When investing, your capital is at risk.
Inflation is rapidly increasing worldwide. Meaning the value of money is falling by the minute. The UK inflation rate reached a decade high of, whilst Europe was ever so slightly behind at 4.9%. Across the pond, prices soared by 7%. Forbes noted that this was the largest increase since 1982.
What does this mean?
This is making a lot of people poorer as living wages struggle to keep up. Base salaries fell by 1% in November 2021 compared to 2020. The cost of living is rising at a significantly higher rate than people’s wages. This leaves people with a lot less money to spend, save or invest.
The solution to some might seem simple: why not just invest in something that provides greater annual returns than inflation, right? Yes, but no. In 2017, there was £721bn sitting idle in UK savings accounts, not getting any return. With the impact of inflation, these savers (who thought they were doing the right thing) were not making their money work for them. This is for various reasons. According to This is Money:
- 70% of savers don’t feel confident enough to invest due to seeing family members and close friends make losses
- 40% of millennials savers don’t know where to go to learn about investing
- 54% feel like investing is ‘exclusive’ and not for ‘people like them’.
The ordinary person is missing out on an opportunity to create passive income, with many ready with the cash to invest. Meanwhile, investors who have begun their journey of wealth creation are facing the challenges of protection.
This is a problem Kimmo Rytkönen faced as an investor following the outbreak of Covid-19 and its impact on the markets. He spoke to us in detail about his experiences in this interview. Retail investors were more vulnerable to high risks in their investments. With over 10 years of experience in consumer finance and shared in P2P marketplaces, he decided to do something about it.
Income Marketplace combats the challenges of access to investment opportunities and investor protection. Income combines high-end technology with protection measures typically only available to institutional investors. This enables everyone who invests to have a lower risk experience in this asset class.
On the other side, their seamless investment platform and app allows the everyday person to become an investor with just €10 and no fees. Income is helping investors earn up to 12% p.a. beating inflation by a mile! They do this by letting people invest in short-term loans, car loans, personal loans and in the future real estate.
Investing always involves significant risks but at the heart of Income is investor protection. They do their best to reduce risks by:
The Buyback Obligation
In the event that the borrower doesn’t make scheduled payments, the loan originator is obligated to buy back the loan from you and you receive back the full principal and interest.
Cashflow Buffer
In the event that the LO doesn’t pay the buyback due to them going out of business, for example, Income secures the investment with the loan portfolio and makes sure there is the right amount of security in the form of a cash flow buffer which they can use to cover payments to investors. You can read more here.
To help increase financial literacy, they provide educational content and updates on their blog.
The loan investing company only launched in 2020, but to date, they’ve processed €4.6 million in investment and have over 1,200 approved investors on their platform. Between August and November 2021, Income saw 3-10% week-on-week growth of investors. Currently, investors have 5 loan originators to work with listed on the platform, and there are over 100 in the pipeline.
Income’s mission is simple and ambitious (just what we like at Seedrs): be the one-stop shop for everyone who wants a passive income.
To be a one-stop-shop, they know they need to strengthen their team, enhance their product offering and provide better onboarding support to investors and loan originators. They also plan on launching their very own Secondary Market.
In order to achieve this, they are fundraising on Seedrs to raise €750,004. We’re excited to say that they reached their target in 2 days! Fortunately, the opportunity is still open for others to join the 164 investors helping Income reach the masses.
To join them on their mission, visit the pitch here.