Why are you investing with P2P platforms?

  • Community Manager

    Hey guys, would love to hear you guys weigh in on the decision process you had before investing with P2P platforms!

    According to a poll we conducted over the last 2 months, 33% of people who responded allocate a whopping 20.01-35% of their total net investments into P2P lending.

    We may all have similar reasons - but my basic question to you guys is, why P2P? Why not?

    Curious to find out!

  • Actually it was 20% cash assets. For some reasons, when I was answering that question, i keep thinking about cash assets.

    One day I was having regular coffee sessions with my friends (some are technically mentors to me) We were discussing about passive income streams. That is where I start to realised beside dividend shares and REITs, i do not have another reliable stream of income and hence I will need another stream of income. I know the existence of p2p lending. I went on research on it and was kind of sold to it. But I want to be careful so 20% is where it goes.

  • Well, I just started investing and instead of share trading in which most of my colleagues are doing, I aim for passive income. Other than that, I wish to diversify my portfolio instead of relying in REIT and dividend shares. After doing some reading in internet, I came across P2P in which I was really interested in the concept (I like the fact that I could invest in debt instrument rather than just equity instrument in the share market) and therefore searched for P2P platform in Malaysia.

    As for the >=20% allocation

    Cause when I started P2P, there is less note in Malaysia and more notes in Singapore and I wish to diversify my investment to other countries, so Singapore is a good start. However, Singapore, like Malaysia, also require an initial deposit of $1,000 which is about RM3,000+. Adding the amount with my P2P fund in Malaysia, it had taken more than 20% of my portfolio. Still diluting it slowly though...

  • Community Manager

    @bendahara Hahaha awesome. I see you've decided to start your own thread on this! Really enjoyed reading that piece :)

    Curious to know, have these mentors since ventured into P2P lending as well?

  • Why not. Every book out there says diversify. So I'm just putting a bit here and a bit there. Hopeflly everything comes out at the end in the green.

  • @kaeley-wn

    None of them did

  • @bendahara so you will be the pioneer in the group :) I wish I had financial mentors

  • @lipozami

    Interesting almost like my profile except that I am increasing the stake further instead of diluting it.

  • Community Manager

    @lipozami I see, nice! Thanks for sharing. :) What would be your strategy in diluting it?

  • @cybreed

    They are more like friends whom would share their experience as far as possible. There are times they like to cryptify what they said.

  • @bendahara your in the financial line right? most of my friends are into IT. I need to make more banker friends LOL!

  • @cybreed

    Used to be in financial but not everyone on that group are from financial sectors.

  • Community Manager

    @cybreed Which field of IT are your friends in?

  • @kaeley-wn technical support mostly. the boring stuff that makes the world turn besides money :)

  • Community Manager

    @cybreed I see! HAHA really interesting way to put it!

  • @bendahara

    Well, I'm looking to diversify my portfolio, and my capital is kinda low >< so with just ≈SGD 2,000, it take quite a huge percentage of my portfolio.


    Since my amount is kinda small, there is no point taking out and put into other financial instrument. So, most of the future fund will be used to invest in other portfolio in which only a portion to P2P to reduce the percentage of P2P in my portfolio.

  • @lipozami

    Don't worry about it. My initial capital is much smaller than yours at $1,500

  • Why I'm only investing in FSMY but not others? Because I have been recommended FSMY from my BFF who knows I like to use "money gain money" investment. When I started of course I will very curious about how efficient about this FS investment, and I keep concentrated on it, studying with it, keep my eyes on it mostly 3-5 times a day. Finally, I got the confidence with this FS investment after I received my interest paid, even though there are some late payment but still paid with late charges, I'm truly satisfied it. Last I'm really appreciated all FS workers, you all done very well, and keep tracking all for us, and make sure all funds are going smooth.

    Why I'm not on others Investment, because I haven't be recommend from anyone else..... Haha.... xD

    Thank you.

  • I have about 5% of my portfolio in p2p, depending on my income (between jobs now) I may increase the funds in p2p...to give an insight, my current standing is
    27.5% in Malaysian stocks (including cash)
    27.5% in unit trust (mainly funds investing in overseas markets and PRS)
    40% in fixed deposit

  • @kaeley-wn because I saw that P2P is promoting their investment platform with high return, so go have a try with RM1k first. After that keep top up, until I found that I put a lot in P2P already. I do not have much knowledge to do investment in share market, so go to UT and then P2P. Hahahaha...

  • I suppose why not. If diversify well enough, P2P lending may even result in a better risk-return matrix (i.e higher alpha, disclaimer: not seen a study done yet and honestly in South East Asia it is to early to say). Most P2P now are doing well right now given the global better economic situation compared to yesteryears. The test of survival is alway about during bad times which we have yet to experience. Mind you, I am all for P2P but most P2P are managed by the younger generation who may not have experienced the Pan-El crisis and AFC or even the Great Recession!

  • Community Manager

    Thought I'd share @Faris-Jamal's perspective here! :

    I've been hearing about crowdfunding for the past two years but had only taken the initiative to put my money in in August 2018. Now I'm shifting my personal portfolio of investments so that debt crowdfunding constitutes about 20% of it, and it might grow to a larger percentage.

    The main reason for the shift is that, based on my observation for more than a year, most debt crowdfunding platforms in Malaysia provide risk-adjusted returns (after adjustment for credit default risk) well above the other asset classes. Being a Bumiputra here in Malaysia and a risk-averse investor, my risk tolerance is relatively low considering my relatively high opportunity cost. Capital-guaranteed (by the government) investment opportunities that are present for the Bumiputras here provide return profiles well above the quintessential risk-free investments fixed deposits and government bonds are normally associated with. So technically, my definition of risk-free rate of return is well above the FD rate and even the MGS yield here in Malaysia. But I notice that, despite this high opportunity cost, debt crowdfunding offers me an opportunity to grow my investment portfolio at a faster rate, while still keeping the downside risk in check. On top of that, with the absence of market risk, I do not have to worry about the short-term volatility of my investment portfolio in this particular asset class. It is something that I think can run on autopilot given that I properly set my risk tolerance and investment return target on such platforms.

    Have my fair share of investments in other P2P platforms as well other than FS MY as my second layer of diversification strategy. But in all honesty, I still would not put P2P financing as my core investment given its nature of risk, and its assurance. Furthermore, given the local regulator's recent initiative to facilitate fixed income investments (listed bonds & sukuk) among retail investors, it will add direct investment into these securities as another investable asset class for us here, which is positive for diversification purposes. :)


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