Portfolio overview and crisis stock buys.

Overview

In general my portfolio is divided between 6 investments. All these are somehow become part of my portfolio overtime. It has not been a plan all along but rather process. stocks-1100x733I read about something, then analyze and make a decision how this investment fits to my current portfolio. So over time some has landed into my portfolio. Since the beginning I’ve never sold any of my investments yet. I have some plans to sell off some of my stock, but they are too cheap currently. Mainly I talk about the stock I bought when I started investing. I call them schooling buys.

Over the last years the proportions of my investments have changes but currently they have stayed like that:

Stocks Real Estate Bonds Omaraha Mintos Cash
44,82% 20,84% 14,35% 3,87% 14,09% 6,41%

Every part of investment has it’s purpose and goal.

Stocks

Stocks are my prime source to get rich investing. They are long term investments and I don’t expect them to pay off yet. My main strategy i

s dividend (growth) investing. Why I put grow into parenthesis? Currently all my investments are not dividend growth, some portion of my stocks are currently high dividend payers and I don’t expect them to grow dividends much. These high dividend payers help me to get some cash flowing and buy more dividend growth stocks.

All my stock investments are in EUR. I’ve thought about USD stocks as well, but I just don’t have enough capital for it. Earning couple of dollars in a month and taking currency risk? Not worth to me at the moment. Plan is to build my Baltic stocks position to reasonable size so the snowball will roll itself and then look to North-America market. Plan is when I do that, I’d like to have enough resources to be able to invest about 1500€ after every 3 months to dividend growth stocks (dividend aristocrats).

Real Estate

All my real estate investments are pretty much on one real estate investment fund. So in that sense I don’t own any real properties. The good returns of REITs have well fed my passive income stream lately. At some point I plan to purchase some properties as well, I would expect them to give me 20%+ return so the struggle would be worth it. Seems to me that this kind of returns are possible in my home town.

Bonds

Bonds are a way to stabilize income all the time. I see that they offer good and stable interest income, which also helps me to purchase more dividend growth stocks.

Omaraha

Omaraha have had some good returns lately. Way more than Mintos has. But it doesn’t work like Mintos, there is no second market, no buyback guarantee, but loan interests are high and there is fund which pays for bad loans, currently because of crises you get back 55% of money, it was 60+ before. But instead of all that I’d like to put there more money, to get good returns and get money flowing there.

Mintos

Mintos still is my highest and most stable moneymaker. Currently I don’t plan to deposit more money there since, but I sure invest there. There are some nice high interest loans from good stable loan originators available currently on primary and secondary market, I sure want them into my loan portfolio. If you like to you Mintos aswell and get part of the money flow, click here and you get some extra returns: reference link to mintos.

Purchases

I’d like to buy more stocks thats for sure. And I want to buy them cheaply. Also I plan to equalize mintos and omaraha portfolio sizes, just to stabilize money returns. I don’t plan to withdraw any money from mintos, but rather deposit to omaraha.

How I use dividend growth strategy

What is dividend growth investing anyway?

The main idea of dividend growth investing is simple: you buy stocks that have been growing dividend payments significant number of years. Your passive income from dividends will grow year after year even if you don’t add any money to your portfolio. It’s a long term strategy that usually pays off after years of investing. We talk here about 5+ years since the initial dividend yield on stock might not be perfect and stock price growth might not be so rapid as for growth company stocks (Tesla stock might potentially grow way faster that coca cola). But this strategy is all about long term and when it starts paying off, it will pay off greatly.

How I pick stock for dividend growth.

First of all, I look companies that have grown dividends more than 15 years. Some look 10 years, but I want to be sure that company did well during last financial crisis and continued it’s dividend payments.

Secondly I want my dividend yield to be at least 5% after 5 years. I try to estimate somehow potential dividend amount after 5 years.. This is kind of difficult to do, I take into account how much dividend has been growing last years, how well company does financially, what is it’s payout ratio.

How I take advantage of this strategy

My criterias buying dividend growth stocks are:

  • Company has been growing it’s dividend payments at least past 5 years.
  • Dividends after 5 years at least 5%, preferably more.
  • Net income/revenues of companies has been growing last 5 years.
  • Dividend payout ratio is not above 80% (actually the lower, the better).

Currently I have only few companies bought following dividend growth strategy, but I’m planning to increase it heavily and make it my main strategy. On Baltic stock market it’s nearly impossible to use this strategy and diversify your portfolio. So I have to move to foreign market – US, Europe etc. But first I’d like to get snowball rolling on Baltic market for good, and mainly there are still good deals lying on the ground to decrease my stock cost basis.

2020 Q1 Results

So it’s been a while and first 3 months of the year has been passed. Earnings has been quite ok, totaled 217,04€, it’s 56% more than year before, so percent wise it was quite a success. The biggest contributor were dividends, payed by LHV and Baltic horizon fund. Lately I’ve been also increasing my omaraha position.. it contributed with 11,50€ during these 3 months, new record.

In future/currently I have a plan to increase my Omaraha even more a bit, but I try no to be too bold, since we are in crisis and  horribly lot loans can go bad. My main target currently is to get good stock deals, I’ve got some already. Have increase my all positions. Dividend future seems good, only one of my positions – baltic horizon fund cut it’s dividend, basically halved it. It affects my yearly passive income target quite considerably – I hoped to earn more than 300€ from there this year, lets see if it will happen or not.

Crisis or not, my target is still to increase monthly average passive income more than 75€ per month. At the end of march it was 71,14€, at the beginning of year it was 64,64€, so at the moment it’s +6,5€. Not a big increase, but spring is dividend season in Estonia, lets hope, it will be good season and next time increase will be bigger.

Also someone has used my Mintos link! Makes me really happy, whoever used many thanks 🙂

mintos reference

My 2019 results

So how my 2019 went on investment fields? First and most important this year i earned a lot more passive income than last year, 4x more than 2019, isn’t that great?

2018 163,07 €
2019 775,72 €

So where did all this money come from? The biggest amount came from dividend money, 429,79€ in total, second was Mintos with 208,19€. Bonds gave me 120€ interest money and Omaraha 17,74€. On average I earned 64,64€ per month, which is 51,05‬€ more than 2018. Next year i’d like to increase that sum by 89€ like I said in last post, so 2020 dec, I hope to see about 153€ average. I look this number and it looks crazy big, about same amount I earned total in 2018.

Where did I put my money.. Some went to Mintos some went to stock. About stocks. I’m happy I made better investments than 2018. Mostly because I was way more patient than back then. I waited more, because since I hunt dividend money and Tallinn stock market pays them only once a year mostly, it makes sense to wait low price. So my biggest investments, LHV, Tallinna kaubamaja and Baltic Horizon Fund were well timed and I bought all of them at low points and reasonable with price. By default it should mean bigger dividend earnings on 2020, if dividend yields stay about same.

My plans for 2020 are roughly same than 2019, but I would like to put some more money to LHV, bit more to kaubamaja, but not much. Also would like to put more to BHF, so I earn about 100€ per dividend payment.Additionally I’d like to double the earning from mintos, and at the end of year maybe take a look to US market, depends on how much money I’m able to contribute/earn form dividends and prices on market. Next year seems to be great investment year for me, whatever the market does, since numbers get real and passive income next reaches levels.

My 2020 year targets.

1528928202019 is starting to end, I’m not wrapping it up yet since there’s still some time left this year. But it’s time to look what i want to accomplish 2020 year investments. Without targets it’s hard to keep track and get something big done. Lets see what my hopes are related to next year.

So my first and most important goal is still to increase passive income. As I look average salary statistics, I see that 2018 to 2019 it increased in Estonia by 89€, quite a big increase. So this will be my goal next year, to increase my passive income per month more that Estonian average salary did. I know that I did increase it way less this year, but I’m positive about next year and you have to set high targets to achieve something.

Second target is to increase my portfolio size to 25k and this will be quite a target. When I started investing 10k+ portfolio already seemed huge and everything beyond that unimaginable, now 25k look not that far and unreachable. I already wait what sums look also reachable in future, do really in a year or so something like 50k looks doable? It also means quite a sizable portfolio already and something that would be hurtful to loose.

On that last note, my third target will be to read at least 3 books about investing. Just to get smarter and learn how to not loose money, heh this should be the first goal anyways – not to loose money? Why not to read more? Well I definitely want to read more, but lets be realistic, I’m not that good reader and 3 seems reasonable amount to put as a goal.

Third and final goal would be to find third source of income (I already have passive from investments and active as a job), doesn’t matter how much it will make money, just should get some extra.

Will I make my goals? I’m the most pessimistic about increasing my passive income that much, since this year it increased about more than 52€ (don’t know exact number until the end of month). But hey, that’s way bigger increase than 13,59€ from 2018. But I have some plans how to roll snowball faster. On that note, marry Christmas. If someone wants to make Christmas present to me here’s Mintos reference link you can use to earn money.

The challenge and 3rd pillar.

Haven’t really had time to work with the challenge since I fell ill. Sad. Will do that next year probably. But all in all I had/have some ideas that i make to reality soon. Oh by the way, today I opened my 3rd pillar pension fund. Now I’ll be rich when I retire.

So why I created 3rd pillar? According to current laws I will be able to take out money from there at the age 55. So how i imagine my life at that age? I definitely don’t want to work at that age but rather enjoy like, maybe I have kids and opening pillar then seems like a good moment. Also there is great tax credit, you get back you income tax from the amount you put in, basically you get back 20% of the money you but it, seems like a great deal to me, basically free instant 20% yield on investment.

I chose “Tuleva” third pillar, 100% stocks.

1 hour per week working towards to becoming entrepreneur.

This Month I start a new challenge – 1 hour per week working towards becoming entrepreneur. No goals of earning anything, nothing, only rule is that this 1 hour cannot be theoretical work, but all practical. I’m going to write here every Sunday what I did and, so if I write nothing, shame on me. I hope all this brings me closer to goal – earn income from my own company.

How starting investing changes my mindset.

On Friday I walked home from a work and I was quite exited. Not because it was end of week (well obviously it was, but that was not the reason) or because it had been the payday (it’s in couple of week), but because it was time to calculate how much money I’ve earned this month from my assets.

I still remember 10th April 2018. The day I earned my first dividends, I had been waiting it for whole year. I knew the amount and the day already about two months earlier, but seeing the number on my bank account was totally different feeling. Somehow I like numbers, they create a kind of special feeling, a measurable feeling. Since that day I have a excel sheets where I calculate different things about my investments. Passive income, total assets, how much the assets increased in that month etc. I fill it monthly (ok to be fair sometimes more often since I’m too impatient). Since then the end of month is the day I usually wait the most, it wraps up the month and show how much I do better than year ago, even months ago. And if you see you do better, that’s a great feeling.

I suggest everyone to have a excel sheet where you calculate something. First good thing to calculate is to “emulate” balance sheet that big companies have. But you assets, liabilities, income etc. there and see how you are doing.

Oh and if you want to earn money, up to 1000€ use my this link ti sign up to Mintos, put some money there, invest it, earn about 12% of returns and up to 1000€ bonus money.

Financial freedom

Today I had a bigger thought what financial freedom means to me and I came up 3

  stages:

  1. Passive income takes care of my monthly payments (rent, internet etc.)
  2. Passive income takes care of food.
  3. Even I quit work my investments continue increasing comfortable amount.

Part 3 is subjective, but i found that i would be comfortable if my passive income increases faster than Estonian average income. Basically it means I’m still getting relatively richer every year.

Now how far away I am from financial freedom? I calculated that my monthly payments, all together last month were 406,92€. What is funny/sad, I did not

 know that before, I kind of expected it to be more. Also after calculations, I saw many places I can decrease it without decreasing quality of my life. To change my quality of my life, I could probably get rid of about ~50€ worth of expenses, but some enjoyments has to stay (netflix, nice gym, spotify). I guess my monthly expenses are quite minimalistic, but not too much.

Additionally I calculated my biggest fears… expenses on food stores, bars and cafes. Horrors were not real. Even though I eat daily on cafes my expenses were ok, I could do better, but they were even less than I expected. What probably contributed to it is I’ve drank significantly less alcohol lately (mostly enjoyed free booze on company’s parties :D). On food stores I spent about 10€ a day… Not that much, but I think I could do better. I really want to control more what I eat, make it healthier and cheaper.

So all in total.. how far am I from level one financial freedom?

maxresdefaultLast month I calculated that last 12 months I have earned on average 59,77€. So I’m 14% of level 1 financially free. But now when I know my exact monthly expenses the freedom feels way more closer and it helps me to get closer and closer to it. What I like most about my quite minimalistic financial life is the amount of thought I’ve put my purchases lately. They are not random things I buy, I have a list of think ordered by significance of life improving effect. For example my number one is currently new dishwasher. To me minimalistic life means I think what I buy and think twice if I will truly use it and how it improves my life.  

My Mintos short-term loan portfolio

Long term loans are loans I like most in Mintos – get loans with good interest rates with good borrowers, who pay their loans back conscientiously. But lately it’s been hard to get out loans like that… I checked my loans and last time something was bought on primary market was in June. So I created short-term portfolio. What are the criterias to loan originators you may ask.

  • Buyback guarantee – I want to be sure I don’t loose any money.
  • They pay interest on delayed payments – most important thing if you invest on short-term loans. Loans you invest in are short, about a month, if you get a loan were borrower does not pay, you don’t want to wait 2 months to get your money back.
  • Grace period under 3 days – I don’t like if loan is in unknown state for a long time.
  • 70%+ loans are in current state – Indicates that originator has good business going on and also lowers my own chance to get bad loan.
  • Secondary market – take advantage of the fact that you payment date is earlier for you than it was originally.

And that’s all. As you see I don’t distinct Mintos rating or interest rate. All the loans orinators place B- to B+ range in Mintos – no A ratings. As you also notice no minimum interest rate. I kind of think that maybe I should add it, but in reality I don’t think it’s too important, since the whole idea of my this portfolio is to get money out and earn atleast something. So I ended up with this list of loan originators:

Loan originator Country
AlfaKredyt Poland
CashWagon Philippines,Vietnam
CreamFinance Czech Republic, Spain
Dineo Spain
ITF Group Bulgaria
LF Tech Kazakhstan
Lime Zaim Russia
Metrokredit Russia
Mozipo Group Lithuania
Peachy United Kingtom
Sebo Moldova
Varks Armenia

If you want to copy this portfolio, be aware of the countries… Loan originators have different loan structures on different countries. Also if you want to earn more i suggest to set minimum interest rate on your autoinvest portfolio. And don’t take this table as final truth it’s just how my short-term loan investment portfolio looks like.

If you want to invest too, use my reference link by clicking here.