Investing and diversifying your portfolio in Greece/Europe (Part 1)
The current state of Europe with negative deposit rates, low inflation and high housing prices can leave a young person baffling on what to do with its money except from consuming it.
There are ways available for European citizens to invest even a small amount and get the satisfaction that your money are sitting idle in your bank account.
Let’s start from the basics :
1) Always keep an emergency fund, yes I know it sucks to have money generating no income apart from a 0,05% per year(This is real for all Greek banks, some European are already charging customers with more than 500k€ in their account ) . The emergency fund should be your total spending for the next 3-6 months, including any loan payments – debt . This means that if you get in a no income situation you have a breathing room for the next months to figure things out.
2) Next there are platforms that allow you to invest in loans issued by Loan originators across Europe and the world. I personally use Mintos.com. It offers buy back guarantee in most loans meaning that if a loan is delayed by more than 2 months the loan originator buys back the loan in full plus accrued interest. My investing strategy in Mintos is loans from European originators with buyback guarantee and 10%+ interest. This means mainly personal and car loans. I have been investing in Mintos for a little more than a year and the 10% has been pretty much consistent, compound interest starts becoming obvious very quickly. Problems can occur only in case of a loan originator paying late or defaulting. Personally only 1-2 loans from a specific originator were late. Of course you can diversify between originators. I will share my specific strategy in a later post. There are many more platforms like peerberry and fastinvest, that I have not tried as I don’t feel the need to diversify between platforms.
3) Revolut You may be wondering why a money app is third in my list, but Revolut has enabled US stock trading in their app. This means that you can exchange Euro to US Dollars and start trading. It allows fractional stocks and dividend payments. Keep in mind that EUR/USD exchange should be made Monday to Friday as Revolut offer worst rates during weekends, this is a tip also if you use it during traveling. So Revolut is offering 3 stock trades per month for the free tier,personally I feel it is enough for building up your stock portfolio. My strategy here is at the end of every month I exchange Euro to USD and load them on my investing account and split them between 3 stocks. Fractional shares let you buy exactly the percentage you need, for example you can buy 0.08 of Amazon or 0.5 Tesla stock for about 150$. In summary my future strategy here is buying stocks in new companies every month until I have at least 30-40 different stocks, after that I will continue increasing my position in them. I will share my stock research in a later post. With only 2 months of investing, as it just became available in Greece, my stock portfolio have increased in value by about 8-9% (at time of writing). I must have been lucky with my picks.
As this post is getting long enough I will split it up with a second part that will include cryptocurrency, equity crowdfunding, real estate crowdfunding and investment crowdfunding.
Here is a pie chart with the percentage that I have invested/saved by type.
And this is a pie chart with current value percentage after any gains or losses – writeoffs.
As you see my cryptocurrency percentage has fallen a lot as it is a real bear market for crypto. On the other hand Microloans A.K.A. Mintos and the US stock market is doing great thats why they are the first I included in my post.