1. Do not invest your emergency buffer
Peer to Peer investing is offering the possibility to get a significantly higher return compared to deposits in exchange of slightly higher risk. Great! This is worth trying, but only if you have savings on top of the amount you consider necessary to cover unexpected expenses or emergencies.
We advise you to keep your emergency buffer on your bank account, in order to be available any time.
2. Diversify in as many loans as possible
Klear takes care of the selection of creditworthy borrowers and price their interest rate according to the risk profile (segment). So in average you should get the expected return.
This works only if you spread your investments in many loans, at least 50. It’s why we set up a maximum of 2% of your funds invested in 1 single loan. From 100 (no more than 1% of your funds in 1 single loan), you can start feeling very safe.
3. Do not keep idle money on your Klear account
You get return only on the money you’ve invested in loans. If you keep uninvested money on your Klear account during a long time, you miss opportunities.
We recommend you to check regularly your dashboard in order to reinvest the idle money on new loans. It’s important because almost every day you will receive back some small payments from the loans you’ve already invested in.
4. Be clear when you will need your money back
If you invest with the idea to generate a long term saving for your retirement for example, then no need to pay too much attention to the duration of the loans.
But if for example you have an important project in 3 years, then we recommend you to invest in loans with a remaining duration below 3 years. Besides, month after month, when you reinvest the money returned, reinvest it in shorter and shorter duration.
5. Start investing on secondary market only when you master the topic
Secondary market has not been built with the idea of making (or losing) fast money like the stock market. Its purpose is to offer the possibility for investors to sell their portfolio if they need their money before planned.
Investors can sell with Premium or Discount. So, be carefull, to be able to assess if you’re going to make a good deal when buying on the secondary market is not easy. We try to help with a valuation model (see KIP), but we recommend to go there only once you master the functioning of the platform and its model.