Reducing the risk of P2P lending

I currently have investments in both Mintos and Peerberry. In this article I talk about my strategies to minimize the risks of peer-to-peer lending.

There are 4 types of risk associated with P2P lending;

P2P Platform

The risk with the platform is that the platform becomes insolvent. In this case the loans between you and the borrower are still valid and there is a good chance that you will get your money back, but it may be delayed and it is possible that you will not get it all back. There are 2 ways to reduce this risk. First, choose the most reliable platforms to invest with. I have chosen Mintos, it is the largest P2P platform in Europe and has been consistently growing. The second is to spread your investments across several platforms. I have started to look at other P2P platforms and recently invested €100 in Peerberry. This is a trial for me but if this goes well I will invest some more and then look at other platforms also.

Loan Originator

By investing all of your money in one loan originator you would be taking a huge risk that if something was to happen to that loan originator then all of your investment would be gone. I have reduced this risk by diversifying my investments across many loan originators. Mintos also has a loan originator rating scheme where loan originators are rated from A+ to D-. I have chosen to only invest in loan originators that have a rating of greater than B-. This also helps to reduce the risk as these loan originators are far less likely to have issues. Diversifying your portfolio of loan originators is very easy with the auto invest feature on Mintos as it allows you to automatically diversify.

Borrower

If you invest in a loan and the borrow fails to repay, you can lose your investment. By investing small amounts in multiple loans I am spreading this risk across several loans, I invest only €10 in each loan. The other thing I do is I only invest in loans that have a buyback guarantee. This means that even if the loan defaults, I will get the principle and interest owed to me on that loan when the loan becomes 60 days overdue. For me this is one of the most important steps I take to reduce risk. There are loans with a higher return without buyback guarantees but I consider these too risky. 

Liquidity

Once you agree to a loan, the money that you have invested into the loan cannot be touched. To minimize this I invest in short term loans that only last 1-2 months. These have a higher return but are also more risky. However as I have the buyback guarantee I know that I will get my return from these loans in a maximum of 4 months (2 months invested + 60 days buyback guarantee)

Partial Investment

It is possible that some or all of your money can sit in your P2P account and not be invested. This money is making no return. To reduce this I use the auto invest feature in Mintos and Peerberry. They allow you to set up investment strategies where you can set all the filters as you like and your money will be automatically re-invested when it becomes available. This also saves you time as you don't need to manually invest every day. In addition, as I mentioned earlier, you can automatically diversify your investments across different loan originators which helps reduce this risk also.

P2P Lending Explained

In the interest of full disclosure, the links to Mintos in the following article are affiliate links. This means that if you sign up to Mintos using this link I will get a reward however you will also get a 1% bonus on the amount you invest in the first 90 days. This will be calculated and paid to you after 30, 60 and 90 days.

What is P2P Lending?

P2P lending, also called crowd funding, means peer-to-peer lending. In its simplest form it allows a loan to be provided from one individual to another without using traditional banks. Effectively it removes the middleman and this allows the lender to receive the benefits that the banks would usually take while also allowing the borrower to get a lower interest rate than would be provided by a traditional bank. P2P lending has only existed since 2005 but has grown rapidly. There are many P2P lending sites, the largest site for European investors is Mintos. There are many others such as Peerberry, Investio, Bondora, Grupeer and Fast Invest. American based options include Lending Club, Funding Circle and Peerform.

How does P2P Lending work?

The P2P lending site allows both investors and borrowers to sign up. It facilitates the loan, displaying all loans to investors along with terms and rates of return. The rate of return varies depending on the credit worthiness of the borrower, higher return means higher risk. The investor deposits a sum of money and then chooses loans that they want to invest their money in. Once the term has passed the borrower repays the loan and the investor is repaid for the loan including the interest.

Can i make money with P2P lending?

The simple answer is yes! Returns vary from site to site based on the type and risk of the loans anywhere from 3-25%. However, as with any investment there are risks involved that need to be considered before investing any money. The larger the return the larger the risk. I have invested €1000 of my own money on Mintos and so far I have achieved about a 14% return which is very high. I will have an article soon based on this showing how I set up my portfolio to avoid risks so keep an eye out!

What are the risks of P2P Lending?

There are 4 types of risk associated with P2P lending.

P2P Platform

The risk with the platform is that the platform becomes insolvent. In this case the loans between you and the borrower are still valid and there is a good chance that you will get your money back, but it may be delayed and it is possible that you will not get it all back. Choosing to invest in a more established platform such as Mintos helps to reduce this risk.

Loan Originator

Lots of P2P lending sites get their loan offers not from individuals but from companies who provide loans. When you choose one of these loans the loan contract is not between you and the end borrower but between you and the loan originator. If this loan originator defaults you are at risk of losing your investment. By doing some research into each loan originator and spreading your investments over a number of loan originators you can reduce this risk. 

Borrower

If you invest in a loan and the borrow fails to repay you can lose your investment. By investing small amounts in multiple loans you can spread this risk so that the returns from your successful loans cover the loss from the loans that fail. Also a number of P2P platforms have a buyback guarantee. This means that the loan originator takes this risk and regardless of whether the borrower pays back the loan or not you get your expected payment. Depending on the loan the payment will be made once the loan become 15, 30 or 60 days late.

Liquidity

Once you agree to a loan the money that you have invested into the loan cannot be touched. This means that you should only invest money that is genuinely free to invest as in the case of emergency you cannot get this money. Some providers provide a secondary market that allows you to sell your loans so that you can get your money out but this depends on demand and the rate of return you receive will be drastically reduced.

Partial Investment

It is possible that some or all of your money can sit in your P2P account and not be invested. This money is making no return. Lots of P2P platforms have an auto invest feature which makes sure that your money is always fully invested and making you money

Should I invest in P2P lending?

P2P lending is a good way of getting some good investment returns but like any investment, P2P lending has its risks. If you feel comfortable with them and have some money saved which will not be needed in emergencies then by all means I think go for it. I would advise you to do some research into the different platforms and to start small and build some confidence in the platform. I made my first investment in Mintos and so far I am very happy with the returns. It is one of the more established platforms and it provides a number of ways for you to reduce each of the risks. I will provide a more in depth article on Mintos soon so keep any eye out for that!

What else should I know about P2P Lending?

One other point that you should know and consider is that profits from P2P lending, just like most other investments, are taxed. In Ireland you will pay tax at your higher rate of PAYE. See this document from the revenue for more details.

First Time Buyer in Ireland - A step by Step Guide

Buying your first property is a daunting task. This is my step by step guide for first time buyers seeking more information on the process.

Start Saving

The first and most important step for anybody looking to buy their first property is to start saving! First time buyers are eligible for high LTV mortages but will need to have some savings themselves to make up the rest of the value of the property. This could be up to 10%, if that is the case then it means that if you want to buy a property for €300,000 you will need to save €30,000. If you want my tips on how to start saving click here.

Research Your Options

Start researching your options. There are a number of online calculators that will help you calculate the value of the property that you are eligible to get a mortgage for. My favourite is from mortgages.ie. The mortgage amount you can borrow is based on 2 things; your current salary and your ability to repay. You can borrow 3.5 times your salary. You must also be able to show capacity to repay the mortgage. For this the lender will look for proof that your monthly savings and existing rental payments cover the monthly cost of repaying the mortgage. The savings and rental payments must be consistent and should show clearly on your bank statements that you will have to provide when applying for the mortgage. This highlights again the importance of saving! If you do not meet the salary or repayment criteria don't panic, there are exceptions available. For this I would advise you to talk to a broker or lender and discuss your situation with them. Also you have to keep in mind the solicitors fees, valuation fees, engineers report fees, stamp duty and fit out costs. In general, the bank will look for you to have 5% of the value of the property left over after paying for the property itself to cover these extra costs.

Choose a lender and mortgage terms

If you haven't yet saved enough to start the application process, I would still advise you to talk with a mortgage broker or bank, there may be exceptions available to you and being informed of these may allow you to proceed earlier than you expect. At the worst case, you can come away from the meeting with a plan for getting to where you need to be. Mortgage brokers do not provide mortgages but help you get your mortgage. They will talk with multiple banks and try to get you the best deal. You do not need a mortgage broker if you are confident enough in your ability to research all available mortgages, assess the options and deal with the banks directly.

If you have been saving and think that you are ready to start looking for properties then at this stage you should choose a broker or bank and make an application for a mortgage. They will first approve you for a mortgage in principle. This means that they will give you preliminary approval on a mortgage as long as the property you chose and your detailed application are approved. Some things you will may need to provide at this stage would be;

• A completed application form
• A colour copy of your photographic ID. The lender will need to sign the copy as a true copy of the original document.
• Proof of address e.g. a bank statement or utility bill
• 6 months statements for all bank accounts
• 12 months statements for all savings accounts
• 12 months statements for all credit card or loan accounts
• Explanations for any unusual or large spending habits
• Explanation of the source of your savings for the deposit
• A salary statement completed and signed by your current employer
• Your most recent p60
• 3 months payslips
• If self employed you will need 3 years accounts provided by your accountant
• If separated you will need to provide a separation agreement and details of your maintenance commitments
• If you worked overseas you will need to provide a credit report from the country where you worked 

Many options exist for mortgage plans. The first thing that you can change is the term of the mortgage. Depending on your age and ability to repay, you may have multiple term options allowing you to repay your mortgage over a number of years. Longer mortgages will pay more interest over the lifetime of the mortgage but shorter mortgages will have higher monthly repayments. You need to chose an option that suits you best. The next thing you can change is whether the mortgage is a fixed or variable rate mortgage. Fixed rate mortgages will have a lower interest rate but they tie you in to that mortgage for the fixed term. If you want to change lender or switch mortgages during the fixed term you will pay a penalty. If you want to pay a lump sum on the mortgage during the fixed term you will also pay a penalty. Some lenders now allow you to overpay on the monthly payments without a penalty. The benefit is that during that fixed period the mortgage interest rate will not change and your repayments will remain constant. If you chose a variable rate mortgage you can make lump sum payments, change mortgage or overpay monthly as you choose. The drawback with this is that the mortgage interest rate can change and your monthly repayments can change, going up as well as down. You will need to assess the options and chose the option that is best for you.

One of the best online sources for researching mortgages is the mortgage calculator on mortgages.ie. It will give you available mortgage options showing the monthly repayments on each, remember, variable rate mortgages can change. Bear in mind this is not an exhaustive list and other mortgage lenders exist, carry out your own research to find these options.

 Choose a property

Now that you have mortgage approval you can start your search. Knowledge is the most import thing here. Choose an area and make sure that you constantly keep yourself up to date with the properties available. One great piece of advice is to return to a property outside the hours of the viewing, knock on the neighbor's door and ask them some questions. Usually they are open to helping if you explain that you are a prospective buyer. You either get a head start on getting to know your neighbors and you get some great information about the area and property or you discover that your neighbors aren't so inviting. The main thing for any purchase is not to overpay so do your research on the value of other similar properties in the area. If you are happy make an offer. Never offer your mortgage approval limit on the first offer and never let the agent or seller know your mortgage approval limit. Though estate agents are friendly and supportive remember that they are acting on the sellers behalf and not yours!

Choose a solicitor and insurance and complete the mortgage application process

Once you have had an offer accepted you can choose a solicitor. Get in contact with several solicitors and ask them for quotes. Review each of these quotes and ask around for the solicitors reputation. Though not always the case, remember that the cheapest is not always the best. Your mortgage and property could be the largest investment you will make in your life. It is not one you can afford to be messed up.Your solicitor will act on your behalf to draw up contracts, draw down your mortgage and register the property in your name. You will also need to have insurance on the property. Your bank may provide this but you are also free to shop around. If you are using a broker they will help you find the best deal. At this point you will also have to pay a deposit on the property.

Now that you have an exact property you can complete the final steps in the mortgage application process. You will need to get an official valuation carried out and provided to the bank. In some cases you may also need an engineers report (even if not required you may want to do this anyway for your own peace of mind).

Signing offer letters and contracts

You will be provided with an official mortgage offer letter from your chosen lender. If you have a mortgage broker they will help you to review this and provide financial advice. Your solicitor will provide legal advice. At the same time the sellers solicitor will issue a contract of sale to your solicitor. Your solicitor may clarify some details with you and may seek amendments to the contract. This could happen several times until both solicitors are happy. Your solicitor will call you in and at this point you will sign all contracts. Your solicitor will send the signed contract to the seller with an agreed closing date and draw down your mortgage. Keep in mind that the average time from offer acceptance to the final closing date in Ireland is 120 days, 4 months! Once the seller sends back the contract signed the deal has been agreed and once the closing date comes around the property moves into your possession.

Disclaimer - Buying a house is one of the most important decisions you will make and these steps are my experience. I am not a professional financial adviser and any decisions you make are at your own risk. I just seek to pass along information I learned along the way. I advise you to carry out your own research and if needed seek professional advice.

Buying My Apartment in Ireland

Having been working for a few years in Dublin, I realized that I wanted to get away from living from month to month and wanted to start to work towards financial freedom. When I looked at my spending I realized that I was spending a lot of money on things I didn't really need. Sure people will say that money doesn't buy happiness and that I should spend it and enjoy myself. But for me, I actually enjoy making money. It gives me a thrill to see my investments slowly increase, it's the equivalent feeling for me. So I chose to cut this spending and start saving. If you want my tips on how to save click here. At the time I didn't really know what I was saving for but I knew I would want the money and most likely it would be for a house.

The more I saved the more I wanted to use this money to buy a house or apartment. The main reason behind this was that I saw the money I was spending on rent as a waste. I saw that rent and said: "well if I could just be spending that money to pay a mortgage then at least I would be paying myself and not somebody else". I was in a solid job that I enjoyed and I expected to stay there for at least 10 years. This meant that I didn't expect to have to move area anytime soon, so buying a property wasn't going to limit me. I also felt that even if I did have to move then I could rent the room I was staying in in my property to cover some or all of the rental costs in another property. Without realizing it, the decision I was making was that I wanted to increase my net worth.

I spent the next few years saving and was getting close to the amount I felt I needed to start looking a properties when I got a bit lucky. The landlord in the apartment I had been living in rang me to tell me that he was getting the apartment valued with a view to selling. I told him that I had been saving and asked him to let me know what he was looking for once he had gotten it valued. After a few weeks he rang to let me know. The price was a bit higher than I had hoped but I asked him to give me a week to look at finances and see what I could do.

I spent the next week looking around at mortgage providers. I spent hours calculating the mortgage amount I could get, the repayments, the fees involved for solicitors, my ability to repay and my ability to get that dreaded deposit together. After all my calculations I decided I was in a position where I could make an offer at least if I was approved for the mortgage. I made the application and was approved in principle. 

I knew that the landlord was very unlikely to accept my first offer so I made an offer below what I was capable of affording. As expected, the landlord rejected this and I asked for a bit more time to redo my calculations and see what I could do. I didn't need this but it was a negotiating tactic to make the landlord feel like I was being stretched. I knew that he wanted to sell and that he would prefer to sell to me as it would mean he wouldn't have to pay auctioneers fees and it would be a far quicker sale. After a few days I called again to increase my offer, though not all the way to my maximum, and the landlord asked for a bit more time to consider it. When they called the next day they told me that we were close and that if I could increase my offer a slight bit more then we could make a deal. I made an increased offer there and then and said that was my absolute maximum and that if that wasn't acceptable then I would have to stop there. Luckily they accepted!

At that point I had a mortgage in principle and an offer accepted. The first main task was to complete the mortgage process. This included submitting bank statements, completing application forms, choosing a mortgage option and getting an independent evaluation on the property. It took about a week after submitting all the paperwork but I was granted the formal approval. During this week I had contacted a number of solicitors to get quotes. In the end I chose a solicitor who wasn't the cheapest, but was also close to where I worked and easy for me to get to during my lunch breaks. This made things easy for completing and submitting paperwork as I could actually pop in to the office. The process of drawing up contracts and completing registration took about 3 months. During this time I had to pay the deposit which was 10% of the property value. I paid this to my solicitor and they looked after it from there. My solicitor was probably overly picky but I was happier with this than if they weren't careful enough. This was too important to rush and get wrong. Too be honest it also gave me a few extra months to save because I was really pushing myself to the limit to complete the deal. As this was an apartment in an apartment complex, I also had to review the management company finances and make sure I was happy that the apartment complex was being run well. Eventually I signed the contracts, the solicitor took care of all mortgage draw down and transfer and after all of this was completed and I was given the keys to my new apartment.

One of the best things about the deal for me was that I had lived in the apartment for 3 years before this. I was familiar with it and happy that I knew how things ran and that nothing was being covered up. It made me much more comfortable with the investment. The other great thing was that the apartment had rooms I could rent out! After getting the keys I was able to rent 2 rooms. Because I am a live in landlord I can make up to €14,000 per year tax free from rental income. In my case this means that the income I get from rent covers my mortgage payments.

I created a separate current account for the apartment income and expenses. This allows me to keep track of the costs and income much better. I also still pay "rent" myself each month. I deposit the same rent I used to pay from my personal current account to the apartment current account because even though the rental income covers the mortgage, I need to pay for management fees and maintenance costs. I also want to build up a safety fund for the apartment, just like I have for my personal account, so that I can deal with any emergency expenses. Once I have this safety fund in place I will be able to use this extra money to invest in other areas.

That is how I have put my foot on the property ladder. I was lucky that the apartment I was living in was being put up for sale but even if it hadn't, within 6 months I would have purchased another similar property anyway. I am now 6 months into being a property owner and landlord and so far its going great! I have rental income covering my mortgage, my own rent covering expenses and building up a safety fund and I am also able to keep saving at the same rate that I was before I purchased the apartment. Admittedly I have used a small amount of these savings to redecorate the apartment and I will continue to do this for a few more months.

Thanks for reading and keep an eye out for more updates!

The 8 mindsets you need to make money

1. You control your life, your life does not control you

This is the most important mindset anybody who wishes to make money needs to have. If you believe that you control your life you will take action to achieve the outcome that you want. If you believe that there is nothing you can do and you must rely on others, then you will do nothing to take action and probably nothing will happen. The signs of this attitude are that you blame others for your situation, you justify it by saying that don't want to be successful anyway and you criticize those who have achieved success.

2. Admire other successful people don't resent them

You have probably heard that successful people are greedy. This creates a negative view of success and is called the "scarcity mindset". In this mindset you think there is a limited amount of wealth in the world and the wealthy have taken more than they should have. Viewing these people as inherently bad you will never truly want to be successful. Whenever you find yourself resenting successful people you are showing the scarcity mindset. The opposite is the "abundance mindset": In this view you think that value can be created and situations can be win-win. In this scenario you look at successful people and think that they have delivered a great value to the world and so have been rewarded for their contribution. With this view you admire successful people and you want to achieve their success.

3. Be committed to being successful

Everybody wants to be successful: ask anybody and they will say yes. But the people who become successful are the ones who remain committed to their views and goals for the long term. People who fail generally give up after a short period where they don't see instant return for their efforts. Those who succeed understand that they are investing for a longer period and are willing to continue and adjust their efforts as required until they realize their goals.

4. Value and monitor net worth

To be a successful investor you must appreciate the idea of net worth. This will help shape your decisions to help you make successful choices. Take for example two people who each win €10,000. One takes his money and buys a brand new car to replace his old one, the other invests his in a 5 year guaranteed 10% return investment. After 5 years the person who bought the car sells his car for €2,000. The person who made the investment has €11,000. Though they both started off with €10,000 but now one has €2,000 while the other has €11,000. This €11,000 can be reinvested and the cycle repeats itself. Here is the idea that the rich get richer and the poor get poorer, but the rich make smart investment decisions that increase their net worth, the poor make poor investment decisions that decrease their net worth. Consider net worth before spending your money.

5. See the opportunities not the obstacles

Successful people see opportunities and obstacles but ask: "How can I overcome them?". Unsuccessful people see the obstacles and give up. Many people see the same opportunities but have the courage to chase them. This is not to say that you make reckless decisions. You have to assess the risks and rewards, and if that makes a good investment to you, have the courage to follow the opportunity.

6. Be comfortable with managing money

Have you ever seen somebody who is uncomfortable with having money? It's common for somebody who wins a large amount of money to simply spend it all straight away and return immediately to their old way of life. This is because people are uncomfortable with making decisions about their money. The easiest way to change this is to start managing your finances when they are small. Make small calculated saving and investment decisions. Some will be successful and some will fail, but you will become more comfortable with making investment decisions

7. Make your money work for you

One of the greatest ways to lose money is to allow your money to sit. For example, assume you have €10,000 cash in your hand. You have enough money to buy a car for €10,000. Every year inflation causes everything to increase in value, assuming the economy increased at a rate of 2% inflation. Now you still have €10,000 cash, but the car is now selling for €10,200 and you can no longer afford it. The lesson here is that you must invest your money in some form just to prevent it from losing value.

8. Constantly learn and grow

Unsuccessful people claim to know all the answers. This is an attempt to not seem stupid. Successful people accept that they don't know everything. They view each thing they do not know as an opportunity to learn and increase the value that they can provide. As in point 2, they view this as a way to provide value to more people and so a way to increase their capacity to be successful.

This post is my interpretation of a book I read called Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth. I have modified it to be based on my views and highlighted the items that I felt were the most applicable and agreed with my views of life and investing.

7 steps to start saving successfully

The first task for anybody looking to invest in anything is to start saving! Here is a 7 step guide to start saving successfully.

1. Write down you savings goal

What is it you are saving for? A deposit on a house? A holiday? A new car? Whatever it is, write down the amount you need to save. I will make it more real and make you think about what you really want.

2. Write down your existing spending

Its very simple, log in to your online banking and one by one categorize your spending for the last full month, or even better over a 6 month period so that you get a better average. Categorize your spending into rent, bills, food, clothing, entertainment and whatever other categories suit your current expenses.

3. Filter out the non essentials

Take this categorized spending and start asking yourself what could I remove from this and still be OK? What do I need and what do I want? In this step be ruthless. Cut it back to only the bare essentials, rent, food (if you cook at home), travel for work, essential clothing (you don't need to have the best designer clothes!), health and anything else you personally need. Things that aren't needed are eating out, social nights, cinema tickets or new gadgets. These lists are not exhaustive but you can get the idea. Don't worry I'm not suggesting you get rid of everything just yet, but you need to see whats technically possible.

4. Decide how much money want to set aside each month

Look at the difference between what is technically possible for you to live on and what your income is. In theory its possible for you to save this! In practicality its a bit different. Saving should not completely remove your life, after all your health (mental as well as physical) could be your most important investment. Find a balance. You might decide you can do without all of the nice things depending on your desire to save and invest. If you can great for you, but you might decide you need €500 per month for yourself. That decision is up to you, but be honest with yourself here. Its nobody else's responsibility to let you save that deposit, or get that first €1,000. If you can't give up things or find a way to set something aside, don't expect to be reaching your goals any time soon and don't try to blame anyone else for it.

A good number here is 10-30% of your income, but anything is better than nothing! If you can start only with €20 then do. It will get you into the habit of saving and can give you a sense of achievement when you start to see it grow. You might even decide that you can cut back on your spending and add a bit more.

5. Set up a savings account

Set up a separate savings account. This will allow you to set aside the money you plan to save each month and keep it safe from those moments of weakness! Keep this money separate and only touch it in emergency situations! It will also give you a way to clearly show your savings increasing. Its amazing how rewarding it is to see that balance growing!

6. Set up a direct debit

Set up a direct debit from your current account to your savings account and schedule it for right after you get paid. This will make sure the money gets transferred automatically to your savings account and you never get that urge to splash out. If you wait until the end of the month its more than likely the money won't be there to transfer.

7. Watch your savings grow

You've done all the hard work, now sit back and watch your savings grow!

This post is based on my idea of the concept of paying yourself first. It is how I started saving but you can do it in different ways. It is not just applicable to somebody who is starting saving in Ireland. If you want to read more there are lots of articles and literature based on this principle.

My first steps to investing

Where to start? I'm now well on the road to creating financial freedom but a few years ago that wasn't the case. I had been working for a few years, enjoying the financial freedom that had come with starting a job and getting a regular paycheck. I was getting paid, paying rent and going out with friends, having a good time and if at the end of a month, or a few months, if there was any extra left in my bank account, I would buy myself something bigger as a treat. New games consoles, new expensive phones, a new car whatever it was I felt I needed at that time. I wasn't flush with cash but equally I wasn't struggling. Then slowly this thrill started to wear off. I realized that every month I was in the same position. I knew that wasn't what I wanted to be like for the rest of my life. So I looked at my expenses and like a lot of young professionals I immediately looked at the rent payments. These were the most obvious. They repeated every month, they were large payments and I got nothing in return, at least in my eyes. So I set off to find out how I could own my own house and turn these rent payments into mortgage payments.

After researching, the main hurdle of course was the deposit. So I started saving, putting money away each month and cutting back on the splurges. After a few years of saving I got a bit lucky. The landlord in the apartment I had been renting called me to say that he was getting the apartment valued for sale. I told him I had been saving for a property and asked him to let me know how much he expected to get before putting the property on the market. This suited us both, I knew the house and knew what I was getting, he was getting a quick sale, and we both avoided the auctioneers fees. After a bit of negotiating we reached an agreement and after completing all the paperwork, I became a home owner.

The best thing about this apartment was it had an extra 2 rooms that I could rent out! This gave me something new for the first time, passive income. I had set out with the idea that all I wanted to do was use my rent payments to invest in my own property rather than paying them to nothing, but I had set myself on another path. The idea of passive income took hold and the more I looked into it the more I realized what I was after was financial freedom, enough income each month from my investments to provide myself a living wage.

And so that brings me to the present day, I have owned the apartment for almost a year now. I have built my savings back up a bit having stretched myself to buy the apartment and I am now looking at ways to grow my passive income. I have made a small investment in P2P lending to test the waters and hope that can grow further for me. I have set up this blog to document and share my experiences and hope I can pass along some helpful advise to some people along the way. Though I have called the blog TheIrishInvestor, I hope it will be of use to anybody the world over who is trying to save, invest and grow their income and net worth. €3,500 per month has become the magic number for me, a living wage, to allow me to escape the rat race, with enough to save and continue the process! So please join me on this journey and I hope you can gain some value from this blog!