From IT to P2P
Lars Wrobbel is one of Germany’s most influential peer-to-peer lending bloggers. He tells Marc Shoffman how he became involved in the sector and how he chooses his investments
Peer-to-peer lending blogger Lars Wrobbel quit his “stable but boring” job in IT in 2019 to focus on his investment portfolio.
The 37-year-old has built a portfolio that includes P2P investments and shares worth more than €300,000 (£266,982), supported by publishing books about finance and other subjects on Amazon.
Wrobbel has built a strong online community at Passives Einkommen mit P2P Krediten from his home in Germany where he shares tips on P2P investing strategies and his views on various platforms.
He explains how P2P lending has helped him become financially-free.
Marc Shoffman (MS): How did you get into P2P lending?
Lars Wrobbel (LW): My main employment was in IT and I also wrote books to sell on Amazon. I earned a lot of money and invested 90 to 95 per cent of the monthly revenue into P2P lending and the stock market to build my portfolio.
My portfolio strategy is cashflow orientated. I invest in instruments where I can generate a steady cashflow – this will overtake my day job some day.
The first contact I had with P2P lending was due to a YouTube channel. I started by investing €25 (£22) in Auxmoney in 2015 and thought it was a nice idea to give loans to other people. I then did my research to find better rates and discovered Bondora and Mintos.
Read more: Robo.cash predicts 12.6 per cent average P2P yield rate in 2023
I then started a blog about investing in P2P loans, it was never my intention to earn money from it. I just wanted to write about the topic and didn’t realise I was one of the first P2P bloggers. It has turned into a huge community.
Consumer lending is the easiest way to get into the topic and it is the sector where I can park my money for 60 or 90 days, while in contrast, when investing in real estate your money is bound for two or more years.
My largest P2P investments are now with Bondora. I have good contacts with the team as I worked in its offices previously. It is one of the oldest and most reliable P2P lenders on the continent. I like the ease of its products, it has a one-click investment facility where you don’t have to search for loans and can deposit your money for it to be invested.
Read more: Strong start to year as Bondora welcomes 2,000+ new investors
I like to analyse the company but not the loans. It saves time searching for single loans as you leave the work to the experts.
P2P lending is currently 18.62 per cent of my portfolio, I have a cap of 20 per cent. If it reaches that I will cash out on some platforms, last year was strong for P2P as the stock market was down.
MS: Why do you like P2P lending?
LW: The most important thing is it is more or less uncorrelated to the stock market.
If you have turbulence in the stock market, it does not impact the P2P market.
Everything is fine as long as the platform is not going down.
I have had losses of course. In 2019 we had scams in the Baltics, I researched most of them but was trapped in Grupeer and lost around €3,000.
I also lost some money in Mintos due to the Covid crisis as there were some loan originators that collapsed.
Overall though, the losses haven’t affected me.
MS: What platforms do you recommend?
LW: Right now my favourite platform is Robo.cash.
It is based in Singapore but the main team sits in Russia so see themselves as an international company.
I visited them in 2019 in Siberia, it is crazy to think about that today. It is a young team all against the war, it is one of the biggest P2P platforms, their numbers are unbelievable.
All the growth areas are international such as in the Philippines.
They are reliable and have not had any problems since day one.
MS: What is your view of the UK market?
LW: The hurdles for investing in the UK are a lot higher compared with continental Europe.
You need a lot of money if you want to diversify your portfolio especially in real estate.
Platforms such as Shojin have a minimum investment of £5,000 whereas you can begin with €50 on EstateGuru.
Read more: French peer-to-peer lending hits €2.1bn in 2022
There are interesting platforms in the UK and I have started investing in litigation backer AxiaFunder.
It is really cool and there is nothing similar in the rest of Europe.
MS: What is your view on P2P lending regulation?
LW: Regulation in general is a good thing to avoid all the scams. It is not 100 per cent but it puts the bar higher.
The UK feels like it is a bit over regulated. There are many hurdles for investors before you can invest.
Platforms in the Baltics have recently started getting regulated. Some are having problems transferring into regulated entities but it is still a good thing to have a more stable and sustainable market.
There is still no regulation for consumer P2P lending so there is the risk of scams in this area in Europe.
The sector’s image has been restored since 2019 when there were some scams and then the Covid crisis which damaged the industry. Platforms are more stable than ever today. A lot of the Baltic platforms are now regulated so the hurdle for scams is higher.
MS: Should P2P be open to all retail investors?
LW: P2P is a good tool for ordinary people to diversify their overall portfolio and learn more about finance. It should be open for everyone, that is the essence of P2P lending, to give out loans to other ordinary people or businesses.
MS: What is your view on P2P lending risks?
LW: Today I mostly look at the regulation level of the platforms. I invest more in platforms that are regulated and have audited reports. A lot of platforms don’t have audited reports, that is a sign for me not to invest. Audited reports mean I can compare a brand with big companies.
Looking at the loan book or loan performance of a platform is tricky as every platform has its own techniques, the real value for me is the audited report of the company.
Read more: New EU rules could see lenders expand to UK
Another important point is communication. If I invest in a platform and get a newsletter just once a quarter, that is not enough. For example, I get updates from Mintos two or three times per week with details on loan originators and the platform itself so I am up to date on what is going on.
MS: What is your outlook for the sector?
LW: I see a more stable future for P2P lending than we had before, due to regulation. A platform starting today is more professional and mostly directly regulated. Back in 2018 you could start a website with some clicks and collect the money without people checking. The industry has become far more professional.
