Hope you are doing great in this rather weird times we are living. Welcome to the somewhat intelligent investor, a blog tracking my steps to financial freedom while trying to keep healthy and sane (as much as it is possible at this stage). I've been following several other blogs so thought why not starting my own now with all the "free" time the pandemic has given us, right? So here I am, telling strangers about my finances and how I plan to be financially free/independent by the age of 40. In case you wonder, I'm not too far away from 40, so this goal is rather crazy nowadays, but what the heck!
What's this financial independence thing I am after?
It can be hard to define precisely what that means, so I'll give it a go with my own words and see what happens. In my mind financial independence or freedom means in a nutshell that you own your time and you decided what to do or not do with it. It doesn't mean you won't work anymore, although that might be the meaning for you,
You own your own time, and you decide what to do or not do with it.
For example if you ever decide your job doesn't satisfy you anymore, or you want to take longer vacations that the X number of week/days you are giving by your employer, or perhaps need a change of scenery and what to move somewhere else, whatever that may be, you can just say "Hey!, ya know wha? I own my time :), take a good look at this butt on its way outta here", well you can try being more politically correct if you feel like it.
How I started?
I tried to summarize this idea in the About section a bit more precisely so I'd suggest to have a look at it if you want more details. Here I'll just focus on what happened since 2020 (yes, that infamous year we will all ever remember as the pandemic year)
Back in early 2020 before the pandemic started, I decided for once and for all to start building passive income with the aim of, yes, eventually retire early in a beach drinking mojitos. At the time after some reading two very different options stuck in my mind, "Dividend investing" and "P2P lending". Dividend investing seemed like a very reasonable way to start investing in the stock market while getting some money in return here and there that I could use to mostly to reinvest and of course suffice my thirst of seeing progress. On the other side P2P lending was just this very obscure thing where you would transfer money to an online platform and lend it to other people somewhere in the world for very juicy interest rates, and just simply couldn't ignore!
My P2P experience
Yes, some people may say P2P lending is not a safe investment and let's face, it's true. Many of the platforms are not regulated yet and some of them don't even present financial statements to their customers, so it can feel sometimes like gambling. In fact, I've been victim myself of Grupeer's "lack of liquidity" and they still haven't given me back my roughly €400 and generated interests since March 2020 (that said, their most recent report here, although vague as F*** seem to be somewhat hopeful). Anyways, leaving the Grupeer incident aside, I must say the other platforms I've lending on have been showing very interesting return rates
Here are some referral links in case you decide to give it a shot to any of them:
To keep this first post finite, I decided to initially dump the most up to date details of my P2P portfolio in the P2P Portfolio so you can have a look at it whenever you want. That said, I'll be posting regular updates (I think monthly) about any changes on strategy or just news (good and the others), and I will try to keep that page with the current state somehow (unclear yet how).
My Dividends experience
Regarding my Dividend stocks journey, I started buying stocks when the market went hard down after the first news of lock downs back in March/April 2020. Since I was very very VERY new in the matter I was not able to recognize the HUGE opportunity that I had in front of me and just bought a few stocks here and there. Focused on a few things like, low debt, good history of dividend growth (dividend kings) and also picked up a few value plays like CCL (bought on April at 11.72 Usd!) and DAL (33 Usd in March and then more for 24 Usd in April) that had reached ridiculously low prices. I built a portfolio that would yield around 3% and have kept it that way since then, increasing some positions and also adding some new stocks to the mix.
I still vividly remember that first dividend entering my Degiro account back in May, those amazingly encouraging $3.12 that after taxes (15% :O) and currency exchange were chopped down to a still lovely €2.43.
You can see more details about my current portfolio here.
Overall passive income
The whole point of investing for me is to build extra sources of income and particularly passive ones. It's honestly a very slow but gratifying process :) and sometimes feels like walking barefoot "feels amazing but you need to be cautious of sharps stuff in the way". Here's a bar graph showing how my passive income has evolved since early 2020 when this all started.
Initially totally dominated by P2P interests, but now
slowly but steady the Dividends are taking over! This makes sense, for several reasons like, the stock portfolio despite having a lower yield is ~3.5x bigger than the P2P portfolio.
I find the above graph very encouraging, the income on March 2021 was literally 7x bigger than the one on March 2020 :) (I wish it was that simple to keep that momentum going :P). Of course this is a bald comparison, but it's still good to boost moral. In any case, the €65.25 of passive income generated last March is still half way my monthly passive income target of at least 5% of my expenses (roughly €130 euros).
And that's all for the first post, if for some crazy reason you managed to read all of this and still have some energy feel free to leave some feedback in the comment box!
Have a great week!
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