When searching for articles about investment and making money, you will surely come across many bloggers who publish their monthly income reports or also post net worth reports.

I would recommend that you don’t pay too much attention to those numbers. I personally don’t care much about them.

While I’m not saying that they’re lying or manipulating their numbers in order to persuade people to do what they are saying and obtain the same results, I think that business and investing involves a plethora of decisions that are extremely based on each individual’s character and aptitudes.

Consider a few things:

• They might not include the value of their homes in their net worth.
• You don’t know if they received large inheritances or have considerable family wealth to fall upon.
• They might be manipulating their figures.
• Many are posting anonymously, so we don’t know anything about them really.

There are many other considerations I could come up with, but this is a quick post that I want to get out there.

There are now a ton of blogs about investing and personal finance in Europe, and many of them shouldn’t be trusted as a source of advice for your investment journey. Most of them are just distractions from the real research you should be doing.

You want to learn about the type of investment you want to enter by getting to know the industry very very well and then trying things out bit by bit until you get a sense of whether it is a good fit for you.

As we’ve seen in previous decades with other related niches, much of personal finance and investment bloggers income comes from affiliate commissions from the platforms they recommend and not from the actual investments they make. That doesn’t make sense in my opinion.

There is no point listening to someone whose investments are making him a couple hundred euro a month at max, because he would definitely not have enough experience to be considered a reliable source of knowledge.

Be realistic; why would anybody go to such great lengths to share their financial journey just to help you make more money for yoursel? Most are trying to sell you something. Very few genuinely like to write about their journeys in different areas of life just because it makes them feel better or it helps them clear their minds. Try to find those kinds of people as they are a much better source of information.

Typically I try to look for the following traits in the bloggers I follow:

• They write about several topics coherently for many years.
• They don’t hide behind the veil of anonymity.
• They are verifiably successful in their careers.
• They speak about both the good and bad experiences.

That’s my little rant for today. I hope it helps you focus on the right information, as one of the biggest barriers separating you from genuine wealth and success is the overload of information you can find on social media and the web nowadays.

I’ll also say that if someone publishes their income or net worth reports it doesn’t mean I won’t follow their blog, but it won’t be my reason for doing so, and it certainly won’t be the reason why I decide to invest in something or not.

On the other hand, I consider journaling in a private or public fashion to be very helpful to keep track of your thoughts and decisions over time. I have also been thinking of starting to publicise my monthly thoughts on my portfolio’s performance, without focusing too much on the numbers. What is really important in these monthly reports is to observe the decision making criteria of the investors, and get some insider tips on how each platform is doing.

Be very choosy in what you read and whom you trust. Always try out things yourself in small doses before you go all in. Diversify and keep expanding your knowledge everyday.

Do you agree with my point of view? Let me know in the comments section.

In Spain, there are thousands of properties that have been seized by the bank due to the bankruptcy of the developers or other problems that have led to loan payments to the bank being jeopardized. Most of these repossessions happened during the crisis of 2008 when the housing bubble burst.

Most of the foreclosed properties can be found in these regions:

1. Andalucía
2. Valencia (Costa Blanca area)
3. Catalonia
4. Madrid

After some time passes, sometimes years, the properties are put on the market and sold via an auction. Every person or company can take part in these provided they have a NIE and a digital certificate.

Through these auctions, you can get your hands on a property, for example, an apartment or even a garage, at a significant discount over the market price. Many of these properties have no problems so they represent a potentially great deal.

I only got to know about these auctions when my neighbors told me that some apartments and parking spots in our building were being auctioned off due to the original developers of the apartment block having gone bankrupt several years before.

I decided to participate in the auction by bidding on a few parking spots, mostly to learn about how things work and see what kind of a discount one could obtain.

In the end, it was quite an exciting experience. When you make a bid, you need to send over a percentage of the total value of the item you’re bidding on via a bank transfer. Then you make your bid which must be higher than everyone else’s. You will then receive notifications whenever your bid is superseded.

Each auction has a set closing time, but that doesn’t mean things end there. Basically, whenever there is a new bid, the auction end time is extended by an hour, and in this particular case two of the items I bid on were dragged on for another 12 hours, and that included the night as the auction originally ended at 6pm. Clearly there were some motivated bidders who stayed up all night in order to get the parking spot.

When bidding, you also have the option of keeping your bid in queue once the auction closes. This means that if you’re the second-highest bidder and the highest bidder fails to pay within 20 days, you become the winner of the auction and it would be your turn to pay up. The process continues until a paying bidder is found. Note that the bidder who doesn’t pay loses his deposit.

Of course, what you all want to know is what discounts can be obtained when you make these bids. So here are the results from the parking spaces I bid on.

Parking spot 1

• Value: €20,334
• Winning bid: €16,967 (20% discount)

Parking spot 2

• Value: €21,103
• Winning bid: €14,751 (30% discount)

Parking spot 3

• Value: €17,649
• Winning bid: €17,424

So some pretty nice discounts to be had there, 20-30% is great. On the other hand the other parking was sold at its value, although having seen the spots beforehand I couldn’t understand why the value was lower in the first place, as it was just as good as the other two.

In terms of hard cash, there were some even better savings for those who bid on the apartments in our building.

Apartment 1

• Value: €621,615
• Winning bid: €468,807

Apartment 2

• Value: €652,315
• Winning bid: €490,517

So the apartments were sold at a 25% discount on their assessed value. Not bad at all.

There are some disadvantages to bidding in these auctions too that you should know about:

1. You need to put down a deposit in order to bid on any auction. If you want to bid on several parking spots, for example, you will need to put down a deposit for each of them.
2. If you win an auction, you need to pay up the remaining amount within 20 days. In the case of buying apartments, this can mean hundreds of thousands of euros, which not many people have casually lying around in their bank accounts ready to invest. It’s almost impossible to get a loan in such a short time too, so you really need to have the liquidity before going into such auctions. If you fail to pay up within the stipulated time, you lose your deposit.
3. Sometimes you might not be able to see the apartment being auctioned off, which makes it a very risky thing to bid. Some apartments might even be occupied.

Have you tried getting a great deal through a Spanish auction? Let me know what your experience was like.

NoviCap is a fintech company that operates a tech-driven, customer-centric invoice finance platform, which enables institutional investors to make attractive returns by investing in verified invoices sold by Spanish and Dutch SMEs.

Through NoviCap, SMEs can access working capital and improve their cash flow in a fast and flexible way thanks to the platform’s intuitive front end, automated onboarding, and ability to make real-time credit decisions.

NoviCap was founded with the help of Barclays Bank in 2014 and has become the leading invoice finance platform in EU backed by venture capitalists including ACE & Company, Partech Ventures and Techstars.

If you’ve got high liquidity and you’re looking for a relatively safe investment, NoviCap may be the solution you are looking for.

It’s quite a unique platform that offers good returns of 5-7% with low risk.

What is Marketplace Lending & Quality of the origination

Marketplace Lending (MPL) is the practice of connecting borrowers and lenders through an online platform.

Invoice finance, also called factoring or receivables finance, is an attractive form of MPL because SMEs (borrowers) are able to finance their outstanding invoices while investors (lenders) benefit from having access to short-dated invoices due by creditworthy debtors.

NoviCap focuses on debtors that are either investment grade corporates or public entities, thus ensuring a greater quality of the trade receivables originated and purchased by investors.

As a consequence, this translates for investors on the platform into superior risk-adjusted returns, which are non-volatile and uncorrelated with other asset classes.

Why Invest in NoviCap

There are plenty of good reasons to invest in NoviCap if you’ve got enough capital to join the platform.

And here comes the potential deal breaker. In order to join as an investor, the minimum capital contribution is €159,000. This is out of reach for most private investors, but I think it’s ideal for companies that are doing well with their main line of business and are looking for a way to avoid having their money sitting idle in a bank account.

So let’s take a look at the benefits:

Short-term

• Invest in short-dated invoices (avg. of 60 days)
• No lock-ups mean high liquidity and control

Compelling returns and diversification

• Attractive, stable returns can be achieved at low risk and very low volatility
• Transparent, fixed price trading – know the return on every invoice
• Self-liquidating asset allows passive trading and compounds interest over time
• Invoices are syndicated among multiple investors
• Diversify your investment over 1,000s of Invoices

Secure

• Investor funds are held on segregated client money (trust) accounts at Barclays Bank Every transaction is a true sale of the invoice with payment collected directly from the debtor
• Efficient and detailed reporting and full visibility over underwriting performance.
• Investor’s identity is never disclosed to SMEs

NoviCap’s Track Record

NoviCap has a very good track record in its first 5 years of business:

• Invoice book target yield: 4-6% / year
• Completed transactions: ~20,000 (€100mn)
• Average duration: 60 days
• Aggregate default rate: <50bps

Typical SME Profile

• Has creditworthy, recurring customers (debtors)
• Is a B2B company, typically in retail, manufacturing or service industry
• Is a limited liability company incorporated in EU Is facing long payment terms, avg. 60 days

How to join NoviCap

It bears reminding that the minimum capital contribution is €159,000. As I said earlier, NoviCap is for those individuals or companies that have significant money to invest and definitely not for beginners.

If you’re just starting out with investing in loans, I would recommend you take a look at Mintos and other European P2P lending platforms.

There are two ways you can join NoviCap.

1. Direct deposit on the platform
2. NoviCap dedicated RAIF Fund

If you choose the direct deposit method, you can set up an auto-invest system with your preferred parameters that will automatically invest your money in invoices as they become available on the platform.

In the case of the fund, it functions like a traditional mutual fund with a cost of less than 1% per annum. Its target return is 5% and you get an annual dividend distribution based on the returns of the invoices that the funds invests in.

Both options are good, although due to having existing experience with other P2P lending platforms that use Autoinvest systems, I prefer putting the direct deposit method. That way I can also put money in and take money out of the platform as needed depending on my needs at the moment.

Join NoviCap

On this P2P lending glossary page you’ll find all the important terms you’ll encounter as an investor in P2P lending platforms around the world, with Mintos being my favorite platform. If there are any other terms I missed out on, let me know and I’ll add them in.

AML – Anti-Money Laundering. It refers to a number of policies that governments, banks, and financial institutions have to abide by. They are obligated to proactively monitor clients and new customers so corruption and money laundry can be prevented. They also have to report any kind of financial crime. When you as an investor are asked to supply picture id, address id and documentation on where the funds you are investing are coming from by e.g. supplying bank statements and copies of your paychecks, this is part of the AML procedures. 

Auto Invest – a tool for automated purchases of Claims on the Platform, functioning according to the User’s selected settings and used by the User to purchase Claims on his/her own behalf in accordance with the selected settings.

Borrower – a natural person or legal entity, wherewith the Loan Originator has concluded a Loan Agreement

Buyback Guarantee – a buyback guarantee is a guarantee usually issued by the loan originator to the investor for a particular loan, that confirms the loan originator will repurchase the loan from the investor if that particular loan is delayed by more than a particular number of days, typically 60 days.

Cash Drag – money sitting in your P2P lending account that is not being lent. This is usually due to the platform not being able to offer any loans that match your Auto Invest criteria.

Crowdfunding – financing a project through a crowd of people instead of the traditional route of bank loans.

Crowdlending – a form of investment in which a group of people lend money to individuals or companies in exchange for interest, usually through an online platform.

Default rate / Delinquency Rate – the ratio between the value of defaulted loans and the value of the total loan portfolio. 

Invoice Financing (also factoring) – a way for businesses to borrow money against the amounts due from customers invoices. When a business sells a product or service to a customer or another business, it often happens on credit in the form of an invoice with a number of days until the amount owed is due.

KYC – Know Your Customer, alternatively known as know your client or simply KYC, is the process of a business verifying the identity of its clients and assessing their suitability, along with the potential risks of illegal intentions towards the business relationship.

Loan Agreement – a loan, lease, credit agreement or a financial arrangement of different nature concluded between the Loan Originator and the Borrower.

Loan Originator – a lending company which is the Creditor, who, in compliance with the co-operation agreement concluded between the Creditor and the Platform, has authorized the Platform to transfer the Loan Originator’s Claims towards the Borrower, by using the Platform, and on behalf of the Creditor, to take other steps prescribed in the Agreement and in the Assignment Agreement.

Loan-to-Value (LTV) –  refers to a ratio between a loan amount and the collateral’s market value. An LTV ratio of 50% would mean that collateral’s value is twice that of the loan.

Primary market – market in which we investors purchase loans or shares from the platform or loan originator.

Principal – the amount of money you originally put into your investment and now earn interest on in return. When you borrow money, it refers to the amount of money you borrow, excluding interest payments and fees. 

ROI – Return on investment (ROI) is a financial metric used to analyze the efficiency of an investment. ROI = profit from an investment / investment cost, and is usually expressed as a percentage.

Secondary market – a facility that enables investors to trade loans between themselves. The secondary provides a mechanism to quickly sell your shares or loans for quick liquidity, and also provides a place to grab some good deals, since other investors might be offering shares or loans at a discount in order to achieve quick liquidity.

SEPA transfer – short for Single Euro Payments Area. It’s the newest format for cross-border Euro bank transfers. SEPA aims to make cross-border Euro transfers within this area equivalent to a domestic transfer within your own country. You should always use SEPA if available over wire transfers as they are faster and cheaper.

XIRR – a financial function that returns the internal rate of return (IRR) for a series of cash flows that occur at irregular intervals. It is commonly found in spreadsheet programs such as Microsoft Excel.