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Life At A Fintech Startup: 5 Interns Share Their Lessons Learned

At Funding Societies this summer, we welcomed a diverse group of interns from various universities in Singapore. To conclude their internship journey at Funding Societies, we had organized a HTHT session consisting of Kelvin Teo, co-founder & CEO and the summer interns of 2017:

  • Sherman Lim, BSc (Economics) and 2nd major in Strategic Management, Singapore Management University (SMU)
  • Clarissa Poedjiono, BSc (Information Systems), SMU
  • Eugene Ng, BBM (Finance), SMU
  • Victor Tan, BSc (Economics & Finance), Singapore Institute of Management – University of London (SIM-UOL)
  • Martin Indrawata, BA (Political Science), National University of Singapore (NUS)

Why intern at a FinTech Startup?

Victor: Like many of my peers, I work at a large company during summer break. However, after reading about Singapore’s startup culture and how the economy is primed for a startup ecosystem, I was certain that I wanted to work for a startup. As a finance student and someone who would use Fintech such as cashless transactions, virtual wallets and crowdfunding, I knew I wanted to learn all about what goes on behind the scenes in a FinTech startup.

Clarissa: As a major in Information Systems, I wanted to join a tech firm. After reading about the FinTech disruption in the banking sector, I realised that perhaps the best learning ground for me would be to join a tech start-up.

Sherman: Having interned at a traditional corporate set-up before, I thought it will be interesting to find out what it will be like to intern at a startup. Of course, I have heard many stories and read case studies in classes that working in a startup will be really hectic and challenging. I also thought this will be a good chance to explore what I wanted to pursue as a career. As to why FinTech, this is the latest trend in the financial sector and is sure to disrupt the business models of traditional financial institutions. I figured, why not join a FinTech startup to learn more about it.

Read More: My Greatest Takeaways From The 12-week Internship At Funding Societies

What was the job seeking and interview process like?

Clarissa: I found out about FS through SMU’s career portal. I found the background of the company and the job description attractive. I went through 2 rounds of Skype interview and 1 assignment submission.

Martin: I met Ishan (Head of Data Science) during a talk at NUS and he shared about the opportunity. The interview process was great as I got to learn more about the team dynamics and leadership of the company (as positively reflected by Xin Ying and Vikas, Head of Business Development and Marketing respectively). What I was heartened about was that my interviewers asked me on things non-related to the job, which I feel was a positive valuation of me as a potential contributor to the company.

Eugene: I got to learn about Funding Societies through a friend of mine who was going to work at Oliver Wyman, who was in turn told how one of the seniors at Oliver Wyman had left the company to join Funding Societies, a startup. The 2 co-founders are also from Harvard and consulting background. It goes to show the caliber of people who run the company, they hail from some of the best institutions around.

Oddest question during interview?

Sherman: Right at the start of the interview – “Do you have any questions for me?”

Victor: “How would your family describe you?”

Martin: “Why do you think Trump won the elections?”

Eugene: “Don’t you want to spend your holidays travelling instead?” (I did, but I definitely didn’t wanna travel for 4 months straight)

What were your most memorable moments during your internship?

Sherman: Definitely the karaoke session during the company retreat! I had a really enjoyable time with the entire company (including our Malaysian colleagues) unwinding and playing hard after an extended period of crazy and intense work. It was also funny seeing our bosses (Not Kelvin) doing the Macarena & Gangnam Style dance.

Victor: I recall all the nights the team spent together watching Game of Thrones which the company airs weekly. It’s really cool that the team stays back after work for dinner and watch TV together. Fun fact: The company even has a Slack channel dedicated to the discussion of our favorite TV show.

Eugene: The most memorable moments for me were all the small chats and hangouts with the colleagues in the office. They went pretty deep into personal viewpoints and philosophies, and I got a really good feel of the diversity in the office from these chats.

What have you learnt that you can apply in school or life?

Clarissa: As an Information Systems student, I’ve always strived to improve my technical skills and this internship has given me insights on how IT projects  solve real business problems. I got to run a flagship project with Sherman and was given freedom to explore the possibilities of executing the project. I was inspired by the leadership skills of the leaders in FS who were gifted yet very kind and helpful.

Victor: I think my biggest takeaway is the need to start broadening my scope and venture into skills beyond my own field. Especially in a startup, you have to make sure that you have multidisciplinary skills as you might be called upon to do a task that would require a skill set that is different from what you learn in school. For instance, I’ve witnessed how some basic coding skills can really help to accomplish certain tasks more efficiently as well. In a company sharing session, I remember Kelvin sharing about the need to learn as much as possible but also ensuring that you have a unique specialization to set yourself apart from others.

Eugene: Technically I’m already a graduate, so I’d say adaptability. The dynamism and pace in the workplace far exceeds that of school life, especially so in a startup like Funding Societies. It’s great to get used to being able to operate and thrive in such a charged up environment.

Has this internship met your expectations?

Sherman: Honestly this internship has exceeded my expectations. We were given full autonomy to initiate and drive projects in the company with the full support of our mentors and the teams. I even commenced my investment journey here by investing into loans on the platform. I have seen how detailed the SME assessment is and that gives me the confidence to earn handsome returns.

Clarissa: It has exceeded my expectations in every way. I’m thankful for the people I got to work with and the skills that I got from this internship.

Victor: Definitely. I didn’t expect to learn from so many brilliant individuals. (The team consists of alumni from various local universities and from different disciplines, including NUS, SMU and SIM as well as alumni from Ivy-league universities including Harvard, Stanford and LSE. I had the opportunity to learn vastly different skill sets from the best and the brightest people.

Martin: Exceeded expectations. The amount of smart and driven people crowded into a 15m by 10m room (old office at Raffles Place), plus my wonderful mentor (Xin Ying) made my 7 weeks there an amazing one.

Kelvin: Yes, FS would be a full step slower, if not for our interns. It’s amazing what one can achieve, if you put a little faith in them. All our interns in the previous batch has joined us full-time. We’d be delighted to have our star interns onboard too before or after their graduation, including Eugene even if he’s joined the ‘dark side’.

Read More: This New App Can Help You Kick Start Your Investment Journey

Weirdest thing you’ve done in FS?

Sherman: Doing the Macarena & Gangnam Style dance with the bosses. It was weird but still fun.

Victor: I literally designed the toilet signs. The Game of Thrones fans in office (probably half the office) was upset that we couldn’t name the meeting room after the locations in Game of Thrones and Lord of the Rings, so as consolation we named the toilets Hodor for ladies and Mordor for men.

Martin: I used Kelvin’s nerf gun (Sorry Kelvin) and had a nerf battle with some of the team members after work!

Advice for future interns?

Sherman: Be a sponge and absorb as much as you can during your internship. Always be ready to learn and accept challenges even if you think you do not have the skills required. The FS team is always ready to guide and support you along the way.

Martin: Come in with an open mind. Be prepared to accelerate your learning, because the learning curve will be steep. Talk to everyone, especially someone from a function you don’t know much about. Ask, ask, ask; but also ask the right questions – questions you cannot find the answers for in Google. If your reaction to topics like UI/UX or Software Engineering is “eeeh, so difficult”, then FS is not the place.

Eugene: Don’t be choosy about what you do, there’s no place for picking and choosing in a startup. Nobody can silo themselves off as just “Business Development” or “Tech”, everybody has to synergize with each other in order for the company to thrive. If this means doing something outside of your own job scope or your initial expectations, just embrace it! It’s another chance to learn.

Kelvin: “Don’t let anyone look down on you because you are young, but set an example for the others in speech, in conduct, in values, in faith and in conscience.”

Investing in an Uncertain World

Here’s an example of how uncertainty can affect the average investor: prior to the 2016 US Election Day, most polls had projected a Hillary Clinton victory. The eventual result was different, not to mention unexpected. The shock impacted the markets even before the official winner was declared. As Donald Trump’s victory became more and more assured, gold prices soared; the metal is generally seen as a safe asset and a hedge against inflation. Meanwhile, emerging market stocks tumbled and the US dollar reached its highest point since 2003.

In the immediate aftermath of the 2016 USA elections, the markets certainly reacted and the fluctuation reflected anxiety for the future. Investors asked: is long-term market stability still possible? Will the markets continue on this volatile streak? Will they calm after a while? Given a situation of financial instability, what should the typical investor do?

Donald Trump’s victory was a catalyst for financial swings, but the reality is, market instability often happens and investors need to prepare accordingly. Certain (but not excessive) precautions should be taken to buffer against unexpected upheavals. How to do so? Diversify your portfolio, hunt for new investment opportunities, and stay calm even during choppy times.

Diversify Your Portfolio

Political events often upset both the markets and investor confidence. Some investors choose to behave in a more conservative manner (see the spike in demand for gold immediately after the 2016 USA presidential elections). Others choose to try and time the market in the middle of insecure times by pulling their assets and getting back in later when the markets stabilize.

But timing the market is a very risky affair, even for experts. If you want to fortify your portfolio in anxious times, you should diversify across different asset classes and rebalance your instruments periodically to maintain your risk profile.

Telling investors to diversify is very basic advice, but think about it. Diversifying your investments is something you can control in the midst of uncertainty. You get to choose which instruments to purchase and how much money you are comfortable allocating into each asset class.

The main idea here is to balance the potential for risk and reward. For example, let’s say your portfolio consists of company stocks and precious metals. Your stock value may have been erratic over the USA election season, but the value of your gold has gone up. As you can see, with a well-diversified portfolio, you remain in the clear if the stock markets fluctuate for the long-term, as your returns aren’t determined by the performance of a single asset class.

Don’t overload yourself with real-time market information, but do look at all asset classes and see how they will fit into your portfolio and your risk tolerance. The bottom line is: if your overall portfolio is doing fine, then geopolitical situations matter less.

Read Also: This Infographic Will Tell You All You Need To Know To Defend Your Investments

This Is a Good Time to Hunt for New Investment Opportunities

If you think your investment portfolio is already well-balanced and you have covered the basics (fixed deposits, bonds, gold, stocks, etc), you can research new places to invest your money. There is an advantage to routinely looking at all the available options and seeing how they fit your portfolio because over time, asset classes produce different results. So to maintain your preferred risk profile, an investment portfolio needs periodic rebalancing.

If the current market climate is rendering you a little skittish, you can try investing small sums into alternatives. Technology, for instance, can be a promising sector.

Internet stocks are obvious suspects. Think about how essential brands like Google have become. But note that unless you are an early investor in these tech companies, your returns won’t be spectacular. Also, if you already own company stocks, other areas in technology can answer the gap in your portfolio.

Innovative and profitable technology companies are not exclusive to Western markets. One technology-based investment opportunity that’s growing in Singapore is peer-to-peer (P2P) lending, which utilized online platforms to match borrowers and investors. Borrowers take out financing for working capital or other business necessities, while investors who had collectively funded the financing opportunities gain interest-based earnings in return. Investing in P2P lending has several benefits: good return rates higher than deposits or bonds, a low entry barrier suitable for those wanting to try the business model first, and a streamlined online process.

Despite being a relatively new instrument, a study by the UK Peer to Peer Finance Association (P2PFA) stated that so long as investors are educated and the regulatory framework is sound, P2P lending does notcreate systemic risk. In fact, defaults would need to increase at least threefold from current levels to whittle down investor interest rates to below zero.

These days, certain apps can give you real-time updates on your favorite investments or even figure out the best investment mix for you. New opportunities are out there. Take the time to research and find new investments you can be confident in. Look for instruments with good growth that you can feel secure in.

Stay Calm and Don’t Make Rash Decisions

Yes, it can be difficult to enact this advice when your portfolio contains your hard-earned money, future hopes, and retirement plans. Investing can be as emotional as politics, making it difficult to stop watching the market’s every move. Yet it is counterproductive to overanalyse the current situation; there are too many variables. All the information overload can induce panic and cause you to “sell low, buy high” instead of the other way around. Additionally, don’t succumb to the temptation of making speculations. Impulsive decisions can change your portfolio drastically and at the moment, you need a balanced and stable portfolio.

Read Also: Invest Based On Your Investment Objectives, Not What Others Are Saying

Funding Societies is a DollarsAndSense Brand Connect partner. If you are interested to know them better, you can find out more on what they do on our DollarsAndSense Brand Connect Page.

The Fintech Revolution In Singapore: Here’s Why It’s Here To Stay

It’s undeniable that technology will increasingly impact the way we live, work, communicate and entertain ourselves. From the moment we wake up, we are logged on to technology.

We check our phones to reply any messages we’ve received. We use Grab to book a ride to work or check the arrival timings on buses. We also reply emails or catch up on news stories and social media gossips on the way to work.

Throughout the day, we use Google to search for information, Facebook to look into what our friends and family are doing, browse Agoda, Expedia, TripAdvisor and Airbnb, to look into our holiday plans. Other aspects of our lives including dating, either using Tinder or stalking dates on social media, travelling, using Google Maps, playing games on our phones, shopping on Zalora and Alibaba or RedMart and Amazon, and also to watch our favourite TV shows on Netflix if we are willing to pay, or to stream from illegal websites if we are not.

Having infiltrated most aspects of our lives, it’s not difficult to fathom that our phones will not only be our source of entertainment, our shopping mall, our travel agent and our personal assistant, it will also be our bank.

The Fintech Revolution In Singapore

As a nimble, technologically advanced country with an educated population, Singapore is well-placed to be a laboratory for technological solutions and innovations, including in the Fintech space.

Testament to the importance placed on fintech in Singapore, several schools themselves have started to include fintech modules into their courses. This will supply a talented pipeline of workers to the sector as schools continue to broaden their programmes to include fintech.

At the tail-end of 2016, Singapore hosted its first Singapore Fintech Festival. Just to get an idea of the scale of this, there were more than 11,000 attendees from more than 50 countries over the five day festival.

The country has also showed its intention to continue being at the forefront of fintech by committing to an investment of over $225 million over the next five years in 2015. Besides funds, implementing a collaborative system and vibrant fintech infrastructure is another initiative the Singapore government is taking seriously to grow the industry.

For the longer-term, the government seems set to playing its part to drive the industry. The MAS (Monetary Authority of Singapore) has confirmed that it will host the Singapore Fintech Festival again this year. Moreover, it will also be awarding up to $1.15 million at the Fintech Awards.

Read Also: 4 Jobs In Finance That Technology Will Be Disrupting

Despite these efforts, there are some reports stating that fintech penetration in Singapore is not the pretty picture everyone is painting it. Ernst & Young’s EY FinTech Adoption Index 2017 placed fintech adoption in our island nation at 23%. This is behind the likes of Switzerland, Hong Kong and Mexico, and way behind even developing nations such as China, India and Brazil.

The reason for this may be that penetration is easier for developing countries whose regulations are more relax. Whereas in Singapore, there are strict laws in place, which includes protecting copyrights and intellectual properties.

There are also developed countries that place ahead of Singapore, and this is an area that should be improved. One reason it may have happened is due to the strong companies that dominate the local financial marketplace, especially in the banking and insurance sectors. These companies that dominate the local markets are also highly profitable, which makes it less likely they would change the status quo without being encouraged to do by regulation.

How some of these walls can be broken is by good regulation and working with industry players to seek win-win solutions. This can be seen in MAS’ recent establishment of a Payment Council, that includes 20 leaders of such institutions in Singapore. The country has a great number and penetration of e-payment systems – but these are not interconnected which makes it a hassle for consumers even though easy solutions could be at hand to link them to one another.

Fintech Companies Are Also Doing Their Part

Companies and individuals in the country are also doing their part to upkeep a vibrant fintech arena.

Block 71 at Ayer Rajah, proclaimed as the world’s most tightly packed entrepreneurial eco-system with close to 750 start-ups, has been producing many technological companies, several in the fintech space, which are ready to make their mark in Singapore and beyond.

At the same time, Lattice80, a co-working space, was launched in the heart of our Central Business District during the fintech festival. Claiming to be the world’s largest fintech hub, Lattice80 says it prides itself on creating an eco-system for fintech start-ups to collaborate, connect and co-create.

Events like ShareInvestor’s InvestFair has also started to adopt a fintech spin to put forward a relevant event for audiences. DollarsAndSense was invited to be the moderator of two panel discussions this year, and we gained good insights into what the industry was doing.

How You Can Benefit From The Fintech Wave

In the insurance space, there are more and more companies trying to sell insurance online. This means consumers get more information and may pay less in commissions to insurance agents if they’re savvy enough to buy the insurance products they need.

Some new insurance companies are also trying to be the Agoda of insurance, where they list products and help you compare and rate insurance policies, letting you make a more informed decision. One such company you can buy travel, car, home, pet or maid insurance from is Insurance Market, which does not have a single agent selling products for the company – everything is done online.

Within the payments space, e-wallets and mobile applications such as DBS’ Pay Lah!, OCBC’s Pay Anyone as well as a peer-to-peer payments system Pay Now that allows consumers to transfer money to anyone. Mobile payment solutions have also been accelerated by Samsung Pay, Apple Pay, Google Wallet, PayPal and even cryptocurrencies such as bitcoin playing their part ensure consumers have the most convenient solutions to make their payment. This space is one of the most vibrant with many players in the market.

The lending space is predominantly catered to companies that require financing. Some of these companies may not be able to receive it because they haven’t built enough traction to get a bank loan or in other occasions they only require it for a very short term. Based in Singapore, Funding Societies, the only Southeast Asian digital lender to ranked in Fintech 250, a global list by CB Insights of the top 250 fintech companies in the world.

Also Read: One FinTech Company Hopes To Help SMEs Solve Cash Flow Challenges That Even Banks Have Problems With

Funding Societies provides P2P lending to SMEs in Singapore, Malaysia and Indonesia. Even though they lend money out to riskier borrowers to earn a higher rate of return, they have a robust system in place to ensure credit risk is minimised. Investors like us can earn higher returns by putting our money with them. To-date, Funding Societies has made over 750 loans and have a repayment rate of 96.1%.

Investing is another sector that investors can greatly benefit from. Traditionally, we used to use brokers and this gradually moved to many people investing through online portals. The next wave is to leverage on robo-advisors to invest your money for you.

Companies like iFast has its My Assisted Portfolio Solution (MAPS) that frees you from the challenge of building a robust investment portfolio and then having to constantly monitor and rebalance it. And because this is done through algorithm-based investing, transaction and management fees are brought down too.

Read Also: FSMOne: How Singapore Investors Can Now Trade SGX Stocks With The Same Platform They Use For Bonds & Unit Trusts

Funding Societies is a DollarsAndSense Brand Connect partner. If you are interested to know them better, you can find out more on what they do on our DollarsAndSense Brand Connect Page.

5 Useful Tips To Keep Your Business Finances Healthy

A good financial condition holds your business together. Without the right financial management, a business is as good as doomed. Healthy finances allow your business to function smoothly. The thing is, not everyone is a financial guru. Chances are you’re not one either. But you don’t need to be a math genius to keep your company finances in check. Here are a few quick tips to help keep your finances healthy.

Track Your Expenses, Including Hidden Costs

What do you use your business money for? Whether it’s for office supplies, travel, employee meals, you need to track all your expenses. This applies for any hidden costs, too. For example, maintenance, upgrade, and training costs are not included in the price tag of new equipment, but they are costs nonetheless.

Once all the numbers are in front of you and you have taken the time to tally up total cost, you can easily make a proper financial plan, including a budget.

Read also: 5 Steps For Better Cash Flow Management

Establish a Routine

One of the most important habits to keeping your finances healthy is by staying organized. But you won’t be able to do that without a system or routine to keep you on track.

It doesn’t need to be complex, but having a designated time every day or every week to go through your bookkeeping will help you stay organized. After all, it’s better overall to keep an eye on your accounting once a week rather than letting everything build up over a few months.

Don’t Forget About Your Taxes

All businesses must pay tax on their income. Period. You need to start paying taxes from the time you make your first earnings. But the amount of tax you need to pay might vary, depending on your business and where you run your business.

Invest in Accounting Software

You might have already hired an accountant, but it’s always a good idea to invest in reliable accounting software. It can help you effectively track your finances and help you get an accurate picture of your profit, loss, and income statements. If possible, pick a cloud-based accounting software so that you can access your business financial data anytime and anywhere. This allows you to collaborate with your accountant or bookkeeper regardless of everyone’s current position.

Read also: Growing Your Business Without Breaking The Bank

Build and Maintain an Emergency Fund

An emergency fund is money prepared solely for emergency purposes. The money is intended to help you pay for things that wouldn’t be normally included in your regular budgets, such as an economic downturn or large increases in facility or material costs. Ideally, you need to save three to six months’ of expenses in an emergency fund, but we think it’s better to save more.

A healthy finance indicates a healthy business. To keep your business finances healthy, you can start with the five quick tips above and don’t forget – good accounting and bookkeeping habits are the basic foundations for your business financial health!

Find out more about SME Business Loans through crowdfunding via the Funding Societies.

Funding Societies is a DollarsAndSense Brand Connect partner. If you are interested to know them better, you can find out more on what they do on our DollarsAndSense Brand Connect Page.

Is Your P2P Platform’s Interests Aligned With Yours?

Peer-to-Peer (P2P) lending platforms earn fees from matching borrowers with investors, but investors bear the full risk if loans default. Thus, it is important for investors to pay attention to the risks associated with the ‘originate and distribute’ model and look for lending platforms whose interests are aligned with investors.

Watch this video to find out how to check if the interests of platforms are aligned with investors:

Read also: 5 Things That You Can Learn From How Temasek Holdings Invests And Builds Its Portfolio

Find out more about the peer-to-peer loan at Funding Societies here.

Funding Societies is a DollarsAndSense Brand Connect partner. If you are interested to know them better, you can find out more on what they do on our DollarsAndSense Brand Connect Page.

Starter’s Guide: 6 Different Types Of Investments For You To Consider

If it is long-term financial security you are after, you will have to start investing – and better sooner than later. In this post, we will focus on the types of available. Major instruments include:

  1. Time deposits

A time deposit is a bank deposit with (i) a higher interest rate than a regular savings account, and (ii) a clear date of maturity. There are penalties for early withdrawals but once the account reaches maturity, you can withdraw funds without any fines. Or you can choose to leave your funds for another term. The longer you leave your money alone and the higher the amount of funds, the more interest you earn.

Time deposits are considered a low-risk, safe form of investment. It’s also easy to set up and is not complicated to grasp – so much so that time deposits are considered a beginner’s investment.

There are disadvantages, however. You can’t touch your funds during the term’s duration, so make sure you can afford to have your money locked away for the time being. Also, while a time deposit’s interest rate may be higher than a regular savings account, the same interest rate is lower than other types of investments and is in fact so low that time deposits’ rates often lose out to inflation rates.

  1. Precious Metals

Gold is a classic investment that remains popular throughout Asia. There are differing opinions on whether or not gold is still a viable investment. For your reference, we will include three varying arguments: from Investopedia, from CNN Money, and from the Daily Telegraph.

In general, gold and precious metals preserve wealth against rising inflation. For a long time, they have been considered safe investments during political and economic upheavals.

However, gold prices are actually very volatile. Also, gold pays its owner no income, unlike say, bonds or dividend stocks.

  1. Property

Property serves a similar function to gold: it is seen to preserve wealth against rising inflation. The value of property generally appreciates overtime, making property a popular long-term investment.

However, the main disadvantage of investing in property is glaringly obvious: entry cost is high. You need a lot of money to buy property. Additionally, property is not liquid and requires plenty of upkeep.

If you do have the resources to invest in property, you have options. You can hold on to your property and wait for its value to increase before selling it off for profit. Something else you can do is rent your property.

Renting your property is a great way to generate steady, passive income. However, you run the risk of ending up with a bad, destructive tenant. Or worse, no tenants.

  1. Bonds

When companies and governments need funds – perhaps to expand, perhaps to build infrastructure, they can choose not to borrow money from banks. Instead, they can issue bonds. Basically, bonds are a form of debt where a corporation/government is the borrower, while you – the bonds buyer – are the lender.

For example, if you buy a bond with a face value of $1000, an interest rate of 6%, and a maturity of five years – that means you’ll consistently receive $60 of interest per year for the next five years. When your bond matures after five years, your $1000 will be returned to you.

Bonds are lower-risk investment, but provide lower returns than, say, stocks. However, bonds’ fluctuations are also less dramatic than stocks. In addition, like time deposits and unlike gold, bonds provide a stable passive income.

  1. Stocks

Stocks are arguably the most well-known of all investments. Stocks are shares in the ownership of a company. When you own a company’s stocks, you have a claim on the company’s earnings – also called dividends. Stocks are popular for a reason: they offer higher returns than other instruments like bonds and time deposits. However, stocks are higher-risk investments, with prices rising and falling dramatically.

Ultimately, there are two types of stocks: dividend stocks and growth stocks. A growth stock is a stock in a quickly growing company. However, growth stocks pay back none of the company’s earnings as the growing company would rather use their earnings to expand their business. The only way you can make money from growth stocks is by selling off your stocks. Dividend stocks are the opposite. They pay stockholders part of the company’s earnings. The more dividend stocks you own, the larger your dividend portion.

While you can make money selling off excellent growth stocks, there is no guaranteed return. Meanwhile, dividend stocks replaces your income by paying you back in dividends. It all depends on your risk tolerance.

  1. Alternative Investments

Traditionally, alternative investments include investments that are not in the traditional forms of stocks, bonds, and cash assets. Artwork, antiques, and precious jewelry are all considered alternative investment.

Once upon a time, alternative investments were more intended for the wealthy. After all, you need money to build a painting or jewelry collection.

However, the status quo is changing thanks to the development of financial technology. Forms of alternative investments are increasing. A notable example is peer-to-peer lending.

Peer-to-peer lending platforms match investors and borrowers via digital technology. Borrowers get loans with competitive interest rates and investors are consistently paid back in installments.

Compared to other forms of alternative investments, the entry cost to investing in peer-to-peer lending is low. Like bonds and dividend stocks, peer-to-peer lending is a good source of passive income. While it does carry risk because borrowers can default, a good peer-to-peer lending platform will have performed the necessary due diligence.

Find out more about Alternative Investments through Funding Societies here.

Funding Societies is a DollarsAndSense Brand Connect partner. If you are interested to know them better, you can find out more on what they do on our DollarsAndSense Brand Connect Page.

What Is P2P Lending And How It Actually Works

The Peer-to-Peer (P2P) lending sector has gained quite a fair bit of attention as financial services have taken greater heights in its innovation phase in Singapore.

Read also: 3 Reasons Why Peer-To-Peer Lending Should Be In Your Portfolio

Whether you are an interested lender or borrower, it is important to note the pros and cons of P2P lending. Watch this video to find out more about P2P lending and how it actually works before considering it as part of your investment portfolio:

Read also: Three Key Risks Of Peer-To-Peer Lending

Find out more about the peer-to-peer loan at Funding Societies here.

Funding Societies is a DollarsAndSense Brand Connect partner. If you are interested to know them better, you can find out more on what they do on our DollarsAndSense Brand Connect Page.

The Myths and Misconceptions about Peer-to-Peer Lending

Over the past couple of years, peer-to-peer (P2P) lending has become an excellent alternative source of business financing, especially for SMEs and start-ups. With peer-to-peer lending, SMEs and start-ups can gain the funding they need for business development. Not only that, peer-to-peer lending is attractive to investors too, with its high returns and easy concept. However, with the rise of peer-to-peer lending, some myths have attached themselves to the concept. Want to separate fact and fiction? Here are some myths and misconceptions about peer-to-peer lending, along with the reality.

“You need a lot of money to get started”

False. In fact, one of peer-to-peer lending’s key advantages is its low entry barriers. Take our investment product, for example. With a S$1000 minimum first deposit at Funding Societies, you can start investing – and for better diversification, you can invest S$100 into ten loans each. You don’t need much to get started at all.

As a P2P investor, you also have flexibility as you are able to choose from the loans provided. You get to pick whichever loan has the tenor and interest rate that appeals to you most.

“It’s not a mainstream investment”

It depends on what you think of as “mainstream.” Yes, P2P lending as a concept has gained traction only recently, but there’s really nothing new about a business model where investors pool together the amount needed for a loan requested by a borrower. But these days, P2P lending activities are easier to facilitate thanks to online platforms and digital technology.

 

“There are no regulations for peer-to-peer lending”

One of the typical misconceptions about peer-to-peer lending is that the model is not yet regulated so investing in P2P lending or borrowing from a P2P platform can be risky. But it really depends on the region and country. In Singapore, MAS (Monetary Authority of Singapore) has issued a framework for the P2P lending model. Look for a local P2P lending platform that has been licensed!

 

“Peer-to-peer lending is crowdfunding”

Not really, but it’s easy to make the mistake. After all, peer-to-peer lending is a category of crowdfunding. Certain principles are the same, but there are a few differences between the two concepts. Crowdfunding pools resources from multiple individuals to gather financing for a particular project, perhaps a creative project or the creation of a product. Sometimes the individuals who help pitch in money for a crowdfunding campaign get rewarded with gifts and sometimes there are no physical rewards, similar to a donation.

Peer-to-peer lending, in the meantime, operates more like a lending and borrowing model. Investors and borrowers are connected through an online facilitator. Together, investors pool together finances for borrowers. The borrower will use the disbursed loan and repay his investors with interest.

 

“If you lend money on P2P platform, it will be locked for a fixed period”

Well, yes. A P2P investor is asked to commit funds for a fixed period, but for a shorter period than most other investments. On our platform, loan tenures range from 3 to 24 months, which compares favorably to other instruments.

We hope the above have dispelled some of the tangles and confusion. With its advantages, P2P lending is an attractive solution for both investor and borrowers. Do you agree?

Find out more about the peer-to-peer loan at Funding Societies here.

Funding Societies is a DollarsAndSense Brand Connect partner. If you are interested to know them better, you can find out more on what they do on our DollarsAndSense Brand Connect Page.

This New App Can Help You Kick Start Your Investment Journey

Peer-to-Peer (P2P) lending is growing part of investment portfolios in Singapore. This growing adoption is helped by FinTech companies like Funding Societies, which has a powerful yet easy-to-use platform that helps connect SMEs borrowers to a pool of willing lenders who lend them money in return for higher interest rates.

Read Also: 3 Reasons Why Peer-To-Peer Lending Should Be In Your Portfolio

For those new to P2P lending, check out this handy infographic:

Read Also: Three Key Risks of Peer-to-Peer Lending

As Singapore’s leading digital lending platform, Funding Societies provides P2P lending to SMEs in Singapore through an online marketplace, while giving individual investors the opportunity to lend your money for much higher returns.

In keeping with their goal to make investing easier and more accessible, Funding Societies has launched a mobile app so anyone can add P2P lending to their investment portfolio.

Through this app, you can check on upcoming investment opportunities as well as monitor the status of your portfolio wherever you are. If you’re not already a user of the Funding Societies platform, you can sign up and start investing from within the app.

The Funding Societies app is available on both iOS and Android devices. Do check it out and let us know what you think!

Funding Societies is a DollarsAndSense Brand Connect partner. If you are interested to know them better, you can find out more on what they do on our DollarsAndSense Brand Connect Page.

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Choosing the Right Crowdfunding Product

Interested in raising capital through crowdfunding? We’re not surprised. After all, crowdfunding comes with some pretty sweet advantages. The crowdfunding process is cheap, quick, easy – often entirely online. Because crowdfunding requires no collateral, it is a great alternative to traditional funding such as secured loans.

As we discussed in our last article, there are three major forms of crowdfunding: rewards-based crowdfunding, equity crowdfunding, and peer-to-peer lending. To learn more about them and compare the different forms, click here.

Each form serves a different purpose and targets a different demographic, so it is crucial that you pick the right crowdfunding product. Which crowdfunding product is your match? Below, we have provided a handy list for you to use. Read on!

Rewards-Based Crowdfunding

  • Rewards-based crowdfunding is for you if you are trying to pitch a project. It is meant to raise capital for products or services. Its purpose is not to fund your overall business.
  • Rewards-based crowdfunding is ideal for those in the creative or artistic field, or those developing new products and technology to get market validation and pre-orders before starting production.
  • Most rewards-based crowdfunding campaigns expect to raise around $10,000 – $100,000 according to this article.
  • This is a crowdfunding form that requires effort on your part. You need to create a business plan for your brand and your project, you need to do research, think about legal and tax issues in advance, plan the rewards you will offer your supporters, and craft a compelling story or video to market your project and entice new backers. For more details, check out this Forbes article.
  • Costs include: reward and shipping costs, income taxes, and platform fees.
  • Key platforms include Kickstarter and Indiegogo. Coincidentally, Kickstarter has opened new branches in Asia, including Singapore.

Equity Crowdfunding

  • Equity crowdfunding’s primary purpose is to fund startups with strong growth potential.
  • Because equity crowdfunding is essentially a barter of company shares for funds, ask yourself: are you willing to part ways with your company shares? Are you someone who likes to be in control of your company? If you are indeed willing to let go of company stocks and are looking to raise a large amount of funds, then equity crowdfunding is for you.
  • Equity crowdfunding campaigns expect to raise somewhere between $250,000- $3,000,000.
  • Like rewards-based crowdfunding, equity crowdfunding requires effort on your part. Your startup may be very promising, but you still need to pitch its worth to potential investors on your chosen platform.
  • Costs include platform fees and of course, partial ownership of your business.
  • Key platforms include: AngelList and CircleUp.

Peer-to-Peer Lending or Debt Crowdfunding

  • Peer-to-peer lending provides loans with competitive rates and no collateral. Depending on your chosen platform, you can crowdfund personal loans or business loans.
  • However, peer-to-peer loans are especially useful for SMEs and the underbanked segment.
  • Ideal for small businesses searching for short-term credit to strengthen cash flow, to expand their companies, to finance a newly secured project, or just for operating expense.
  • Here’s an example: businesses with income tied in accounts receivable are a great target segment for peer-to-peer lending as they can have quick loans through invoice financing to start new projects while they wait to get paid.
  • A good option for younger, smaller, and revenue-generating companies, but with no suitable assets for secured loans.
  • Peer-to-peer lending campaigns expect to raise around $20,000-$500,000.
  • Requires less effort on your part compared to rewards-based crowdfunding and equity crowdfunding. Your chosen platform will do credit assessment to see if you are suitable for a loan and take care of the rest. You don’t need to market your funding needs.
  • Costs include platform fees and loan interest.

If peer-to-peer lending sounds like the crowdfunding product for you, you can learn more here and apply for a peer-to-peer loan at Funding Societies here.