures, which should certainly help in these challenging times. .

If you would like to know more about the latest round of financial support from the government, Martin Lewis has a good summary on his Moneysaving Expert website. The government has also published a web page which sets out all the help that may be available for those on lower incomes.

That’s enough for today, so I’ll close by wishing you a very happy Jubilee Holiday. Whatever you are doing in the next few days – going away or staying home with family and friends – I do hope you have a relaxing and enjoyable time. As ever, if you have any comments or queries, please feel free to leave them below. I always love hearing from my readers 🙂

Disclaimer: I am not a qualified financial adviser and nothing in this blog post should be construed as personal financial advice. Everyone should do their own ‘due diligence’ before investing and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

Note also that posts may include affiliate links. If you click through and perform a qualifying transaction, I may receive a commission for introducing you. This will not affect the product or service you receive or the terms you are offered, but it does help support me in publishing PAS and paying my bills. Thank you!

If you enjoyed this post, please link to it on your own blog or social media:

May 18, 2022

Spotlight: How Are People In Britain Saving?

Nick Saving Money, Investing infographic 4 Comments

HSBC Bank (in association with pollsters YouGov) recently conducted a survey on saving in Britain. This looked at people’s savings habits and came up with some eye-opening results. I have summarized the main findings below, with graphics where relevant.

What Are the Most Popular Savings Options?

Unsurprisingly, the survey found that cash was Britain’s most popular saving option, with 53% of people saving this way. Other methods are also popular, however, as the graphic below shows.

The survey also found noticeable regional differences in savings habits. London appears to lead the way on cryptocurrency, with 6% of residents saving this way. People in the East of England are the most likely to invest in shares (23%), Scotland sees the most people investing in a pension (35%), and Wales has the highest proportion of investors in gold (4%) and antiques (4%).

Couples living together top the table for people trying to save (60%), ahead of those who have never married (57%) and those who are married or in civil partnerships (55%).

The survey data also suggests a gender divide, with men more likely than women (57% vs 53%) to say they are actively saving in general. Men are also more likely than women to be saving into a pension (35% vs 26%) and are nearly twice as likely to invest in shares (21% vs 12%). This is summed up in the graphic below.

Only just over half (55%) of the population say they are actively saving for the future, but the survey found younger age groups were more likely to be putting cash aside, with 62% of 18-34 year-olds saying they were regularly saving, compared with 55% of those aged 45-54.

And while there’s only a small difference between men and women when it comes to putting money away in cash (54% vs 52%), the data does suggest a wider divide when it comes to other types of investments. As mentioned above, more men than women (35% vs 26%) say they are saving into a pension. Men are also nearly twice as likely to invest in shares (21% vs 12%) and investment funds (12% vs 6%) – while six times more men than women say they have bought into cryptocurrencies.

My Thoughts

As a money blogger, it was interesting for me to see this snapshot of how people in Britain currently save for the future.

One thing that struck me was the relatively small number of people – and women especially – who invest in stocks and shares. Although this can be riskier in the short term, if you are saving for the medium- to long-term, history shows that you are likely to get better results investing in equities (probably via a collective vehicle such as a tracker or investment fund) rather than cash.

Right now, the best interest rate you can get on cash savings is about 1.5%. With inflation in the UK currently up to an eye-watering 9%, this means money kept in a savings account will be losing value in real terms.

Of course, we all need cash savings to fall back on when the unexpected happens (a popular rule of thumb here is three to six months’ worth of expenditure). And there may also be particular things you are saving up for, e.g. a deposit on a house. In that case, you may prefer to save into a cash account, so your money is protected under the Financial Services Compensation Scheme and readily available when the time comes.

But if you are saving for the (indefinite) future and/or retirement, over a period of years investing is very likely to produce better returns for you. To give you an example from my own experience, regular readers will know I have (currently) around £23,500 in the robo-investment platform Nutmeg. Since the start of this year, with the war in Ukraine and inflation fears, the value of my Nutmeg portfolio has fallen by 7.5%. In the six years I have been investing with Nutmeg, however, my portfolio has grown by 60% (time-weighted). Clearly in the last six years I wouldn’t have made anything like that if my money had been in a cash savings account.

Obviously with investing you have to expect ups and downs, which is why you should only invest on a medium- to long-term basis. But over a period of years, investments have almost always out-performed cash savings, often by a considerable margin.

So I do believe everyone should educate themselves about investing and perhaps take professional advice about it too. I would also like to see more taught about investing in schools. And if you have children (or grandchildren), I recommend introducing them to investing from an early age. A Junior ISA can be one very good way of doing this 🙂

One other observation is that the HSBC/YouGov survey makes no mention of crowdlending/peer-to-peer (P2P) saving/investing. This has admittedly lost some of its sheen in recent years, with projects failing and several platforms collapsing. Some people – me included – have lost money with this. However, I do still believe in the potential of investing this way, as long as you are sensible and diversify as much as possible to spread the risk.

Again, regular readers will know that I have modest amounts invested with the property crowdlending platform Kuflink and crowdfunding platform Assetz Exchange. Both of these have been doing well for me and generating returns of 6% or more. I also have a small amount in the European business crowdlending platform Nibble. Clearly this type of investment is riskier than bank savings, as your money is not protected by the FSCS. But returns can be significantly higher, and unlike equity-based investments they are not directly affected by the ups and downs of the stock markets. The latter can be reassuring when markets are volatile, as at present.

Finally, in case anyone is wondering, I am not a fan of cryptocurrencies and don’t therefore invest in them myself or write about them on PAS. As this recent article indicates, while you can certainly make money with crypto if you’re lucky, it’s also very possible to lose your shirt!

Thank you to my friends at HSBC for allowing me to use their survey results and infographics. They also have some tips here on how to save money and stick to your savings goals.

As ever, if you have any comments about this post and/or any of the survey findings mentioned above, please do share them in the comments as usual.

Disclaimer: I am not a qualified financial adviser and nothing in this post should be construed as individual financial advice. You should always do your own ‘due dligence’ before investing, and seek professional advice if in any doubt how best to proceed. All investing carries a risk of loss.

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May 12, 2022

Could You Be a Holiday Let Landlord?

Nick Making Money, Investing 3 Comments

Tourism in many parts of the UK is booming right now.

As we come out of the pandemic some people are venturing abroad again. But many others (perhaps deterred by the remaining restrictions and long queues and cancellations at airports) have been discovering (or rediscovering) what this country has to offer. This in turn has led to a growing demand for holiday rentals. That is only likely to increase as overseas visitors start to return as well.

There is undoubtedly money to be made from holiday lets, so in my post today I shall be looking at this subject in more detail. The article is written in association with my friends at the Suffolk Building Society and I shall be quoting from their detailed research on this subject (and using some of their graphics!).

Let’s start with the most crucial consideration for would-be holiday let landlords…

Setting

A recent study by the Suffolk Building Society found that the setting of a property was more important for potential landlords than other factors such as renovation potential or proximity to amenities. The key aspects for would-be landlords when considering buying a holiday let were:

A property that is in or near beautiful scenery (31%)
A property that is near the beach or coast (30%)
A property that is easy to manage and doesn’t require much upkeep (28%)
A property that is in an area that the landlord already personally knows or loves (27%)
A property that is in a popular tourist or holiday destination (23%)

This is summed up in the graphic below.

Location

As you can see in the graphic below, Devon and Cornwall were the locations most aspiring holiday let landlords were considering, followed by the Lake District, Peak District and Yorkshire Dales.

How Much Can You Make?

Being a holiday let landlord has many attractions, including significantly higher returns than are achievable from residential lets.

An apartment in a popular tourist area, for example, can generate £1,000 a week or more (in peak season at least). A recent report in Which? found that the average annual yield on a holiday let was just over 10%. This compares favourably with residential buy-to-lets, where around 7% a year is more typical. The Which? article mentioned above forecasts holiday let yields rising in future to 14% or more.

According to Sykes Holiday Cottages, the average holiday let owner is earning approximately £21,000 per year. You can also enjoy cheap holidays staying at the property yourself. And there are tax advantages too, as running a furnished holiday let (FHL) is considered a trade rather than an investment. This means you can offset mortgage interest costs against your income, as well as council tax and other bills.

On the downside, being a holiday let landlord is likely to be more hands-on. New tenants will move in every few days and the property will need to be cleaned, tidied and restocked on a regular basis. Covid precautions have added an extra dimension to this (though rules are now easing). There will be more admin dealing with a steady stream of enquiries and visitors. You will need to budget for advertising too, or risk ‘voids’ when your property is empty and you are losing rather than making money. And finally, any garden at the property will need tending as well.

You can of course outsource some (or all) of this work to a management agency, but naturally there will be a cost to this, impacting your bottom line

Tips for Would-be Holiday Let Landlords

If you are planning to buy a holiday let property with a mortgage (as most people do), there are some important things to bear in mind. Buying a holiday let differs in some significant ways from buying a home to live in or even a traditional buy-to-let.

Be aware that many holiday let mortgages require a landlord to have a mortgage, own their main residential property first, or have buy-to-let properties already – and in some instances, a combination of these.
Understand that some lenders also have age restrictions for first time landlords, even if they are already residential home owners.
Affordability assessments for holiday-let properties are usually calculated on the property’s rental potential rather than personal income and outgoings, but the lender will still want to understand the applicant’s financial position.
Applicants may have to demonstrate a minimum income set by the lender, but this income can often be from a combination of employment, self-employment, investments, pensions, and so on.
Be prepared to show third-party evidence of rental value in low, mid and high seasons from a verified lettings agent – even if not planning on using an agency to manage the property.
Expect that the property will also be assessed by the mortgage lender. Properties in holiday parks, caravans or lodges, and those of unusual construction method may not always be accepted.
Applicants should not assume they can market their property on short-term lettings sites such as Airbnb and Vrbo – some mortgage lenders have rules that prohibit this.
Check the amount of personal use allowed so as not to breach terms and conditions. Mortgage companies will always allow the owner a certain amount of personal use but this can vary.
Check whether the mortgage lender has a limit on the number of holiday let and/or buy to let properties that the landlord is allowed to own.
Specialist holiday letting insurance must be arranged with public liability cover (typically minimum £1 million) included.

Suffolk Building Society’s Head of Mortgages, Charlotte Grimshaw, says: ‘Before jumping on the [holiday let] bandwagon, potential owners should do their due diligence; consider the financial commitments of not just the purchase but the maintenance, taxes, and other expenses such as cleaners and gardeners. It’s also worth taking the time to understand the market, and check out the competition before falling in love with a property that isn’t viable in terms of lettings.’

And she adds: ‘Applying for a holiday let mortgage can be a little more complex than applying for a traditional residential property or buy to let, so it can be helpful to approach an independent mortgage adviser to ensure the application has the best chance of success. A mortgage adviser will also have a good understanding of the different criteria that mortgage companies request, helping landlords find the most suitable product.’

Final Thoughts

Thank you again to my friends at Suffolk Building Society for their help with this article. I hope it has opened your eyes to the money-making potential of holiday lets. And if you are among the 17% of UK adults who (according to the SBS survey) considered buying a holiday let property during the pandemic, I hope it has given you some points to think about.

SBS offer holiday let mortgages themselves (along with standard buy-to-let and other mortgages). You can read more about their holiday let mortgages here.

You might also enjoy reading my blog post Can You Still Make Money From Buy to Let? although this is more about letting residential property.

As always, if you have any comments or questions about this post, please do leave them below.

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May 6, 2022

Nibble Review – European Crowdlending Investment Platform Open To Everyone

Nick Making Money, Investing crowdfunding 7 Comments

UPDATED 27 May 2022

Regular readers of PAS will know I have a particular interest in P2P/crowdlending investment. Such platforms offer the opportunity to invest in loans to businesses or individuals and profit from the interest charged to borrowers.

With savings account interest rates still very low, many investors are understandably looking for better returns on their savings and investments. If that applies to you, European crowdlending platform Nibble is worth a look.

What is Nibble?

Nibble is a crowdlending platform launched in 2020 by IT Smart Finance, a company with over five years’ experience developing innovative products in financial technology.

Nibble’s business method involves investing in P2P loans to businesses made through Joymoney (the flagship product of the ITSF group). Private investors can then invest in these loans to take advantage of the interest paid by borrowers.

What Are the Benefits?

Probably the biggest attraction of Nibble to investors is that it offers returns on investment of up to 14.5%. As you will doubtless know, this is well above the average in the collective financing industry.

The minimum investment with Nibble is just €10 (about £8.40 at current exchange rates). The platform has an auto-investment tool, allowing trading to be fast and straightforward. You aren’t required to choose individual loan investments, as this is handled by the company. You simply choose one of three investment strategies (see below) based on the timescale over which you wish to invest and the level of risk you are comfortable with.

Other attractions include a minimum investment period of as little as one month, with interest credited to your account weekly. You can withdraw the interest if you wish or reinvest it in an existing or new portfolio.

In addition, if you want to withdraw money from your account early, Nibble say they will find a new investor for your portfolio for a small commission fee.

What Are the Risks?

Obviously no investment is without risk, but Nibble have gone to some lengths to keep this as low as possible. You can read a detailed article about this on this page of the Nibble website (warning: it is quite long!).

For investors opting for the lowest-risk Classic Strategy (see below) a Buyback Guarantee applies. That means that if a borrower defaults on payment, the company will return your money, including interest earned, for the time you held the loan.

For the other two, higher-paying strategies, the risk is shared between the investor and the platform in the form of a variable interest rate. The rate paid is decided by the Risk Committee, which meets monthly to assess how loan portfolios are performing and set rates accordingly. The actual rates paid therefore vary from month to month.

Obviously the other risk is that the lending company itself will go bust. For various reasons set out on the Nibble website this appears unlikely, but of course it is not impossible. If that were to happen, you would not be covered by the Financial Services Compensation Scheme (FSCS) which covers deposits in registered UK savings institutions up to £85,000. Nibble say that in the worst case scenario ‘a management company will be assigned to help the investor to recover funds in accordance with the rights of claim against the borrower. In addition, there is always a reserve fund which serves as an additional “safety airbag” for the investor.’

Finally, as loans are currently all in euro, UK investors will of course have to contend with exchange rate fluctuations, which could work for or against you.

How Do You Get Started?

If you wish to invest via Nibble, the first thing you will need to do is set up an account via the Nibble website.

As Nibble is a European operation, you will need to invest in euro and your returns will be paid in this currency. That obviously adds a layer of extra complexity for UK citizens, but there are various ways round this. If you have a UK bank account you will normally be able to make (and receive) payments in euro, but may be charged a NSTF (Non-Sterling Transaction Fee).

You could use your own bank to fund your account initially, but if you become a regular investor with Nibble you might want to use a service or account that charges lower fees. You could use a money transfer service such as Paysera or Wise (formally TransferWise). These will enable you to transfer funds between Nibble and your own bank account with lower charges (and potentially a more favourable exchange rate). Another option would be to open a Euro account with a provider such as Starling. This will allow you to receive and make payments in both sterling and euro, again at a lower overall cost.

Nibble offers investors a choice of three investment strategies according to income and risk preferences. They call this approach Flexible Investment. The three strategies are called Classic, Balanced and Legal. They differ in the level of income on offer, the degree of risk, and how those risks are distributed between the platform and the user. Each strategy is described below using screen captures from the Nibble website.

Classic Strategy

As you can see, this strategy offers the lowest level of risk and also the lowest rate of return (though still a respectable 8% at time of writing and up to 9.7% if you reinvest every time your investment matures). You can start with as little as 10 euro for a minimum period of just one month, so this may be a good way to test the water initially. Be aware that the minimum withdrawal is 50 euro though.

An important thing to note here is the BuyBack Guarantee. As mentioned above, this means that if a borrower defaults on their payment, the company will return your money, including interest earned, for the time you held the loan. That significantly reduces the risk of investing.

Balanced Strategy

As you will see, the Balanced Strategy offers higher potential returns than the Classic Strategy but without the safety net of the Buyback Guarantee. The minimum investment amount is 100 euro and the minimum period seven months. According to Nibble this is the most popular strategy among investors, with almost 2/3 opting for it.

Legal Strategy

The Legal Strategy offers the highest potential returns. The loans in question are in default and facing legal action (hence the name). Nibble buy these loans at a heavily discounted rate and then seek to recover as much as possible of the amount owed. The minimum investment amount is 10 euro and the minimum period is six months.

As you can see, the Legal Strategy comes with a deposit back guarantee. This is a guarantee to return the full investment amount at the end of the investment period and a minimum yield of 9% per annum. The actual yield paid will depend on how successful recovery efforts prove, so you may end up with a return of anywhere between 9% and 14.5%.

According to Nibble 13% of their investors choose this strategy, which is a fairly new one.

My Experience

I wanted to try out Nibble myself,so I set up an account with them. The process was quick and straightforward. You just click on Create Account at the top of the Nibble homepage and follow the online instructions.

You are required to complete a short verification process before opening your account. This involves taking a photo of your passport, driving licence or some other form of ID, along with a selfie. You may use your mobile phone camera for this. It all worked smoothly and seamlessly in my case, and within a couple of minutes my application had been verified and approved.

After that, it is just a matter of making your initial deposit and deciding which of the strategies mentioned above you want to use. I chose the Classic Strategy as a low-risk test and so far everything has gone as promised. Interest is credited to my account every week, and so far at the end of each investment period I have reinvested all the capital and interest received.

I plan to try out the new Legal Strategy myself and will report in due course how this goes.

Closing Thoughts

If you are looking for a more exciting home for some of your cash that allows you to take advantage of the higher interest rates on offer in Spain (and other countries soon), Nibble is worth checking out.

I like the low minimum investment for the Classic Strategy and the fact that the minimum loan period for this is just a month. That allows you to try out the platform without risking too much or tying up your funds for too long. The BuyBack Guarantee provides additional reassurance. The other strategies offer higher rates of interest, though it is important to note the longer investment periods and the fact that rates paid may vary from month to month.

The website’s ease of use is another attraction, as is the fact that Nibble doesn’t impose any fees or charges on investors. As mentioned above, you do just need to bear in mind the need to switch between pounds and euro and the importance of minimizing the costs associated with this.

As a Spanish-based company NIbble doesn’t have too many UK reviews, but those that I have seen are almost entirely positive. On the popular independent Trustpilot website, they get an average score of 4.2 (‘Great’) with 75% of reviewers awarding them a maximum five star rating.

My advice if you want to try Nibble would be to start by investing modestly using the Classic Strategy (as I have). This will allow you to see how the platform works and get your capital returned with interest in as little as 30 days. You can then move on to the other investment options (Balanced and Legal) for bigger potential returns if you wish.

I have just made a small additional investment in the Nibble Legal Strategy, so will be saying more about this soon.

Obviously, nobody should put all their money into Nibble, but it is worth considering within a diversified savings and investments portfolio, especially in the current low-interest savings environment. As stated above, you should also bear in mind that your money won’t be protected by the Financial Services Compensation Scheme (FSCS), which protects deposits of up to £85,000 in most UK bank accounts. Of course, P2P/crowdlending platforms in the UK are not generally covered by the FSCS either.

I will, of course, continue to report on Pounds and Sense how my Nibble investments fare.

As always, if you have any comments or questions about this post, please do leave them below.

Note: This is a fully updated version of my original Nibble review from 2021.

Disclaimer: I am not a qualified independent financial adviser and nothing in this post should be construed as personal financial advice. You should always do your own ‘due diligence’ before investing and seek professional advice if unsure how best to proceed. All investing carries a risk of loss. Note also that this review includes my affiliate (referral) links, so if you click through and end up investing with Nibble, I may receive a commission for introducing you. This will not affect the price you pay or the product/service you receive.

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