Got €5? €10? €500? Here is How to Start Investing with Any Budget

investing with small budget

A couple of months ago I was in the place where I started to search for opportunities to earn passive income. Being a quite large number of alternatives it’s hard to choose something that will take good care of your money.

So, I want to share with you 2 platforms I have already placed money with and are paying interest to me.

When it comes to investing one of the main dilema is whatever is best to add monthly installments or start with big chunks of money.

Each way has its own benefits, but when you are at the beginning, I would recommend you to start with a small budget and add extra money on a monthly base. I consider being extremely important to form a habit of investing monthly. As time goes and you set aside a budget for investing it will become a culture. It will start influence the way you spend money and the way you think about them.

For example, I have formed a routine to add at least €20 every month to one of the platforms. It’s not much but in the beginning is not the amount that is important but the act of doing it. Now, when I spend €20+ on something I often ask myself “Is it not better to add this money to my Mintos account? 

This being said let’s move to the actual action.

Where to start?

The 2 platforms I already invested with are both peer-to-peer lending platforms which earn interest from 9% to 22%. I am pleased with the interested considering the low risk I am exposed to.

Mintos

It is one of the oldest and widely used platforms for peer-to-peer lending. It has already invested over €1.4 billion since 2015 and has over 94.000 investors. The average net annual return is 11.6%.

One great thing about Mintos is that most loan originators offer a 60 day buy-back guarantee. If a loan you funded is not paid back after 60 days the loan originator will buy the loan back from you with the full interest for the loan period + the 60 days.  

There is no minimum deposit but the minimum amount that can be invested into one loan is €10. So, you should always deposit a multiple of 10. 

Below is a screenshot of my account at the time of writing and based on this I want to explain a couple of things I have learned over the past 4 months. 

Invest with Mintos.

The first thing you’ve noticed is the net annual return of 8.85% which is lower than what I’ve told you. Here is the explanation:

  1. Funds were added monthly. 
  2. I’ve only invested in short-term loans up to 30 days. I chose 30 days because it gives me the freedom to have most of the money available to withdraw in 30 days. The downside of it is the grace period. This is the period when the loan is paid late because of bank-to-bank transfers, national holiday or other special causes from the loan originators. The length of it is different from a loan originator to another. It’s important to know that the grace period does not carry interest as late payments do
  3. Once, I placed some of the funds (€21.41) by myself without checking for the buyback guarantee. I don’t know for how long I will carry that loan but it was a lesson. 

Enough about Mintos but so far I do recommend this platform. If you want to know more about my experience so far, I will soon write an article. Until then you can sign up here.

Envestio

It is a peer-to-peer lending platform which offers loans to private companies. It started as a private investment fund in 2014. On December 2017 it become public as a crowdfunding platform. 

It already has over 2.500 investors and over €7.4 million invested. The average rate of return is 20%

The minimum deposit is €100 but the minimum amount to invest in a project is €1. 

My experience so far with Envestio is limited so I can’t say much about it. In the meantime, you can read the How-To-Guide to Envestio and I will be back once the first repayments are made (30th December). 

Other platforms

There are many other platforms but I did not try them out, yet. Most of my money is in a real estate project now and until that is finished I want to test and find the best platforms I can work with. More about my real estate project soon. 

I will list here all the platforms I already have an account on and plan to add funds soon:

  • Crowdestor – real estate projects
  • Swaper – loans
  • Housers – reals estate projects
  • Robocash – loans
  • Fast Invest – loans
  • Crowestate – real estate projects

In the end, I want to close with a section that I want to be as a signature for my articles. 

Important to know:

  • The most important is to start investing. It will affect your mindset in a positive way.
  • When you start small focus on building a routine to invest rather than the amount you invest. 
  • Always diversity. Don’t choose only one platform. Place
    €100 into 8-10 loans/projects rather than into a single one. It’s very important to distribute the risk.
  •  Be informed. When you don’t know something about a platform ask their support. 
  • Keep track of your investments. I recommend you use an Excel document or an alternative.

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