I earned 160€ in 6 months with Bondora and you can do the same. Get 5€ free credit to get started in earning a passive income in Europe.
Investing and Travel go hand in hand
For some of us a short 90 day Schengen visa just isn’t enough. We want to explore everything Europe has going for it, the towns, people, culture, wine, beaches, whatever but mostly its travel. One of the best things long-term travellers (Nomads) can do to support their lifestyle and build freedom – aside from hard work and saving is investing. Investing allows travellers to do, as the Nomad Capitalist would put it, “go where they’re treated best”.
Passive Income: Earn Money and Keep Travelling
Not all investments are liberating. Some investments [like certain businesses], while profitable require your physical presence and can tie you down. Nomads and travellers alike are generally looking for investment options which return “passive income” – money which requires little to no effort to maintain. There’s stocks, shares, term deposits – that kind of thing, but what about P2P?
I invested €5,000 for 6 months with Estonian based P2P company Bondora. Let’s take a look at how it went.
What is Bondora?
Bondora is a P2P (peer-to-peer) lending platform from Estonia. From their head office in Tallinn, Bondora focuses on European loans across Estonia, Finland and Spain. Anecdotally, Bondora‘s really popular with German investors, not surprisingly – Europe’s biggest economy. The Germans are all about “Passivem Einkommen”. Bondora is open to investors from outside the EEA too and it’s very easy to open an account. The platform is as simple as a bank account.
How I Invested with Bondora
On Bondora there’s a couple of ways to invest. Experienced investors can select the loans their interested in, others like me can just take the “Go & Grow” account option. Bondora describes the “Go & Grow” account as low risk, fast liquidity with a 6.75% per annum return (paid daily). Withdrawals are fast and cost 1€.
In February 2020 I simply moved €5,000~ via TransferWise into my “Go & Grow” account. Nothing complicated about it…
What I Earned with Bondora
It’s now about 6 months later (late July 2020) and I’ve yielded €160~ on a €5,000~ investment with Bondora. I’m pretty happy with that, especially considering my options in Australia. At the moment interest rates in Australia are at an all time low of 0.25%, the lowest in my entire life.
The timing was perfect, the day I started writing this post ING Bank wrote to me about a term deposit I had with them. If I pit an Australian ING Bank term deposit against Bondora the comparison looks like this:
|Bondora (Go & Grow)||ING Bank (Term Deposit)|
|Investment: €5,000||Investment: €6,115|
|Return: €337.50||Return: €110|
What’s 160€ worth in Estonia anyway?
Let’s consider some basic maths and a little context to further illustrate the earnings potential:
- 6.75% of €5,000 = €337.50 (per annum) or €168.75 (6 months).
- €5,420 would earn 1€ per day at 6.75% (365€ per annum).
- If you were to invest into a term deposit in Australia you’d be looking at around 0.65% – 1% and you wouldn’t be able to withdraw your money until maturity.
Estonia’s national minimum wage is 540€ per month (6,480€ per annum). To earn national minimum wage in Estonia through Bondora alone you’d need to invest 96,000€ ($157,078.46 AUD). Most people don’t have that kind of money lying around immediately available to invest into P2P, but it isn’t an impossible amount of money either and it does demonstrate what is achievable.
- 160€ is $260 AUD.
- 160€ + 48.52€ would pay for 6 months life insurance with Ergo for TRP.
- 160€ would pay for 10 months of unlimited internet access with Telia.
- 40 coffees at Reval Café.
- An Estonian language course.
- 160€ + 80€ = 1 year’s worth of Kortiühistu payments in a small town apartment.
- Several trips between Tallinn and Helsinki with VikingLine ferries.
- 160€ becomes 320€ in a year’s time on a 5000€ at 6.75%.
Isn’t It Risky Though?
I wrote to Bondora and asked them to tell me in plain and simple English a little about the risks associated with a “Go and Grow” account. Here’s what they replied:
“Hi Jai, As you might know, Bondora is one of the oldest P2P platforms and was founded in the height of the global financial crisis over 10 years ago. Throughout the years, we have collected and analyzed lots of data in all the markets we operate. This gives us confidence for the future even though the times are hectic these days.We have explained our risk mitigation processes on our Support Guide articles, Risk section and YouTube channel. All Bondora loans are unsecured personal loans without guarantees. Please read Go & Grow Risk Statement to acknowledge all risks involved with Go & Grow product.In the unlikely situation of bankruptcy, no further loans will be issued, and an administrator would take over from there to continue to manage the existing investments. We have also explained it and other risk mitigation processes in use on our Support Guide article.If you have any additional questions, please contact our support at [removed] and someone can assist you“.
Bondora is an easy and practical way to invest money in Europe. Inexperienced investors can use the “Go & Grow” account to get started. Interest is paid daily and you can easily withdraw too!
Other Estonian Resources
- A free €5 starting bonus with Bondora: https://bondora.com/ref/jaim227
- 1 free money transfer with TransferWise
- Estonian Banks, Alternatives and e-Residency (blog post)
- How Much Money I Spent in Estonia in 1 year (blog post)
- 100 reasons to visit Estonia (blog post)
Not Financial Advice
This blog post is intended to share my personal experience with Bondora. I’m not a financial advisor and this is not financial advice. You should consider your own appetite for risk, your own financial goals and you should do your own research. Bondora‘s General Risk Statement is available here: https://www.bondora.com/en/riskstatement.