Rebalancing Bitcoin Investment March 2016

US Dollar declines against EUR and dragging BTC along this month. So, diversification between USD and BTC do not make sense anymore. I have to diversify into EUR as well, as soon as possible.

Take aways:

1. BTCJam is still gaining profit. This is because it calculates account values based on future receivables as well. However, the profit is halved this month and it is not enough to offset loses from other investments.
2. Other investments suffer from low USD, low BTC or both. This is dragging down the entire portfolio into red.
3. The BTCPop Pool is the biggest loser. I will move most of the funds there to BTCjam. I am keeping funds on Loanbase, the second biggest loser. This is because, I am still putting it on trial since last month.
4. Virtually all loans in my portfolio are currently not in EUR and unsecured. So, I am starting to invest in Mintos. Most of its loan are in EUR and secured (with property or a car)

 Choosing Euro P2P Lending:

1. I am not investing into Bondora, right now, because its loans are unsecured like the rest of my portfolio. So, no diversification there.
2. I am not investing into Twino, right now. Most of its loans are payday loans. My decision stays, even though most of its loans are secured with buy back guarantee,
3. So, Mintos is obvious choice right now. I just want to diversify on Euro business loans, car credit and mortgage right now.

Rebalancing Bitcoin Investments February 2016

Bitcoin price is up, however US Dollar is going down against Euro. As result, this month is a reverse of last month. Bitcoin heavy investment, such as Loanbase and BTCPop, has positive cashflow, while USD-heavy, such as Bitfinex has negative cashflow.

Take aways:

1. BTCjam has balanced loans on Bitcoin and USD. So, it is not affected too much by fluctuation.
2. Loanbase loans are almost exclusively in Bitcoin, similar to BTCPop. So, they benefit the most from increasing Bitcoin price.
3. I manage to get positive cashflow on three P2P lending platforms. Bitbond could be the fourth patform in coming weeks.
4. Bitfinex loan has been interrupted several times this month. This is causing my money sit idle doing nothing for several days. I might divest from Bitfinex because of this.
5. My trading bot has made several good trade this month. But, the yield is low and cannot overcome transaction fee and declining USD exchange rate.

I have confirmed with Loanbase Support that there is no automatic way to calculate Loanbase Account Value. So I have to calculate it myself:

• BTC Account Value =  Total + Autoinvest Balance + Invested - Repaid
• USD Account Value = Invested - Repaid
• BRL Account Value = Invested - Repaid
• To get the Loanbase Account Value, convert all of them into the same currency, such as Euro, then add them up.

Rebalancing Bitcoin Investments January 2016

January is a rough month. Bitcon price drops 10%. Fortunately, some of my investments are either tied to fiat or have high yield to counter it.

My rebalancing decisions:

1. I am starting "three piggy banks" this year. My goal is 10% of my net salary should go to high yield investment, 10% for rainy day, 10% for social/donation. Initially, I will inject 50€ worth of Bitcoin every months and rebalance the portfolio for maximum yield.
2. I empty my 0,3 BTC idle wallet, because the Bitcoin price is 10% down causing negative 10% yield. About 100€ rebalanced to "Loanbase AutoInvest". It is still under 1% Yield/month. Maybe because loanbase is slow on funding loans and most loans are on BTC.
3. My self-made trading bot is still losing money. I have rebalance it last month into the minimum. So, I don't have to do it again. It is getting better though.
4. I rebalance 50€ "BTCpop 5% APR Saving Account" into "BTCpop A-rated Pool Account". It was losing money due to Bitcoin price down. I am hoping, moving into higher yield account should offset the price fluctuation.
5. My Bitfinex Margin Funding is going steady at 0,004% daily. So, I am not going to touch it.
6. My 50€ capital injection goes to BTCjam Autoinvest. There are two reason it has good yield when Bitcoin price is down: First, a lot of the loans are tied to fiat currency. Second, no default loans yet, because I am a new member.

Yield calculation:

1. The capital-growth is account-value-this-month minus last-month minus capital-injection.
2. The yield of Trading, Pool and Margin Funding is simply the capital-growth divided by account-value-last-month. This is simple-yield.
3. The yield of Loan Funding is simple-yield divided by 12. This is because most loans have 12 months duration.

My dream:

• This month the total yield is 3,5% or 42% APR. This APR is bigger than in the typical Business/Property ROI in Money Race 2 game.
• In Money Race 2 game, I can reach financial freedom in 50 turn or 1 year equivalence (1 turn=1 week). This is due to 1000+ $/€ capital injection each month. In real life, I hope I could reach financial freedom in 10 years or less with less than 100€ monthly capital injection.

Money Race 2: Multiplayer Cheat-sheet

Here is my Money Race 2 Cheat-sheet to win multiplayer game:

• Pay off Credit Card (120% APR), Bank Loan (60+%), Car Credit (36+%) ASAP! 
• Buy rare 36+% ROI Business/Property now and 12+% ROI if you have cash 
• Ignore <12% ROI Busines/Property, mortgage and stock dividend for later
• Sell property that lost value.

Once you win your first single player race, you might want to try the multiplayer competition. There are several potential advantages when you do this:

1. Low difficulty level gives you profession with less monthly income and less debt. Less debt makes it easier to win. For example when you win a Lottery, the price is fixed to 150000 regardless of how little your debt is. This is unlikely, by if you got fired, you have less to lose and need only small bank loan to survive into the next payday. 
2. If you are out of spin, other player might gives you some FREE spins to keep you playing. So, you could basically play this game for FREE if you want to. 

Timing is very important in multiplayer game. Each player has three hours to complete five spins. And your total income and expenses is calculated only on Pay Day that happens after every fourth spin. So, try to pay off Credit Card, Bank Loan and Car Credit before the fourth spin.

Bankruptcy only happens on Pay Day. So each time, you need to know how many spins away you are from the pay day.  You can get this information by scrolling down the Stats page from the Advanced menu. In this case, you are on you 20th Turn. So, you have four spins into the next Pay Day.

You can think of one spin as one week. So, one Pay Day happens every four weeks or a month. My strategy is to keep buying as much as 12+% ROI property/business offers during my first three weeks. Then I pause, think and prepare for the important Pay Day:

1. My income is positive (I am not fired from my job and has not many expensive debt). If this is the case, I will try pay of Credit Card, Bank Loan and Car Credit if any. Otherwise I will try to buy 12+% ROI properties from the market if any.
2. If my income is negative, then I will try to sell some or all of my properties on the market. I also sell property if it lost its value. Worst case, I will try to get just enough loan from my bank to survive the next Pay day.

Note, I don't use the stock market. This is because it takes too much time to calculate ROI, buying and selling stock. The ROI of stock dividends is under 12% or worst most of the time, except in Level 1. There, the stock ROI can be as high as 21%. They are useful close to the end of a race, when you have so much money but no property to buy. 

Money Race 2: Which Assets to Buy

This article is all you need to win your first single player race. I follow this guide and win the game in 7 spins. This is partially thanks to a lottery win when I spin into an orange surprise area. 

Look into the following "Income Statement" page. Only income from business/property and stock dividends that counts as passive income. You win the game when you gather assets to generate enough total passive income bigger than total of your expenses. 

You get an offer to buy a business or a rental property when you spin into a purple area. You can trade rental property and stock in Advanced menu, which will be explained in later posts.

You need to scroll down the offer to see the "Total to Pay", 2,614 in this case. Do not buy it unless if the "Total to pay" is lower than your current cash, 6,720 in this case. This is basically the down payment to buy the business/property.

To win the game, you will need to buy only cashflow positive business/property, the value is 60 per month in this case. The higher the ROI (Return of Investment), the faster you win, 27% per year in this case, or above 2% per month. 

If you are curious, the ROI is calculated from the monthly cashflow divided by Total to Pay, then multiplied by 12 months. So, 27% = 60/2614*12. The cashflow was calculated from monthly Income minus monthly Bank Payment. So, 60 = 70-10. 

The monthly Bank Payment covers only interest, 10 per month in this case, on the credit, 3396 in this case. The interest rate of the mortgage is low, 0,29% per month or 10/3396 in this case. 

You may touch the "Acquire" button to buy a business/property or "Pass" to skip it. The buy transaction will be executed if you have enough cash. Otherwise, you will see "Request a Bank Loan" card. 

The "Total to Pay", 19,243 in this case, will always be lower than your current cash, 19,818 in this case. So, you need to buy only business/property with positive Cash Flow after Payment to win the game, 379 per month in this case.

However, you should only request a downpayment credit as last resort. This is because the Loan Payment, 160 per month in this case, is very expensive. The rate is 4% per month or 160/4000 or 48% per year in this case. The 4% rate is multiple times higher than 0,29% normal monthly mortgage rate previously explained. 

To neutralise the negative effect of this 48% per year loan payment, you will need to either pay it off completely or buy another business/property with at least 48% ROI. The later one will be virtually impossible in this game.  So, you should really pay it off as soon as possible, or never take it in the first place.

Get Money Race 2 in Google Play Store.

Read next >> Money Race 2: Multiplayer Timing

<< Back to  Money Race 2: Best Cashflow Game Ever 

Money Race 2: Best Cashflow Game Ever

The Money Race 2 review: It is the best financial simulator app ever, in my opinion. While it is released by independent software company unaffiliated with Robert T. Kiyosaki's Rich Dad, it has all important elements from the original Cashflow board games. Both in single or multiplayer mode. 

This game has "Escape the rat race via passive income" goal and asset-gathering mechanics similar to the Cashflow for Kids. Each player has a profession chosen randomly to present unique challenge similar to Cashflow 101. It has dynamic stock market similar to Cashflow 202.

The game play is simple. Keep spinning the wheels. Buy assets in purple area. Go on until your passive income reach 100%. You can use the Advanced menu to play in the dynamic stock market or trade properties. 

You escape the rat race when your passive income, cashflow from your assets, exceeds your expenses. At this point, you can finish the game or continue into the fast lane. In the fast lane, the game runs indefinitely or until you reach the goal you set yourself. I found that you can get three stars if you reach 300% passive income before finishing the game.

The single player has five levels. The highest level allows you to buy the biggest business available, while occasionally cost you huge expenses, threatening you into bankruptcy.

I manage to buy five huge businesses after a long while in the fast lane on Level 5. My income is exceeding 1 million dollar per month. Yay!!!

Get Money Race 2 in Google Play Store.

Read next >> Money Race 2: Which Assets to Buy?

Beating buy-and-hold

The price of Bitcoin has increased 40% in the last 30 days. This gain is really hard to beat, if not impossible, with any trading strategy. So, I gave up and stop trading until next year.

Here are my top investment results, so far:

1. Buy and Hold (in Blockchain.info wallet): 40% gain
2. P2P Lending (BTCjam): 5% gain
3. Margin Funding (Bitfinex): 1,5% gain
4. Trading (Bitstamp): still losing