When I realized that finance had to work for me

A revolutionary article about this when I realized that constantly working for money is a bad model. One does not get rich by saving. I describe my experience and the steps that lead me to value and invest money. I describe exactly where I invest, where I see opportunities, and where my investment ideas go. From savings, dividend stocks, P2P loans to risky HYIP projects and cryptocurrencies (not only Bitcoin, Ethereum and Litecoin).

Where investing ideas started

When I first left for Australia in 2011, I had saved tens of thousands and backpacking was a low-cost way of traveling for me – actually the only one possible for me, low-cost!

I saved where I could. But after a few years, I realized that it’s not about buying a ticket 500 or 1000 crowns cheaper. It depends a lot more on how I decide to work with the finances I have at the moment. The ones lying somewhere waiting for my command.

The longer I travel, the more I realize that I have to work with finances more cleverly. Resp. finances must work for me.

That’s it!

And so I focus more and more on investing (valuing money) than saving. It is useless for the money to just lie in a bank account with zero appreciation.

Therefore, I wrote a few tips and personal experiences. The article deals with research in the first phase and investment in the second.

I remember one issue of Forbes magazine where I read that due to the current negative interest rates, we should even be happy for zero interest. It goes against my coat and I can’t and just don’t want to identify with it, even though I like Forbes. I believe there are ways to build a relatively secure and performance portfolio.

Where I save money

The expenditure item is very important. There are countless areas where one can save. I chose the ones that help me a lot when traveling the world and working remotely.

Cashback Portal – Get your money back

Online booking and online shopping are a common part of the life of a traveler and digital nomad. Cashback portals have introduced a variant in which you will return part of the money from your order .

These are mostly percentage units. It’s not big money. On the other hand, why not save 3% when booking on Booking.com or Agoda.com?

How much will you save this year?

For me, it costs hundreds to low thousands of crowns. But what I like best is low, almost no time. You have to go to the given booking portal or e-shop via your cashback portal – so does it cost you two or three extra clicks? Perfect!

I use the cashback portal PlnaPenezenka and you can read how it works in my review .

Money transfer from / to abroad

Bank charges are one big evil. Fortunately, there are already a number of services that devise and implement systems to circumvent bank fees.

When I sent the earned money from Australia to the Czech bank account of ČSOB, I tore my hair. Unnecessary fees for transferring money from abroad and, in addition, a “smart” set exchange rate from a Czech bank. A similar scenario took place when I transferred the money saved from a working holiday stay in Canada to the Czech Republic.

Since then, I have been actively using the Transferwise service , which makes transfers from and to abroad without bank fees.

It is important to count everything. Don’t be sheep. Go to the Transferwise online calculator and calculate how much you will receive after the transfer. Do the same in your internet banking. And in 5 minutes you will see which way is cheaper for you. You can read more about the service in my review: Transferwise reviews on transferring money from abroad .

I now use Transferwise to transfer money to foreign bank accounts for investments or from investments to withdraw money back to a Czech bank account. CurrencyFair can be an alternative to Transferwise .

These revolutionary services will defeat Czech banks even in SEPA payments! You say that SEPA payment is in AirBank for 25 crowns, what more could you want? But Transferwise transfers money cheaper (it’s not just about fees, it’s also about the rate at which the payment is transferred)! I did an experiment and you can find specific numbers with conversions in the blog post Best Conversion of CZK to EUR and vice versa .

ATM withdrawals: Revolut, Equa

Digital nomads cannot avoid withdrawals from ATMs abroad . They can be minimized, but taking a lot of cash with you is also not good. The optimal option is to find a bank or service that offers cheap ATM withdrawals. I used to use AirBank, then I switched to Equa Bank, which charges only CZK 7 for withdrawals from ATMs abroad .

How much does it cost to withdraw from an ATM from abroad at your bank?

A literally revolutionary solution is the Revolut service , which is a virtual wallet linked to the Mastercard payment card . Withdrawals from abroad for free. Perfect! Just remember to top up your money on time. Revolut also offers transfers between individual currencies – but calculate well in the online calculator how much it will cost you.

Where to invest and my experience

After a slightly negative experience with mutual funds from ČSOB and ING, I decided to skip this category and divide the defined percentages between more conservative and riskier investments. The goal is to avoid middlemen who steal money.

It is important to remember that this section below is made up of finances that are ” emotionally written off “. So if it all goes down, nothing happens at all and I continue to function normally. Although I consider some to be relatively safe, others are highly speculative and the result cannot be relied upon.

Dividend shares

We buy dividend shares in order to collect a regularly paid dividend, so it is not even speculation about a rise in the share price. In the Americas and Western Europe, investing in dividend stocks is often a strategy for earning passive income or retirement benefits.

I got the best kick from Tomas Tatransky on his course from NaučmeSe Dividendová akcie . That was the last point for me and I immediately opened a FIO e-broker account. An analysis of what to invest in came up.

Since the end of 2015, I have loved dividend shares and have become my favorite for long-term investments. I have published a number of reports and the most read are:

• Why I invested in Qualcomm
• Which helped me see an opportunity to invest in Wells Fargo stock

Today I’m sorry I didn’t start earlier. I do not agree that we need to have 100,000 or 50,000 to start investing in stocks. That it doesn’t make sense otherwise. My view is that in the first phase, it’s not about making a fortune. In the first phase, we must learn to work with finance. We need to find out how we feel when we put money somewhere and then follow our feelings and trends when companies are doing well or not.

Why not start with 5,000? That’s how I started and today I’m in seven digits in investment. I think it’s important to see if we enjoy it. What does this lead us to? Do we have to do any company research? How do I know which is good and which is not? Who can I get advice from? Is the advice good or distorted? I have an internal problem investing 5 thousand, is that a lot? How do I feel when I click the “Buy” button? How do I feel when after 2 months I see that the company has lost 12%? How do I feel when a company has paid a dividend and some money has come to my account?

I currently have invested in Czech and American companies. I have the majority in the US market and now I feel the need for greater diversification.

The FinViz portal is great and allows you to create test portfolios. Here, for example, I have selected a few companies that have a very attractive dividend (last column). Of course, there are more selection criteria and you can find the full overview in the podcast on dividend shares .

I also use the finance.yahoo.com portal a lot.

I still perform analyzes of interesting companies, ie stock-picking. I don’t think naively that I’m smarter than the whole market, but I try to learn through analysis. I take a lot from already published analyzes and opinions of investors / traders. I compare the criteria and try to make my own picture.

In addition to the FIO broker, I also use the Degiro broker , which has much lower fees.

Investing in P2P loans

P2P loans are a new model that offers an alternative to traditional banks and non-banking companies offering loans. In the P2P loan mode, the investor and the person interested in the loan are connected. The so-called micro loans are very popular , so the amount of investment is very small (eg 5 Euro). By diversifying as an investor, you will spread the risk among hundreds of loan applicants.

Probably the best known in the Czech Republic is the P2P platform for Zonka loans . Although there are many investors in Zonky, those interested in a loan are not attractive at all. Abroad, the P2P loan market is much larger and more investment-friendly. One of the most famous is the Bondor platform . Based on the reviews, I decided in 2014 to try it. To this day, I invest here and consider Bondor a stable and credible investment.

Experience with the Bondor platform

I have been investing through Bondor’s P2P portal for several years and although I am not active on this platform, the percentage appreciation is very pleasant. Below are a few notes and experiences that I think significantly help me to increase my appreciation.

A few months ago (2016), Bondora newly introduced the so-called New Portfolio Manager. This new portfolio manager seeks out and invests in loans automatically. It is well. On the other hand, the percentages it offers are not as high as they used to be.

That’s why I personally still work on the basis of manual selection of P2P investments / loans and I still have the new portfolio manager deactivated. Also thanks to that, I kept the appreciation above 20% for a long time, in the second half of 2016 I fell to 19%.

As can be seen from the chart, only 2.7% of loans are overdue. Manual selection of suitable loans for investment of course costs some time, on the other hand you can learn and offer juicier fruits 🙂

Those interested can use my affiliate link and also get 5 Euros for free on the first investment .

If you top up your money on Bondor, then don’t forget to use TransferWise (it’s cheaper than bank transfer).

Experience with the Mintos platform

I can also recommend the Mintos platform to those interested in P2P investing. This is currently rated by a number of small investors as the best option for investing in P2P loans (safest / most profitable). The yield here is within 10% – 14% per year, I reach the level of 13% per year. Read my full review of Mintos . If I started with P2P investments again today, then I would choose Mintos as a priority.

I am currently investing through both Bondora and Mintos and plan to continue as part of my diversification strategy.

HYIP investment

At the end of 2015, I learned about various HYIP investments. It is a high yield investment program. These HYIPs offer a hell of a lot of percentages. On the other hand, the vast majority are scam and fraud. It is not easy to tell whether a program is real or not. The vast majority of HYIPs work on the so-called ponzi scheme (pyramid subtype). The profit is paid to investors from the investments of new members. As soon as the influx of new members ends, HYIP will wrap it up and run away with the money. If you didn’t have time to choose, you’re out of luck.

HYIP offers a high percentage of profit, but it is very risky.

There are also those who look for HYIPs and simply invest in a dozen of them. They diversify in this style. They earn a couple for a couple. They do pre-investment analysis and try to choose the ones that turn their money back on.

I invested in a few HYIPs. I always follow the principle that I only invest money that I am willing to lose. Here in particular. Here day to day to lose. The end of HYIP is fast and the moment one user writes that it is not possible to withdraw money, it usually does not start. And this screen follows.

Yes, I already got one HYIP, and it was this Pokeram. Although it worked for two years, the boys just wrapped it up one day. It’s a risk, you enter HYIPs with that.

All HYIP programs will end sooner or later. And recyclix was neither the first nor the last. In this context, I recommend reading the interesting article HYIP’s Devil’s Investment in the Unknown .

Bitcoin and investing in cryptocurrencies

Bitcoin is a virtual currency based on blockchain technology ( wikipedia definition here ). I am a technology enthusiast, a graduate lawyer (diploma thesis on the topic of cyber security) and I have been in business since high school. I am aware that Bitcoin is not perfect, but I believe in it as a payment unit that has a future and will gain its place – sooner or later.

I invest part of my investment in cryptocurrencies. But it is the part that is intended for speculation. This is not the money I will ever need. Corrections of tens of percent, even 50% or even 90% downwards, are normal in the cryptocurrency market!

I recommend the Binance exchange for the purchase of Bitcoin and other  cryptocurrencies . Low fees, fair rates and very liquid. Binance is considered by cryptocurrency investors to be the best stock market. Register via a special code , which will save you 10% on fees.