Can you trust P2P bloggers? Are they telling the whole truth? Will they share everything when they are the dumb money?

Can you trust P2P bloggers? Are they telling the whole truth? Will they share everything when they are the dumb money?

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How bloggers report their losses

So it happened. I was the dumb money this time. Game over. Shit. I lost about 5174,59 EUR last month with Envestio, as it turned out to be a scam. That includes a net loss of 3832 EUR plus all time accrued interest of 1342,59 EUR. Even though the earned interest was fake, I have been counting it as income every month since I started investing and blogging about my income from crowdlending. Now that the money has vanished together with the platform,  I have to deduct it in the month I lost it. It is the only proper way to do it. In January I also sold my investments early and lost all my accrued interest on another platform, that I did not want in my portfolio anymore, as I don’t trust them too much. That exit cost me 80 EUR. On the upside I made 682,17 EUR from other platforms. That leaves me with a total loss for January of -4492,42 EUR. 

This looks horrible! But it is the ugly truth of what can happen if you do not do proper due diligence of the platform. 

Many bloggers have lost large amounts in January do to the Kuetzal and Envestio scams. So I decided to have a look at some of the other bloggers and see how they reported their income for January. What I found made me pause my preparation of my monthly income status for January, to write this post first. Below is a collection of some of the blogger portfolios out there. 

You can see a clear drop for three portfolios. thewealthyfinn.comdollarbill.online, and brainywealth.com. Below are their monthly income. Their graphs look a lot like mine. It sucks, but at least it clearly shows the full picture. 

The Wealthy Finn

dollarbill

Brainy Wealth

What about the blogger with the most success for the month?

Let us look at how Jørgen from financiallyfree.eu reported his loss. I knew that he was heavily invested in both Kuetzal and Envestio. He must have done something amazingly right, because he came out with the biggest plus of all in January, when you look at the graph above and the monthly update he sent out for January. 

FinanciallyFree.eu

Let us have a quick look at Jørgens numbers. Here are the exposure to the two platforms from Jørgens December update. 30047 EUR at Envestio including accrued interest and 27433 EUR at Kuetzal. That gives a total loss of 57480 EUR. Below you can also see how much passive income Jørgen has reported month per month. 

As there has been no redrawals for Envestio or Kuetzal during January, I assume that Jørgen lost the full amount in January. Now let us have a look at Jørgens numbers for January. It should obviously look really bad, so why does it not? 

Looks like he made somewhat less in January but still came out positive. His XIRR only dropped from 11.66% to 10.41%. Impressive with that huge loss. But wait? What happened to Envestio and Kuetzal in the overview? They are gone! Where did they go? In another section outside the calculation of the income and XIRR. The numbers are the lower net loss numbers and are not marked with a minus or in red, but in black. Do they look like losses now? Not really. It could look like the money was just withdrawn from the portfolio and used for investing elsewhere outside of crowdlending. But it does make the calculations and the income graph look a LOT better. I also see that the graphs with the monthly income on both Envestio and Kuetzal have been removed from the January update. Is this not pretty valuable information? I think it is, especially if Jørgen added the loss from January to the graphs. 

What happens to my income graph for January if I cook the books in the same way as Jørgen? You can have a look below. Wow! This looks so much better. Pretty good month! No losses – how wonderful. 

Show the full picture, bloggers!

Jørgen is not the only blogger who has ignored or manipulated the losses in January. There are several and you can find some of them in the collection at the start of this article. I think that if you want to keep your integrity as a blogger and live up to the social responsibility you have to the P2P investor community, you need to make you losses as clear as you make your wins. Below is what I think is the true and full picture that ALL bloggers that lost money on these two scams should show. Yes, we fucked up. None of us did a proper investigation of Envestio and Kuetzal. We lost a lot of money. Don’t feel embarrassed. Just tell the story as it is. That way your followers, especially the new investors, will see that there are no easy money floating around in the fairly unregulated Baltic crowdlending market. You can make good returns, but there are also real risks involved. If you choose not to tell the full story you are, at best, misleading investors. 

Jørgen - show the true numbers and visualize them! You owe it to us!

I am sorry for being the one to call you out, Jørgen. I am also truely sorry about your huge loss in January. But when I saw that you clearly manipulated the numbers concerning your loss in January, I just could not keep quiet. I really hoped that you would be honest about the true magnifications of what happened to your earnings, and not just sweep all your bad investments under the carpet and only show the good numbers. 

Your XIRR is absolutely NOT 10.41%! You cannot just pull your huge loss out of the equation and just calculate on the good numbers. That is not how it works. 

Please also put your graphs with your monthly income from Envestio and Kuetzal back on the blog. You need to tell the full story here. Don’t forget to add the pillar for the devastating month of January. I made a graph for Envestio below and added the month for January. I was even nice and added a potential earning of 450 EUR for the month into the calculation. This is the ugly truth Jørgen. Don’t hide it. Stand by it. That is all I ask. 

This Post Has 7 Comments

  1. Mr Cheese

    I was discussing with Eli of thewealthyfinn.com if the graph should be including losses. One could argue that losses are just 0 income in the end. However you have the point of keeping it real for the users out there. So I ended up reporting a loss of ~1.7k in my monthly update too, even if it hurt.

    1. Georg

      I think you will gain a lot of credibilities and create loyal followers if you display the full truth. By delivering the truth, even when it hurts, you create true value for your followers and I am sure it will pay off in time. No matter what, the loss is there. You will learn from it and by displaying your loss very clearly, you let your followers learn from it as well. You did that. That makes you awesome.

  2. John Bakken

    I get your points, and i am all about credibility towards readers too!

    However i don’t agree that the only way to have credibility in this case is to show your loses in the graphs. Sure it can be misleading if you don’t tell about the loses at all, but that is not the case with most p2p bloggers, including those you mention. It is not included in the graphs but it is clearly stated that they had loses and how big they were, so i don’t really see the issue? – I mean they are not hiding it or anything like that.

    Also, i think that this post is a bit harsh worded. Of course we should be able to disagree about stuff in the p2p blogging community, but it should constructive and investigative worded, not confrontational. Let’s help each other instead.

    Anyway, this is just my two cents. Otherwise thank you for a nice blog – i have been following and reading for a while now.

    1. Georg

      Hi John,

      Thank you for your comment. I agree that it can seem harsh. However, it is the truth IMO. There are hidden numbers, losses are not included in the calculation of income or XIRR, only net loss numbers are included so lost interest has not been calculated in. Besides, income graphs for Envestio and Kuetzal have been removed from the website. As a fellow blogger, I can tell you that no one will read old monthly updates. Only the newest one. With the setup he has made, next month there will be hardly any trace of the losses and new investors will not see them. If he would have calculated it into his income, as he does with his smaller losses at Bondora, it would be visible for investors FOREVER! So why does he go out of his way to make his BIG losses seem nonexistent when he clearly states on his about page that:

      “Everything you will find on the Financially Free blog is presented with full disclosure and transparency. I strip down naked for you and unveil my income and expenses, my investments, my failures and my successes.”

      His lack of reporting of his huge looses is not him stripping down naked for us. He barely took off his hat with his monthly update, when it came to reporting his failures. If he had changed even one of the things in the list above, it would have been more transparent. It really makes me wonder why he is in this game. Is it really to help new investors by bringing knowledge about crowdlending and P2P to the marketplace? Both good and bad? Revealing your failures delivers a ton of value for investors. It delivers less in affiliate income though. I really hope that is not the reason why.

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