With interest rates still, pitiably low there’s little wonder that savers are looking for new, low-risk ways to make their money work. Taking those first few steps away from the safety of the stagnating bank account and into the more vibrant realm of speculation can be scary for the DIY investor, so unless you’re a secret thrill-seeker searching for a little jeopardy to get your kicks, it’s important to find an investment medium that can deliver comfortable returns without also delivering a daily heart attack. If that sounds like you, then P2P (peer to peer) Alternative Investments could be the answer.

If you’re not already familiar with the concept, P2P alternative investment is the process by which borrowers who are unable (or unwilling) to gain funds through traditional banking methods – such as new business startups, or individuals without property or capital to use as security – have their lending needs to be fulfilled via crowdsourcing. Individual investors can select which loan propositions best suit their criteria, and then fulfill as much or as little of the loan request as they wish. In return, they receive a proportional amount of the borrower’s monthly repayments, until the loan and the stated interest rate are paid in full, leaving all parties happy.



How P2P Loans Have Gained Momentum

P2P alternative investments began as a neat solution to the straitened banking systems following the financial crisis. With new legislation preventing banks from issuing loans to a huge number of potential borrowers, people were left to search for alternative financing means. At the same time, savers were experiencing catastrophic interest rates – just 0.25% from 2009 to November 2017 – meaning that everyone from retirees used to living off their interest, to young families saving for a mortgage, could do nothing more than watch their savings dwindle as inflation and the cost of living crept higher and higher.

P2P alternative investments provided a perfect solution, allowing borrowers to access the cash they desperately needed, without having to turn to the exorbitant interest rates of payday lenders, while investors experienced gains that no bank could hope to compete with. It is this mutually beneficial relationship between borrower and investor that made P2P such an instantly successful model and has seen the market grow and grow. From a base of nothing in 2011, it is estimated that the global P2P market will be worth US$1 trillion by 2025. Most experts are now positing that the market will continue to grow and grow, meaning that there will be no return to the financial autocracy of the banking systems prior to the 2009 crash. No wonder so many people are becoming involved.


How to Start in P2P

With P2P providing such a stable market, it makes the ideal base from which to begin an investment portfolio. It’s quick, it’s easy, and because you can do everything yourself – no need for brokers, or even much knowledge beyond plain common sense – there are no hidden fees to eat into your return.

To begin, you simply need to create an account with a P2P investment platform, deposit your funds and then look through the list of available loans before selecting where to put your money. The process really is that simple. Of course, it does come with some risks, but if you research your platform and select your investments wisely, you can easily mitigate those risks to a point of inconsequentiality. That’s the real key to success, but how do you even start to find the door?



How to Succeed in P2P Investing

While, when it comes to any form of investing, there is no fail-safe formula, there are steps that you can take to first, protect your assets, and second, to increase your chances of a worthwhile return. Some of these steps can be applied in broad brushstrokes to all forms of investments, others are more specific to P2P.

If there is one single golden rule of investment success, it has to be diversification. While everyone knows the adage of not putting all of one’s eggs into a single basket, it can be easy to forget the sense of this when you think that you’ve found a killer investment. The thing is, even if something looks like a sure bet, you can’t be absolutely 100% certain that it’s going to succeed, so even though, for example, we’re completely positive that the FAST INVEST is going to be a huge success. This is not just shallow saying, we can prove it:

  1. MoneyBack Guarantee. The platform offers a unique MoneyBack Guarantee that investors are not used to. If anyone decides to stop investing at any loan, FAST INVEST will buy the investment back in one day. Investors do not need to worry about their assets for a month or two anymore. They can receive the funds immediately. After selling the investment investor receives all of the principal sum.
  2. Lowest entry level €1.  At FAST INVEST customer comes first.
  3. BuyBack Guarantee. All loans in FAST INVEST pool are protected by a BuyBack Guarantee. It is evident for us that all investments carry some risks. There is a possibility that the borrower will stop paying his repayments for multiple reasons. We making sure that our customer's investment would be safe by compensating the payment if a borrower is ever late on scheduled loan payment just for three days.
  4. High ROI up to 16%. FAST INVEST has one of the biggest Return On Investment in the market. We offer interest rates from 9% up to 16%. According to 2018 results, investors received 14% return on their investment compared to 12.78% in 2017.

We still wouldn’t tell you to put every last penny into it, simply because it doesn’t make good business sense to put all of your assets in one place.

Diversification can spread your risk so thinly that if done properly, any potential losses will be completely absorbed by your gains, so you won't even notice that they've happened unless you look into the paperwork in detail. So, if you’re thinking of starting investing with 100, split it between five different opportunities – whether five P2P loans or a mixture of digital and fiat options – that way, if one fails, the other four will cushion the blow.

Depending on the type of investment that you opt for, there are also a variety of tools available to help maximize your return. Many people prefer to retain complete control of their assets, which is fine, but if you’re leading a busy life you can often miss out. Auto Invest tool – such as the one developed by FAST INVEST – use algorithms to recognize new potential investments based upon user’s pre-selected criteria. This means that your money is never idle – in P2P, for example, when your monthly return gets paid, it can be automatically reinvested in a new opportunity, and thus your income continues to grow, while you continue to go about your normal business. It’s one of the quickest ways to generate a passive income.

Once you’ve settled on your investments your focus needs to shift to your net return; this is how you will be able to ascertain whether your strategy is working. Because P2P is a slightly slow-burner (although most contracts are only 1-12 months) it’s best to leave a short time before studying your returns; twelve to eighteen months is ideal, as this will give your original investment time to mature and complete, so you’re able to take an overview of the entire cycle.



Carry out the following equation:

  • Take the current value of your assets and deduct the original value (or the value at the start of the time you’re reviewing), then minus any fees incurred.
  • Divide this figure by the original value, then multiply that by 100%.
  • That will give you your basic rate of return. For your true net return, however, you will also need to deduct the rate of inflation for the investment period.

This equation will show you exactly what your investment has given you in real terms, allowing you to make an informed decision about whether this form of investment is working for you.

There are lots of external factors that will influence the above, many of them will be entirely out of your control – such as the economy and the borrowers you’re working with – but one of the biggest influencers is one that you can manipulate; the platform you are investing through.

Different P2P lending investment platforms charge different fees and offer different protections and different rates of interest, so it’s important to look carefully before you place your money, as surface numbers are rarely what they seem – even a promised 20% ROI can be quickly eaten if the platform takes a 19% cut.

P2P alternative investments are not inherently risk-free. Neither does it guarantee a high rate of return. As an investor, you have to play your part. It’s down to you to research what’s available; to look at the fees and securities that are on offer; to spread your investments to avoid having them be swallowed whole by an unsuccessful venture, and to utilize the tools available to you. If, however, you do all of these things, you stand a really good chance of making yourself a passive income that’s really worth the having. Give it time, reinvest your interest, make every cent work for you and before too long your original 100 will have numerous new friends to play with.