Funding Societies Review (Best Portfolio Diversification?)

Описание: This is an in-depth review of the peer-to-peer lending platform Funding Societies.

Start investing with Funding Societies today 👇

https://themillennialfinance.com/fund...
(Free RM30 after first deposit of RM1k)

WHAT IS FUNDING SOCIETIES?

They're a Peer 2 Peer Lending Platform which connects SME’s who are in need of an injection of cash in the form of a loan and investors like us who want to put our money to work.

Funding Societies is a middleman, providing the platform to connect us both. They also do the necessary due diligence, collections, and follow ups on the SME’s needing the loan so us investors have our best interests protected.

It's now a new business model, and it's something that’s available in many countries around the world. Even in Malaysia, there are a few other P2P platforms but FS is the most established and has the largest market share.

HOW DOES FUNDING SOCIETIES WORK?

We investors get interest on the amount of money we’ve decided to “invest” in these loans. I wouldn’t classify this as a standard investment per se because we’re getting profits from contributing to these loans, rather than ownership of an asset. Basically the SME’s gotta pay a certain interest rate to us for providing them the loan.

WHAT INVESTMENTS DOES FUNDING SOCIETIES PROVIDE?

There are 4 different types of loans fund:

i. Business Term - a standard loan to run day to day operations

ii. Accounts Receivable - paying a company while they’re waiting for payment from their customers

iii. Accounts Payable - helping them fund purchases that the company requires

iv. Guaranteed Investment notes - guaranteed by a third party, meaning that if the company doesn’t pay you, the third party will

IS FUNDING SOCIETIES RISKY OR SAFE?

Like any other investments out there, there are risks associated with debt investing. Since we’re funding the loans of these SME’s, if they fail to pay it back due to poor business performance or whatever reason, we will lose whatever capital we have exposed.

Based on my experience, there will be scenarios where the company isn’t performing as well as they hope to be. In most cases, they just pay it slightly late or restructure the loan to a longer tenure but up the interest rate payable.

Funding Societies manages all of this and keeps you updated on all payments, which is one of the values they provide being the middleman.

In some cases though, the company goes bankrupt and the loan goes into default. In this scenario, we will lose our capital and it's the risk associated with this investment.

HOW TO START INVESTING WITH FUNDING SOCIETIES?

You’ll need a Funding Societies account: https://themillennialfinance.com/fund...

Then head over to the investment opportunities there, and you’ll see all the available loans you can participate in at any given time.

They also notify you when they’re coming up, and there’s lots of information on the company that they’ve gathered and we can go through before deciding if we wanna participate

You can do this through the factsheet, and it's actually very comprehensive and this alone may justify their fees.

PROS OF FUNDING SOCIETIES

1. It’s a great diversifying tool for your portfolio

2. Investors interest are protected with due diligence and transparent system

3. Great user experience

CONS OF FUNDING SOCIETIES

1. High fees (compared to other online investment platforms)

2. Vulnerable to Black Swan events

MY PERSONAL EXPERIENCE WITH FUNDING SOCIETIES

I stopped using Funding Societies in 2019 because I didn’t have much money to invest and back then, I wanted to invest more in stocks.

Recently, I put in RM1,000 to test the platform again and within 2 weeks I’ve managed to deploy this full amount.

I’ll be using Funding Societies as a portfolio diversifier and I’ll be putting more money in depending on the results I see in the next few months.

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⌚ Timecodes:

00:00 - Funding Societies Review (Best Portfolio Diversification?)
0:41 - What is Funding Societies?
2:14 - How does Funding Societies work?
3:19 - What investments does Funding Societies provide?
4:41 - Is Funding Societies risky or safe?
6:42 - How to start investing with Funding Societies
8:05 - Pros of Funding Societies
10:34 - Cons of Funding Societies
12:38 - My personal experience with Funding Societies

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