Rube's journal

Where are you and where are you going?
Hankaroundtheworld
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Re: Rube's journal

Post by Hankaroundtheworld » Sun Jun 08, 2014 7:10 am

Hi, thanks for the idea; this Bondora sounds a bit too good to be true, who knows there is a Pyramid scheme behind it, and they pay well with fresh investor money coming in, till it explodes ...
I have tried to find how your money is kept; I mean what account and how well protected?
How about transferring money back to your Bank, how does that work?

henrik
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Joined: Fri Apr 13, 2012 5:58 pm
Location: EE

Re: Rube's journal

Post by henrik » Sun Jun 08, 2014 1:25 pm

Logically, any P2P lending platform will have characteristics of a pyramid scheme. Loans take a while before they default and then those that don't get recovered will take a while before they get charged off. This means that when the proportion of new investors is high, the overall default rate is correspondingly lower and the returns that much higher.

My returns (actual realised, XIRR, annualised) have hovered between 20 and 22%. I'm surprised by how stable it's been, but I have every expectation that as my portfolio and the whole platform becomes more mature, the returns will go down. I believe this also happened with LendingClub and other more popular ones as they grew and matured.

Hankaroundtheworld
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Re: Rube's journal

Post by Hankaroundtheworld » Sun Jun 08, 2014 1:46 pm

May be use some play-money of 5000 Euro, for the fun and try out, I am thinking of it

henrik
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Location: EE

Re: Rube's journal

Post by henrik » Sun Jun 08, 2014 1:53 pm

Maybe an admin could split the last few posts of this into a "European P2P lending" thread or something like that so we could keep track of options and how we're doing and not hijack rube's journal?

rube
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Re: Rube's journal

Post by rube » Sun Jun 08, 2014 3:04 pm

Henrik, NP. to keep these current posts here. I am interested in more details as well.

henrik
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Re: Rube's journal

Post by henrik » Mon Jun 09, 2014 4:02 am

Hankaroundtheworld wrote:I have tried to find how your money is kept; I mean what account and how well protected?
How about transferring money back to your Bank, how does that work?
Well, ideally your money is not kept anywhere, but invested in loans, i.e. used to pay for other people's stuff:) That said, the specific account I have used to transfer funds to Bondora is, if I read the IBAN format right, in the Estonian subsidiary of SEB. Of course they might have more accounts than that one, but I doubt that the bank is a high source of risk here.

As for transferring money, when you transfer funds to them, your bank account number gets associated with your Bondora account and thereafter funds can be transferred out only to that same account. I understand it's intended so that even if anyone gets access to your Bondora account, funds can still only be transferred out to you.

Personally, I consider P2P lending quite risky. Not so much because of loan default risk (there are various strategies to mitigate that from diversification to criteria screening etc), but because of the single point of failure that is the company operating the platform. Legally, even if the company goes bankrupt for whatever reason, you will still own your loans. But if you have diversified well enough (eg Bondora lets you invest even in 5€ notes), it will not be realistic to go after each of those small pieces on your own by way of debt collection agencies or courts.

rube
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Re: Rube's journal

Post by rube » Fri Jun 20, 2014 3:59 am

DW had an interview yesterday with a recruiter. Most likely she'll have next week 1st interview with the company. Priority is the work okay and atmosphere is better as current work. But if it all goes further she's likely able to make a nice jump in salary as there is a huge demand and low supply of her expertise. Fingers crossed.

rube
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Re: Rube's journal

Post by rube » Sun Jul 06, 2014 8:25 am

DW got interviewed 4 times now and expects an offer within a few days. Quite interesting how all went so far. Maybe I post more details later, maybe not (because of privacy).

Work and social life is keeping me and the family quite busy lately. I kept track of all financial details in June but will post the graphics and details later this month when I have some more time/energy, perhaps I combine them with July.

Currently preparing/packing my stuff for a business trip later this month to CA-USA. I will have some free time in the weekend to do some sight seeing. I Look forward to that.

rube
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Re: Rube's journal

Post by rube » Thu Aug 07, 2014 12:19 pm

I have not abandoned my journal at all, but it is just quite busy (work, social, holiday) and at some other times I just didn't want to do anything but relax.

DW received a lousy offer after 4 interviews. The headhunter made a big judgement mistake in the proces (he already thought his bonus was in the pocket). She obviously didn't accept it.

With the first few days gone in August we already spend half of our normal monthly expenses due to new glasses for dw and additional daycare for the kids during their school holiday periode. And we still have to leave for the final holiday...

No complains however on the financial side. I'll try to give a long(er) update next week when we have holiday, but no promises ;)

DutchGirl
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Re: Rube's journal

Post by DutchGirl » Fri Aug 08, 2014 1:27 am

Damn, that's too bad (the offer).

But enjoy your holiday!

rube
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Re: Rube's journal

Post by rube » Wed Aug 13, 2014 4:23 pm

Well, even with the substantial increase we were aiming for, our saving ration would "only" go up about 5% or so. It would be nice, but it would also mean more work, less flexibility with and more stress on the family. In the end, we don't mind really it didn't happen.

Re: holiday, yes I enjoy it. But work is still continuing unfortunately. I have worked at least still 2 hours each day beside the swimming pool and answering emails while walking etc. Lot of things are happening lately which are not good. Management is pushing everybody to go faster, make (more) money etc. and faults are the results. Faults which I have to deal with. It helps me only more to realize I want to become fully FI. I told my supervisor already clearly how I feel about it currently. My personality is such that I probably would have told him also without any FU money, but it is always nice to know the back-up :D. Anyway, I am on purpose not replying on all mails instantly or simply telling them I can't (which is true, because of little time/lousy internet connection/not carrying my laptop the whole time with me etc.). So he is realizing now a little bit more what I have to deal with. so far this rant and not any of my usual financial updates yet.

rube
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Re: Rube's journal

Post by rube » Sun Aug 24, 2014 2:31 pm

LONG DELAYED UPDATE JUNE - JULY (and a little of August)

NON FINANCIAL HIGHLIGHTS
June: Finished our new kitchen. Was able to stay well below 2K, even including a new (2nd hand) heater, additional insulation, plastering wall etc. Pretty happy with the result.

July: Went on a business-trip to LA. I had 2 weekends to myself and went 1 weekend to Death Valley. I really loved the extremes of it. The other weekend I went up north along the coast way and enjoyed the scenery.

As mentioned earlier, DW declined a job offer. It was really quite a stressful period with DW having 4(!) interviews, discussing details with me (even while me on the business trip) etc. It was quite a disappointment they came in with such a low offer and very inflexible hours etc. Especially the fixed hours required to be present surprised us. We're both used to be responsible for our work (=result) and are able to shift hours when we want (need) to. And this is very important for us, in case a child get sick, has a school performance, we need to run some errand etc. It really surprised me that this branch of a global – large company was really old-fashioned in this regard. I understand for certain jobs fixed hours is necessary, but certainly not for this job type. Anyway, we moved on.

August: My Job was stressful on some parts with some issues going on. I didn't liked it, well some was okay but not all. I wrote earlier about it. But I think I'll be able to handle and learn from it. The better part of August: went on holiday with the family and had a great time. Actually, will still have holiday for another 3 days.

These last three months went very fast, but I enjoyed many things.

Expectation September: I'll will probably be traveling for another 2 weeks for business, but I stay in Europe this time. Coming back from holiday, handling the ongoing issues at work and preparing for another 2 week traveling will be probably take a lot of my time and energy. Means, it will be end of September again soon.

FINANCIAL HIGHLIGHTS JUNE/JULY
Expenses: 2011 / 2886
Income 5323 / 5660 (165 / 52 Dividend; 311 / 0 Interest ; 33 / 179 sales)
Savings ratio 62% / 49% (average 12 months 63%)

Special expenses:
July: Private traveling during business trip and advance payment for holiday in August were around € 1000. I actually spend quite a lot (for my / ERE standards) on the weekends in California, but I think it was worth it. Btw, decided one night to sleep a few hours in the car and saved a few buck on a motel.

Income:
June: had to pay 600 tax (over 2013) which made our income lower then usual.

Graphics
Despite the usual unusual expenses / incomes etc. the net worth graphic is almost a stright (up going line). The same for the average savings ratio, always arounf 63-64% it seems.
Image

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GandK
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Re: Rube's journal

Post by GandK » Mon Aug 25, 2014 7:38 am

You guys are doing a great job maintaining your savings rate! I wish we were half that disciplined. :D

And I love the charts.

DutchGirl
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Re: Rube's journal

Post by DutchGirl » Mon Aug 25, 2014 8:26 am

Nice! You two are definitely getting closer every month - just a few more years, I think?

rube
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Re: Rube's journal

Post by rube » Mon Aug 25, 2014 1:01 pm

Thanks GandK, I can tell already that in August we will only be at a 30ish% savings rate, but that is okay as it is same as last year (holiday) and I expect it will be up again in the comming months. And to be honest, it really doesn't feel as a discipline I just really feel bad if I spend money unless it is something I really like (holiday) or simple need (groceries). Combine that with a pretty good income and this is the result.

@Dutchgirl: we spend on average 2350 per month. If I deduct childcare and commuting we're at about 2K a month, 24K a year. Based on the 30 year rule we need about 720K. We now have 340K. still needed 380K at a savings rate of about 50K now and hopefully (!) 60K on average for the comming years (compounding interest). Means a little over 6 years still to go...But we're almost halfway and only two years ago we we're on only one third. So it is going ok although..this is not including any increase of cost for the kids (university..?) and the fact that we would like to change our townhouse for a detached self-build energy plus house. This will probably ad another 3-4 years.
Combine that with the fact that dw wants to move preferable asap and I probably later (so money can grow first) and that 6-9 years is a long time to look into the future, we're further away from it as just a few years. But as said, for the basic ER version we're halfway and I am very gratefull to be able to say that while not being 40 yet.

DutchGirl
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Re: Rube's journal

Post by DutchGirl » Mon Aug 25, 2014 1:46 pm

Yeah, I figured it would still be a while. However, the first 100k is definitely harder and most often takes longer than the final 100k needed to get to the finish line.

By the way: as a fellow Dutch person: you probably also have a pension plan, or a retirement plan. Do you take that into account when calculating how much money you'll need? Personally I do, sort of: I assume that when I reach retirement age, my social security and my retirement money will be a nice supplement to the money I can take out of my non-retirement accounts. So I am aiming for a minimum amount to keep me going until retirement age (I guess 70 years) and I count on a bit of retirement money to help me pay for my golden years. I am guessing that it'll be easier for me to work for some extra income (if needed) when I'm 50 than when I'm 70+...

rube
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Re: Rube's journal

Post by rube » Mon Aug 25, 2014 2:43 pm

It is very much true, the last years NW is growing much faster as it was before.

Untill now, I have not included the retirement fund, simply because it can't be touched till 67-69 orso and it was only of a little value. However, the value is now close to 30 K, so it is getting more substantial and it is growing with a rate of around 7K a year. So I might add it in some FI scenarios in the future.

rube
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Re: Rube's journal

Post by rube » Sat Aug 30, 2014 3:23 am

Rereading my Journal

While doing this I noticed that some things happened and changed, but many things haven't. That's okay for many things, but these are not within my own values:
  1. the exercising (biking) I did for a very short while is completely out of the system. While I do think it is important to exercise and maintain your own body and do all you can to stay healthy, I have a hard time to apply this to myself.
  2. Related to the previous point: when I started this journal I stopped my snacking (mainly chips) at night habit for a couple of months. But it is completely back again. I want to change this again, maybe I only allow myself to do this on Friday - Saturday orso.
  3. I haven't read hardly any non-fiction (only finished "how I found freedom in an unfree world" during the holiday). Although I read a lot online, I want to read more real books.
So I need to start working (again) on these points.

Timeframe ERE
I have made several predictions in this journal when we would hit FI based on the expenses, savings % etc. but no real plan, no real date was included.
I think I will change this and will work on a date (age) and include this in my calculations (graphics) in the near future. It will help me to see the progress more clearly and any changes along the way to FI / ERE.

Family and FI/ERE
I guess DW didn't believe (realize) FI/ERE would be possible when I started telling her about it around 2 years ago. Perhaps also because she didn't understand the why (it is normal that people work till like 60 orso, right?). And she is still not as interested in it as I am, but she seems to see it is getting possibly.

She probably wouldn't spend a lot more on monthly basis when I wouldn't be around and I probably would not spend a lot less when she would not have been around. I guess we are both okay with that and don't need to "sacrifice" for each other. However, on our future housing situation I changed my mind gradually and don't want to spend on it as much as I earlier thought would be okay. I mean, I am still okay with a small increase but not to double it or more at this moment where as before I would have been okay with this. She didn't changed with me in this regard, so there were some different expectations between the two of us and we talked about during the holiday. It caused some disappointment but (I hope) also some understanding of the why: I prefer "freedom" above "improving" our housing situation now, and I am okay to defer this for a couple of years.

I guess it would be good for both of us, to make the "time-frame" as explained above and to discuss the details and expectations and review it together like every quarter or so.

DutchGirl
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Re: Rube's journal

Post by DutchGirl » Sat Aug 30, 2014 1:14 pm

I think indeed talking about this is important. You probably are slowly making your point / showing that it can actually be done... Perhaps together you can go from there and discuss what direction to take. And perhaps sometimes you need to compromise.

I like how my boyfriend is slowly getting used to having a bit of money. I have some money (almost 58k now!), but he does too, he has some investments for his retirement and he has some money in his business and also in his personal investments. He slowly understands that he can be out of a project for a few months and that that won't devestate his finances. As his stash keeps growing, maybe one day he also reaches financial independence and I can ask him how that feels :-)

PS. I'm also calculating the moment when both of our stashes combined can support one of us - at that point, if one of us loses their job or doesn't get a new project, we could still continue without trouble; that will be a nice moment, too.

PS2. Good luck getting back on track with the biking and with eating less snacks!

rube
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Re: Rube's journal

Post by rube » Sun Aug 31, 2014 3:48 pm

100% true, we discussed it some more today. It seems we're getting together again in expectations and the general direction and timeline. At the same time, we need to be able to adjust our selves without too much disappointment or "pain" if the situation around us will change, since a lot can happen in 5-10 years.

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