crowdfunding Archives - Quietly SavingQuietly Saving

The idea of ‘wisdom of the crowds’ has always intrigued me and I’ve parted with a bit of money through crowdfunding, including charity and property crowdfunding, which I posted about here.

My most recent bit of crowdfunding ‘investing’ was when I bought some shares in BrewDog – less to make money, more because I like the product!

Another Crowdfunding Investment

Some of you may recall that when I set my goals in January, I mentioned that I was going to do some ‘trading’ and was on a waiting list for a new app, although by ‘trading’, what I really probably meant was not ‘holding’ long-term.

Five months later, this still hasn’t materialised and while I was waiting, I came across the chance to invest in another app, namely Freetrade via CrowdCube.

The company was looking for an investment of £500,000 – this target was reached in just 12 minutes!

After 28 hours, funding was capped at £3.1m and it became Crowdcube’s most overfunded equity offering ever.

What’s in the Box?

Freetrade has been touted as the UK equivalent of the US investment app Robinhood, which allows you to trade stocks for 0% commission.

Freetrade’s interesting tag line is: “Invest for free, forever.”

Bold words indeed – perhaps the likes of Hargreaves Lansdown aren’t quite quaking in their expensive shoes but I’m sure they will follow the progress of this app with interest.

Its pricing plan is like many of the ‘free’ apps you can download – you get a basic service for free but if you want some bells and whistles, you pay for a premium account – an ‘Alpha’ account in this case.

It’s very competitive though – check out the price list here and it looks like you can buy ‘fractional shares’- not sure how dividends would work in this case though.

There’s been mention that crypto currencies might be available on the app at a later date but I’m not tempted as that’s a gamble too far, even for a gambler like me!

Also, it’ll be interesting to see the app in amongst Monevator’s broker comparison list.

The app is being slowly onboarded (there’s a big waiting list) – my time in the queue will probably be even longer as I have to wait for the Android version of the app but I’ll probably do a proper review once I’ve got my mitts on it and tested it out.

I could be tempted to buy bits of the FAANG stocks (Facebook, Amazon, Apple, Netflix, Google) – why? Just cos it’ll sound ace to my friends – they needn’t know I’ve just got a fraction of a share, haha! Naah, most likely I’ll stick to stocks closer to home.

As you can already gather, I’m likely to just be using ‘fun money’ (ie matched betting profits) for this – right now, I can’t envisage transferring one of my existing ISAs here but I’m excited about the possibility of saving on trading fees for my Dogs of the FTSE portfolio.

Anyway, there’s not a lot more I can say, except that there’s a nifty little Freetrade forum and community building already and I can’t wait to have a play on app!

Enjoy the bank holiday weekend!

[Disclaimer – I have no affiliation whatsoever with Freetrade and this is not a recommendation to download the app (although it is free). There are no referral links in this post, even though I do have a link but all it does is shove me up the waiting list – I think I can wait!]

PS – Everyone GDPR ready?

Here’s a comic strip which sums things up…

Apart from setting up some direct debits for various charities, I’ve not withdrawn or used any of the profits that I’ve made via matched betting. I’ve just let the funds accumulate across my current account, my exchange accounts and the various gambling accounts.

In June, I finally invested £100 of the profits but I opted to do something different. theFIREstarter’s post reminded me of something that I had looked at previously but not gone for – I decided to invest a little in property crowdfunding.

Property crowdfunding “allows people to invest in buy-to-let properties without having to take on the additional responsibilities that come with being a landlord”. So says the blurb. Anyway, here’s a better explanation of what property crowdfunding is all about.

If I had a wedge of spare capital, I would probably be tempted to buy another little BTL property but I don’t, so property crowdfunding interested me when I first heard about it.

Some of the property crowdfunding websites required a minimum of £1000-£5000 investment but I went for Property Moose*, where the minimum investment is just £10.

So basically, you pick an available property from the website, invest your money with a load of other people to buy ‘shares’ in the property. When the property is tenanted, you start earning ‘monthly rental’ based on the number of shares you own.

Rental income seems to vary from around 5% – 7%. With Property Moose, most properties tend to be in the north/northwest, with only a few in London. Said properties tend to be ones which require renovation and you are able to see the progress of the renovations via photos posted on the website. At the end of the fixed investment term (ranging from 1-3 years), the property is sold and proceeds are shared amongst the investors (subject to their share and less costs and expenses), although it appears that investors are able to vote to retain the property for a further year.

Property crowdfunding is not without its risks – I view it along the same lines as P2P – still pretty new, regulated but not covered by the FSCS (Financial Services Compensation Scheme) so I’ll not be investing a huge amount in this.

Since that initial investment, I’ve chucked some more matched betting profits at Property Moose. I think there’s still some life left in investing in property (yes, despite Brexit and the doom and gloom about property bubbles) so will be continuing to build on this investment bit by bit and will update with the rest of my portfolio.

Another Side to Crowdfunding

I came across Kiva a while ago but decided to revisit when I was looking for charities to support recently.

Kiva is a charity platform which aims to support people from poorer countries via crowdfunding loans. Deki is another platform, which I hope to have a look at again.

So how does it work? First, a borrower applies for a loan. Usually, loans are to start or grow a small business, used to go to school/further education or simply to be able to live in better conditions.

The loan, after it’s approved is crowdfunded by other lenders, in $25 increments.

Repayments of the loan are made on a monthly basis and such repayments can then either be withdrawn or used to fund other loans.

My first Kiva loan was to a woman from the Philippines who wanted to build a sanitary toilet for her family…. such things that we take for granted…

So, different sides to crowdfunding – I hope to make some money on the one side, and hope to help improve someone’s life a little on the other.

[*Referral Link – edited 16/09/16]