The Full English Accompaniment – Crowdfunding maturing

What’s piqued my interest this week?

Over the past few years I’ve watched the crowdfunding field grow, with various platforms and companies gradually expanding into robust and trusted investment sources. I’ve thought about trying Crowdfunding investments before, the 2011 Brewdog prospectus still sits on my old laptop, but I’ve always been dubious about the liquidity. As a student I chose to spend my cash on beer in my hand, rather than beer in a portfolio. Other bloggers did invest, and have been stuck trying to reduce their exposure and sell up (1). Due to this liquidity risk I lump all crowdfunding and P2P investments together, including all of the stock, property and loans in one big, high risk, ‘invest and don’t expect to get it back’ bucket. They’re all basically junk bond grade investments. The percentage returns on these investments supposedly account for this risk of losing your money.

I think my concerns are largely justified. If you look past the odd moment a few months ago when Seedrs stopped it’s own investment round due to it’s own rules, there’s been plenty of warning signs (2). We’ve had Lendy’s collapse, and there could be more on the way (3, 4). In response the FCA is bringing in new rules to clamp down on poor practice and protect investors (5, 6). The P2P and Crowdfunding market is maturing, less wild west. P2P and Crowdfunding is going mainstream (7, 8).

So, if everyone’s doing it, I might as well too. I decided it was time to start dipping my toe, as part of my satellite active investments. But for me this wasn’t about attempting to increase my returns with a >10% P2P loan, like the one Monevator affiliated RateSetter offer (9). This was about getting in on the ground floor, like I coudla-shoulda-wounda with BrewDog, with a small amount of throwaway money. I was tempted by a number of options: MoneyDashboard (too many competitors, unclear valuation and monetisation strategy) (10, 11); Curve (not happened yet) (12); Tickr (too many competitors, unclear valuation) (13). I became aware of the gameification of crowdfunding investment, and the methods employed to prey on the ‘fear of missing out’.

My first Crowdfunding investment went on FreeTrade. I missed out on the earlier round after the glitches meant it was closed before I could complete (14). I got in with a small, test the waters, investment sum on the June round (15). This means, like Weenie, I have free stocks to share (16). I have concerns about FreeTrade, not least the proliferation of other free trading apps, and the recent move of Robinhood into the UK (17, 18). If it goes tits up, then I put in enough to be along for the ride. Invest, forget, and definitely don’t bank on the returns. (And if you want a free share, contact me or leave me a comment!)

Have a great week,

The Shrink

Other News

• Metro, for it’s financial woes, is top of the customer service rankings (19)
• House prices falling in the south of England (20)
• And more generally pre-Brexit (21)
• But mainly in the most expensive cities, as cheaper areas continue to slowly increase (22)
• Chase bank pulls out of Canada, and cancels all outstanding debt in the process (23)
• The Government has suggested a fix for the NHS pension problem, but only for doctors. Another wedge amongst professionals (24)
• With the fall in the pound an interest rate is now on the cards (25)
• More markers are pointing to a recession (26) – Reminder that no marker has reliable predictive value
• Trump continues to get pissed off that the Fed won’t dance to his tune (27)
• “We bought national insurance stamps but didn’t follow the rules, and now we’re pissed off as the Gov won’t give us any money” (28)
• Investors who put money into Kevin McClouds business may lose everything. Proving again that being a well-known face don’t mean squat in business (29)

Opinion/ blogs:

• The Guardian editorial team on Brexit and the economy (30)
• The Guardian also has this piece on FIRE (31)
• The article above includes some quotes from MrsMummyPenny, which she clarifies here (32)
• Meanwhile the Telegraph is having a go at guiding people to FIRE (33)
• The FI Foxes have a go at analysing paying down a mortgage early or saving is better (34)
• Monevator has a guest post on investing as an expat (35)
• And a weekend piece on the potential rise in the retirement age (36)
• MMM has a piece on reducing monthly expenses (37)
• UK Value Investor takes a look at Stagecoach (38)
• TEA has a few posts, including this on the milestones on the path to FI (39)
• The benefits of the path (40)
• And a guest post on property as a route to riches (41)
• Cashflow Cop has a go at calculating if you could reach FI by 40 on £40k (42)
• DIY Investor looks at Orsteds returns (43)
• Runs the rule over Legal & General (44)
• And sells up Scottish Mortgage Trust (45)
• Firevlondon has an interesting case example of a route to FI on £40k in London (46)
• Weenie revisits her dogs of the FTSE (47)
• And is advertising a Manchester meet-up (48)
• Dr Fire is also thinking about the governments proposal to raise the retirement age (49)
• And is, like me, enjoying finance podcasts (50)
• MsZiYou is celebrating 25 years as a veggie (51)
• And, amongst many posts this month, has this on the inter-generational unfairness of the property market (52)
• A way to less is considering inheritance (53)
• David at I Retired Young lays out some of his early retirement numbers (54)
• And has a think about why we lie about being retired (55)
• Sam offers ways to live a balanced, simple life (56)
• The Ermine is considering the difference between work and a job (57)
• And has a curmudgeonly rant about modern fashions for metal cards, bullet journals, and the advertising to sell them (58)
• GFF critiques some commonly touted finance numbers (59)
• Pursue Fire has a general update (60)
• I struggle to link to all of Indeedably’s posts. Here he considers new work options (61)
• A great imagined narrative of how the pursuit of FI can go wrong (62)
• And has a go at Saving Ninja’s new thought experiment. Indeedably rejects the premise (63)
• But the Caveman finds it a pleasant journey (64)
• And here’s the original Saving Ninja post (65)

I have no idea which genius made it, but it was worth the creation of Monty Python for this alone. It’s perfect. #BorisJohnson #JeremyCorbyn #Brexit #BrexitShambles #SundayThoughts #SundayMotivation #SundayMorning

pic.twitter.com/XlsFL64qr2

— Brendan May (@bmay) August 18, 2019

The kitchen garden:

• Tanya at Lovely Greens has advice on plants to sow for an autumn harvest (66)
• The Agents of Field have almost got their new garden prepped to go (67)

What I’m reading (affiliate links):

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.

References:

1. https://gentlemansfamilyfinances.wordpress.com/2019/02/13/how-to-put-out-a-fire-use-liquidity/
2. https://www.altfi.com/article/5635_seedrs-suspends-its-own-shares-after-entering-advanced-stages-of-a-new-funding-round
3. https://www.telegraph.co.uk/business/2019/07/28/wake-lendys-collapse-britains-peer-to-peer-lending-bubble-go/
4. https://www.altfi.com/article/5404_dont-panic-but-were-in-the-middle-of-a-peer-to-peer-lending-crunch
5. https://www.fca.org.uk/news/press-releases/fca-confirms-new-rules-p2p-platforms
6. https://www.independent.co.uk/money/spend-save/peer-to-peer-investing-maximum-limit-fca-regulation-a8947886.html
7. https://www.moneyadviceservice.org.uk/en/articles/peer-to-peer-lending–what-you-need-to-know
8. https://www.moneyadviceservice.org.uk/en/articles/crowdfunding–what-you-need-to-know
9. https://monevator.com/ratesetter-high-interest-offer/
10. https://www.insider.co.uk/news/money-dashboard-raises-46-million-18983490
11. https://www.bbc.co.uk/news/uk-scotland-scotland-business-48349943
12. https://www.finextra.com/newsarticle/34273/curve-set-to-embark-on-a-mighty-crowdfunding-campaign/retail
13. https://www.altfi.com/article/5470_impact-investment-tickr-200-crowdfunding-target
14. https://www.altfi.com/article/5290_freetrade-shutters-19m-crowdfunding-round-technical-difficulties-new-round-june
15. https://www.cityam.com/freetrade-to-close-7m-in-second-crowdfunding-round/
16. http://quietlysaving.co.uk/2018/05/25/wisdom-of-the-crowds/
17. https://techcrunch.com/2019/08/07/robinhood-fca/
18. https://qz.com/1684107/robinhood-is-heading-to-the-uk-where-it-will-compete-with-freetrade-revolut/
19. https://www.bbc.co.uk/news/business-49356248
20. https://www.theguardian.com/money/2019/aug/14/south-of-england-house-prices-fall-for-first-time-since-2009-brexit
21. https://www.theguardian.com/business/2019/aug/08/house-prices-fall-unexpectedly-pre-brexit-caution-bites
22. https://www.thisismoney.co.uk/money/mortgageshome/article-7382937/Britains-expensive-cities-including-London-Cambridge-affordable-buyers.html
23. https://www.theguardian.com/world/2019/aug/09/chase-bank-cancels-all-credit-card-debt-for-canadian-customers
24. https://www.thisismoney.co.uk/money/pensions/article-7333403/Government-comes-fix-doctors-pensions.html
25. https://www.thisismoney.co.uk/money/news/article-7341053/Interest-rate-cut-cards-pound-takes-leg-down.html
26. https://www.bbc.co.uk/news/business-49352760
27. https://www.bbc.co.uk/news/business-49452366
28. https://www.express.co.uk/news/uk/1164081/pensions-news-national-insurance-stamps
29. https://www.thisismoney.co.uk/news/article-7385337/Investors-ploughed-cash-Kevin-McClouds-business-told-expect-lose-penny.html
30. https://www.theguardian.com/commentisfree/2019/aug/14/the-guardian-view-on-brexit-and-the-economy-storm-clouds-on-the-horizon
31. https://www.theguardian.com/money/2019/aug/18/meet-people-saving-retire-by-40-fire-movement
32. https://www.mrsmummypenny.co.uk/financial-independence-why-i-think-it-is-unrealistic-and-unachievable/
33. https://www.telegraph.co.uk/money/money-makeover/money-makeover-earn-36k-can-retire-15-years-age-47/
34. https://thefifox.wordpress.com/2019/08/06/crunching-the-numbers-should-we-be-overpaying-our-mortgages-or-investing-instead/
35. https://monevator.com/how-to-invest-as-an-expat/
36. https://monevator.com/weekend-reading-75-not-out/
37. https://www.mrmoneymustache.com/2019/08/22/1000-per-hour/
38. https://www.ukvalueinvestor.com/2019/08/stagecoach-investors-bumpy-ride.html/
39. https://theescapeartist.me/2019/08/06/milestones-on-the-path/
40. https://theescapeartist.me/2019/08/14/heres-whats-in-it-for-you-right-now/
41. https://theescapeartist.me/2019/08/21/getting-rich-with-property/
42. https://cashflowcop.com/financial-independence-reality-check/
43. http://diyinvestoruk.blogspot.com/2019/08/orsted-half-year-results.html
44. http://diyinvestoruk.blogspot.com/2019/08/legal-general-revisited.html
45. http://diyinvestoruk.blogspot.com/2019/08/scottish-mortgage-trust-portfolio-sale.html
46. https://firevlondon.com/2019/08/16/how-to-become-a-millionaire-in-london-on-40k-p-a/
47. http://quietlysaving.co.uk/2019/08/09/return-of-the-dogs/
48. http://quietlysaving.co.uk/2019/08/19/manchester-fire-meet-up-in-sept/
49. https://drfire.co.uk/uk-government-to-raise-the-state-pension-age-to-75/
50. https://drfire.co.uk/my-newfound-appreciation-for-podcasts/
51. https://www.msziyou.com/veggie/
52. https://www.msziyou.com/intergenerational-unfairness-part-2/
53. https://awaytoless.com/inheritance/
54. https://www.iretiredyoung.net/single-post/2019/08/09/Early-retirement-numbers
55. https://www.iretiredyoung.net/single-post/2019/08/23/Why-we-lie-about-being-retired
56. https://asimplelifewithsam.com/2019/08/20/how-to-live-a-balanced-life/
57. https://simplelivingsomerset.wordpress.com/2019/08/08/work-is-not-a-job-and-the-web-of-life/
58. https://simplelivingsomerset.wordpress.com/2019/08/21/monzo-metal-cards-and-bullet-journals/
59. https://gentlemansfamilyfinances.wordpress.com/2019/08/21/6-personal-finance-numbers-that-are-bullshit-2/
60. https://pursuefire.com/pursue-fire-updates/
61. https://indeedably.com/a-goldilocks-decision/
62. https://indeedably.com/meltdown/
63. https://indeedably.com/fools-errand/
64. https://ditchthecave.com/perfect-day/
65. https://thesavingninja.com/what-is-happiness-to-you/
66. https://lovelygreens.com/vegetables-to-grow-for-autumn-harvests/
67. https://agentsoffield.com/2019/08/11/its-all-systems-go-almost/