John’s Real Money Story - investing, borrowing and back again
John’s a Zopa investor, who’s also taken out a Zopa loan. We spoke to him about his approach to money and the role investing and saving has played in his life. Remember, with peer-to-peer investing, your capital is at risk. Our loans had a Representative 15.4% APR on the day this blog was published.
What would you say your approach to money is?
Growing up, I was always more of a saver compared to my siblings, more interested in making money than spending it. For example, when the funfair would come to town, I’d be more interested in getting a job there and getting free rides than spending what little money I did have going on rides. I’d always work through school holidays and look for ways of getting additional income. So, I’d say I started out from early on as more of a saver than a spender, and have kept to that relatively careful approach all my life, staying within my means. However, that doesn’t mean I wasn’t willing to invest, and take some risk, in order to make my money go further.
How did you first get into investing?
As I got older, I developed an interest in investing. At work, listening to colleagues’, I’d pick up on the ways they were boosting their pensions. This was key to me planning for the longer term and how I could use savings and investments to supplement my pension from work. I didn’t have a great deal of money spare to play with in the beginning, but started to put aside little bits here and there each month so I could build up a bigger nest egg for later in life.
As someone who’s now experienced with investing, what do you think are the key things to consider before getting started?
First things first, I think you need to be realistic. Understand how much you can afford to invest and from this what returns you might expect to achieve. Some investments will carry more risk than others so you need to make sure you understand not only that, but how different investments work and how easy it is to get your money out when you need it. I’d also always look to avoid investments with high fees or transaction costs.
What was it that appealed to you about investing with Zopa?
It was the peer-to-peer model that caught my attention. I used to work in public services and I suppose my ethos is: if I have some spare money, why not help out my neighbour? Now, I know it’s not quite that direct in reality, I don’t know exactly who I’m lending to, but that principle is what really appeals to me. Then, over time, I found Zopa to be a great vehicle for investing smaller, regular payments, with risk level easy to determine and returns higher than savings and inflation.
And you’ve also been on the other side of that deal when borrowing from Zopa
Yes, that’s right! A while ago my wife and I moved to a house that we knew needed some work doing on it. We just didn’t realise quite how much… So we decided to take out a loan to cover those costs. We were both already investing with Zopa and thought, we’re already doing that, why not borrow from them too? We took a look and the rates were good compared to others and we were comfortable that we could afford the repayments, so that was that.
How have you benefited from your investments and savings?
Looking back, I’ve gained so much from saving and investing. The most notable benefit might be best described as peace of mind, or a feel good factor. That comes from knowing I’m in a good position should an unexpected cost be sprung on me. I also feel I’ve had greater control over big, important life decisions, like paying a deposit for a first home or choosing when to retire.
Being in a strong position financially has also meant I can better support my family. My wife and I have been able to help our children at important points in their lives: first cars, rental deposits, holidays, weddings, helping to pay off expensive debt and helping one to buy their first home. And finally, investing has also helped ensure that my wife and I are able to live comfortably in retirement.
