Happy New Year! 5 ways to help you achieve your saving goals in 2019
It’s New Year’s Day, and many of us are already masterminding our plan to ensure 2019 is THE year!
The current marketplace makes it not only difficult to put money aside but also a challenge to earn much on any savings. If you plan to invest more in 2019 like 42% of people that responded to our recent survey, the best way to make that happen is to set an exact amount, stick to it and know your options!
Here are 5 handy tips from the Kuflink team to help 2019 be your most prosperous year yet:
Create a savings plan
The first thing you should do is make sure you know exactly what you’re working with. Calculate all income, including any partners that you might pool money with. Then, work out all your outgoings, separating the essential (mortgage, credit card payments, food etc.) from the luxury (yes, that rarely-used gym membership counts!). This will make it much easier for you to plan where you could save, and how much.
Know your options
You don’t need to be an investment expert to maximise your savings but you should be prepared to spend time researching options online. Factor in the type of access to funds you’ll need, the length of time you want to put money away for and understand risk vs reward when it comes to interest rates. Whether you invest through your bank’s everyday savings account, an Innovative Finance ISA, bonds & shares or any other means, check the terms before committing.
Set Realistic Goals
Have ambitious goals but avoid setting the bar too high, for both how much you can save and the amount of interest you’ll make. Over-committing may cause frustration and steer you off track with your savings plan and overall goals. It’s important you set a little spare money aside each month to enjoy yourself and account for any unexpected costs that might pop up. Consider diversifying your savings if you’re looking at higher interest rate options.
Be Determined
There are months where sticking to your budget will be hard, maybe even impossible, but that’s not an excuse to throw it all out the window. Remember why you’re doing this and make sure any ‘bad’ months are followed by a great one! It’s better to reach your goals a month or two later than not at all.
Be Happy!
It’s okay if your goals or circumstances change throughout the year and your budget needs reviewing. Remember, a budget is exactly that; it isn’t a life plan and it shouldn’t be making you miserable. There are lots of pocket-friendly things to do with friends and family that will keep a smile on your face whilst you focus on saving.
P2P lenders increase security measures to protect investors
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Kuflink Boosts Interest Rates on ISA and Auto Invest Products
Peer to peer property lender Kuflink has increased their interest rates on both the Innovative Finance ISA (IF ISA) and their auto-invest products.
Added assurance
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How to be a Smarter Investor: Interview with Financial Thing
A familiar face for many savvy peer-to-peer investors, Financial Thing founder Laurence Samuels describes himself as having ‘a passion for helping others to figure out what took me years to learn’. So, when Laurence visited the Kuflink offices earlier this year, the team knew it was the perfect opportunity to share some of his insight and experience with our investors.
From the FCA review to the international market, Laurence spoke to us about key issues within the peer to peer space:
What are the top 3 things you look out for when researching a potential new platform?
LS: Do the returns offered equal the risk levels? Do the loans and lending products make sense? How is the company funded and how will it operate through the start-up period of losses? How and when will the company become profitable?
I look at the company’s Directors’ experience and the teams experience in regards to the products being offered. Do they have loan underwriting and default recovery experience?
In light of the recent FCA review, what are the key points for change you’d like to see within the P2P industry?
LS: I agree with many of the points inside the FCA review, particularly about risk levels being difficult to quantify and how provision funds provide investors with a false sense of security. One bad loan on a platform could wipe out an entire provision fund and then what?
I’d also like to see far more transparency. Easily downloadable total loan books showing what the spread between lender and borrower interest rates so the risks can be evaluated. Also, an emphasis on more detailed risk explanations. People need to understand that returns don’t always accurately portray the possible risks and that defaults will happen and are an unfortunate part of P2P and not to panic when they occur.
People must understand that default recovery can be a long process, especially when property is involved, and that capital losses are possible. I believe P2P platforms should be required to show loan spreads between lender and borrower so lenders can assess risk.
What do you think are the key difference between P2P investing in the UK and the US? Is there anything the UK industry could learn from the US?
LS: In the USA, the big P2P players in the market (Lending Club and Prosper) have had the benefit of being publicly traded so there tends to be a little more public awareness. Having said that, from my interactions with the general American public, P2P is still an unknown investment vehicle. Some of the high entry investment costs have created a difficult entry barrier for your average investor.
The UK is much more investor friendly with lower cost entry barriers. The main thing for the UK industry to learn is improved transparency. Some companies don’t have easily accessible loan books or statistics. The USA is regulated by the SEC which is quite stringent.
Why do you choose to invest in P2P, as opposed to more traditional options such as stocks and shares or property investing?
P2P makes up about 15% of my investment portfolio along with index trackers and property. I use P2P for diversification purposes to reduce risk. I believe P2P has a place in most investors portfolio’s but no one should ever place too much money into anyone sector.
What is the biggest or most important thing you’ve learned from your P2P investments so far?
Don’t chase the highest returns because even the best loans on paper can go bad so diversify, diversify, diversify. I’ve learned how important it is to spread investments across many loans and peer to peer companies.
Want to find out more about what happened when Financial Thing visited Kuflink HQ? Watch Laurence’s video of his time in Kent here!