It is time to learn something new from the industry stars! This time we talk with Denny Neidhardt, an investor and a founder of re:think P2P community.
Lendermarket Stars blog series are interviews with Lendermarket investors, financial bloggers, and influencers. Here we talk about Lendermarket investors’ experiences, learned lessons, and different investment philosophies. Hope you will enjoy reading!
1. Tell us a bit about what you do and your blogging journey.
Hi! Thanks for having me for this interview.
My name is Denny. I am a 32-year-old German citizen, originally born and raised in Berlin. Since October 2018, I have been self-employed, working on several online projects. One is my finance blog rethink-p2p.de, which I started around that time.
Ever since, I have frequently been posting new articles, mainly on a weekly basis. In addition to that, I also record videos, which are then published on my YouTube channel.
2. How many P2P platforms do you currently invest in? And what’s your P2P investment allocation within your portfolio?
At the moment, I have an active investment portfolio with seven different P2P platforms.
One is currently on hold and three are expiring. My P2P allocation is currently making up 10-15% of my entire portfolio.
3. What do you see as the main challenges in P2P lending right now?
On the investor side, it is continuing to understand the risks that can materialize within this asset class. I think the last few years have taught many of us a good lesson about what is essential when ensuring a stable P2P lending portfolio with a steady return.
On the platform side, I think it is to stop taking short-cuts when it comes to the security of the platform and the safety of investors’ funds. A more cost-efficient approach is undoubtedly helping to make the numbers look better in the short term. But to grow as a platform requires trust – and that only comes along with the mindset of investing in the stability of the platform first.
4. How are P2P platforms evolving and responding to these trends?
It is hard to generalize since there are too many platforms out there. My overall impression is that a few outlets have understood what it takes to impact the industry and act accordingly. They offer transparency and a legit business approach to gain investors’ trust.
Yet, too many platforms are still trying to go the easy way and collect dumb money with the least effort possible.
5. What changes do you expect in the P2P lending market in the next five years?
I think the COVID-19 pandemic was necessary to consolidate the market a bit and see which platforms can be trusted more than others.
As for the future, I think the focus and attention will concentrate on a handful of ‘go-to’ platforms. Unless new and upcoming platforms offer a different angle and an innovative business approach, it will be hard for them to attract investor funds on a large scale.
6. What are the advantages of P2P compared with other investment options?
It depends on the asset class that you are comparing it to. For me, P2P lending means a low-level entry barrier regarding sign-up requirements and minimal required capital – both significant advantages compared to traditional offline real estate investments.
On the other side, I also enjoy the high cash flow predictability, which is a nice touch compared to stock investments, at least with shorter investment timelines. Finally, there is also the liquidity that most platforms offer with their assets – a bit of flexibility surely doesn’t hurt!
7. In your opinion, what is a sustainable return a lender can realistically expect through peer-to-peer lending investments?
I would say between 8% and 10% per year.
8. Do you think people invest differently in the DACH region compared to the rest of Europe? If so, how, and why?
I think Germans tend to be quite conservative when it comes to investing.
However, I feel like the new generations are more and much better educated regarding financial-related topics – but I have no idea how that compares to the rest of Europe.
9. Philipp from “Invest Diversified” left a question for you: What do you think about holding cash nowadays?
Good question. Obviously, it is not ideal in times of high inflation. Cash can help to invest in asset classes when they seem underprized. At the same time, one should always understand the bigger personal picture and possible obligations that can arise.
In life, you never know what is going to happen. For this, I always keep a cash position in case it should be required. This way, I am not forced to liquidate my long-term investment positions.
10. And last but not least, in order to continue with this chain, leave a question for our next interviewee to answer!
Do you prefer to eat chocolate from the fridge or at room temperature?
Hope you enjoyed reading Lendermarket Stars series with Denny! You can check Denny review on Lendermarket here.
By the way, feel free to leave a question for our next interviewee in the comments.