fixed income investments | how to make double digit returns
TRANSCRIPT
Webinar, June 8th, 2016
How to Make Double Digit Returns with Fixed Income Investments
The #unbank
What are fixed income investments?
Fixed Income Investments are:
“A type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule.”
Types of Fixed Income Investments- Annuities– Generally used for retirement, these are investments where you deposit some initial sum of
money and then you are guaranteed a check a every month after a time period. There are some penalties with withdrawing funds early
- Coupon Bonds– “bearer bonds” The coupon represents annual or semi-annual interest payments to be received until maturity. These coupons must be presented to the issuer to receive payments
- Municipal Bonds– These bonds are backed by the state or local government to fund projects such as highways, school, and hospitals. They have a large minimum investment and return a specified yield after a designated period of time.
- Certificates of Deposit or CD’s– FDIC insured investments that offer fixed rate of return Useful if you are looking for a time-specific savings plan or a low risk investment for your portfolio.
- Money market accounts– These are like savings accounts in you can withdraw from your account a certain number of times per month. They differ because of a higher interest rate and a higher minimum balance. They are also FDIC Insured.
- Treasury Bonds– Require a $1,000 minimum investment. They are fixed-interest U.S. government debt security with a maturity of more than 10 years. Interest payments are made semi-annually and the income that holders receive is only taxed at the federal level.
- Peer-to-peer lending– A high-yield alternative for investors who take the time needed to understand the risks and rewards.
Peer-to-peer lending lets you invest in loans
Loans are fixed income assets similar to bonds
Example3 years15.0% per yearMonthly
CharacteristicFixed term
Fixed interest rateFixed payment
dates
Fixed income assets are balanced in risk & return
“I think astute investors will receive returns in the 8-10% range, with an average return of 6-7%. We know today that many investors are earning more than that, but I think as the industry matures returns will come down. That said, I expect 8-10% returns will be achievable for many investors through the end of this decade.”
Peter Renton
Expected returns in P2P lending are 6% to 10%
How to create your P2P lending investment strategy
Define your personal investment criteria1. Amount you want to invest in P2P lending and the
share of your total investment portfolio2. Diversification level of your loan portfolio3. Time horizon4. Risk appetite5. Region to invest in6. Loan use cases7. Loan base currency
Personal loans for small business owners
Loan amount: up to $10,000Minimum investment: ~ $4Term: 6 weeks to 5 years with
monthly installmentsInterest rates: 10% to 45%
p.a.Comprehensive credit check
via borrowers’ business accounts (eBay, Amazon, PayPal etc.)
Loans are paid out and repaid in the digital currency bitcoin, value is US dollar denominated
Know the options loans give you
Diversification is key to successful investing
➔ Diversification jumps in at around 100 or more loans in a portfolio
Learn from and follow other investors
➔ Find other investors on listed loans and check their public portfolios
Continuously watch and analyze your portfolio
➔ Learn from your ingoing investments and continue doing what works
Don’t invest blindly - define your own strategy and evolve it over time
How to get started
Buy bitcoins easily with a SEPA bank account
➔ Send a wire transfer to a European bank account➔ Get bitcoins deposited directly to your Bitbond
account
Make your first investments
Global P2P lending allows you to earn the returns that banks don’t give you access to