5 Best ‘Alt-Coin’ to Consider

Your father has just sold the house you grew up in. He split the money and gives you a handful. You’re only 25 and have just become moderately rich. What should you do?

Maybe it’s time to invest. But what kind of investment? You consider trading stocks but it’s too complicated. Reksadana is a fine choice but it takes too long and doesn’t pay much. Later on, you stumble across an article on social lending, which after an extensive research later, you find out that it’s formally known as P2P lending. It promises you a rather big interest in a relatively short period. And let’s be honest, your phone is 3 years old and iPhone XS Max has just been released. You’ve decided that it’s the perfect investment for a young-tech-savvy-startup-enthusiast like you.

So let’s find out what exactly P2P lending is.

Peer-to-peer (P2P) lending is a method of debt financing that allows people to borrow and lend money without a financial institution. Because you eliminate the middlemen, P2P is actually good for both borrowers and investors. The interest is lower than what bank might give to the borrower and the investor is offered a higher interest than traditional saving.

As opposed to stock market, the advantage of P2P investment is that it’s simple to comprehend and easy to invest. Investment can be done with a click of mouse with amount that is relatively low. Leading platforms like Crowdo also provide deep analysis of borrower’s profiles which helps in easy decision making. Investors stand to earn multiple times the returns they would receive from bank deposits, stocks, or other investment options.

That seems wonderful. Is that it?

Although it might seem easy, making investment is never all cookies and rainbow. It would be smart for you to consider a few things before you take a dip on P2P investment. Here is a list of things that might help you make a good investment:

1. Pick your platform wisely

Choose your perfect platform -- that is regulated by the government. Here in Indonesia, a credible platform is the one that is registered to Otoritas Jasa Keuangan (OJK) so if you would find something fishy in the future, you could easily ask for assistance from the government

2. Check the profile

It’s your homework. You have to study your borrowers. Invest in people who have a decent background

3. Diversification is key

In essence, the trick is to avoid funding any loans in full. That way, you reduce the amount of your money exposed to a single risk. If one loses a small amount, the interest gained from the rest can always cover it and cushion you from a net loss

The time has come for us, millenials, to start making investment. Let’s start small like P2P investments. Use it as a training and maybe you could do bigger in the future. The whole P2P investment might seem easy, quick, and profitable. But as a smart person, we have to research each step that will be made, especially in making investment.