The interviews series are continuing! This one is for all my friends who’re still wondering what to do with their savings. For the ones who are relying on a financial advisor/broker to take care of their long-term net worth and especially the ones who don’t dare to invest. It’s never too late to start!
Enter Alexander, the author of the Financially AI website. The first thing I love about Alexander is that he is only 26years old, and he already has a well-thought-through strategy towards FI.
He distributes the little funds he has (he’s still a student) into various p2p* & crowdlending* real-estate platforms. This way he minimizes the risk and every month he receives real passive income.
He documents his journey on his Financially AI website and keeps his eyes on his goals BIG TIME – go check it out!
*p2p or peer to peer is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. No banks are involved.
*crowdlending – crowdfunding in the form of a loan that must later be repaid
Before further ado, the stage is all yours Alexander!
Can you introduce yourself?
My name is Alexander. I am in my mid-20s doing my master in architecture and I am on my journey towards financial independence (FI).
In my free time, I like to read about FI and I have some side jobs to sustain my student life.
I first heard about FI in 2016. My own journey towards FI started in 2017. At that time I was heavily invested in the stock market but I did not like the fluctuations and uncertainty so I searched for other strategies to diversify. Recently I decided to document my journey toward FI on my blog Financially AI.
What does financial independence mean to you?
To me, FI means that I would have the ability to live life by my design. I don’t have to work for money once my passive income exceeds my living expenses.
It’s not about not working. It’s about doing work that you’re passionate about and that is fulfilling.
FI means freedom – freedom from fear, freedom to choose, and freedom to roam.
What would you like to dedicate yourself to when you reach financial independence?
I am not sure yet, I have still a lot to learn. But the generic answer, for now, would be: Following my passion and enjoying life as it comes, not sure what this would be at that time. I think the journey to FI is a never-ending process you can always go further. Once you achieve a long-term goal you can set new ones.
At the moment I am focusing on the journey and like to keep it open-minded when I reach my FI.
What is your financial goal?
I am searching for ways to earn a fully automated long-term income source with as much diversification as possible. The amount I want to gain is not set in stone yet. I focus on growing my portfolio and learning more about FI and ways to get there.
On my blog Financially AI, I formulate a list of small goals I like to set for myself. One short term goal is earning 50EUR a month in passive income.
It doesn’t sound like much but I want to grow this number each month and to compound my interest. Each free euro I earn helps me achieve my goals. One of my greater goals would be to earn a consistent automated income of 1000EUR a month.
I hope one day I can invest in some properties to rent out. As a future architect, it would be nice to see how this evolve.
What is your strategy?
Saving & improving my income
- I am saving as long as I can remember so it feels natural for me to exploit this good habit.
- Each month I set a saving goal that I need to achieve before I even think about investing. If I do not achieve this saving goal I do not invest.
- At the moment I’m doing my normal saving habit on my savings account, and I am building an emergency fund (around 2k).
You are the first bill you pay
- The first bill being paid when you receive your income is yourself and your financial goals.
- Paying yourself first builds a great habit of ensuring your financial goals are being put first before other expenses. I am prioritizing saving, investing, getting out of debt or preparing for the next major purchase.
“That which is measured, improves”
- I use an app called BudgetMeister(BM) on my smartphone to measure all my day to day expenses to get a quick overall view.
- A personal Excel document where I track all my investments strategies in detail. This is also the place where I keep track of all my saving accounts.
- Learning and investing is a never-ending process.
- Searching for ways to automate my investment portfolio.
- Documenting my findings on my website to share with you.
- At the moment I am mostly invested in the stock market, p2p and crowdfunding real-estate. The last two are fairly new strategies relative to the stock market. For the stock market, I use Etoro. For dividend and ETF investing I use the well know Degiro broker.
- Focus on one strategy at a time but diversify in the long term!
- At the moment I like to use p2p & crowdlending real-estate platforms over the stock market because I love the certainty of monthly income it gives me. There are fewer fluctuations or stress involved with it. Of course, all investments carry a degree of risk.
- Testing a p2p platform or a crowdlending platform is really important. In recent years p2p is becoming more and more known to investors and a lot of new platforms are coming with that which is good and bad. Some of them are better than others.
- That’s why I did not invest in all of them. I test them by looking at their site, by finding out how much transparency they give and how long are they operating, what is the skin of the game do they over security or buyback, etc… Testing with small amounts making a deposit combined with withdrawal before I invest with them.
What motivates you to follow the strategy day in day out? How do you stay on course?
The idea of having the financial freedom to do whatever I fancy. Seeing my portfolio grow each month is a motivation in itself.
Achieving short-term goals and finishing my month to-do list on my website gets we motivated when I complete them.
What are the obstacles you are struggling with?
As a student and not having a full-time job, it is hard to invest a big amount of money each month. But on the plus side, I have more free time to learn about some strategies before I invest in them.
Most of my money goes to food and transport. I don’t need to pay rent because I still live with my parents which is a huge help when trying to save and invest.
As soon as I finish university I will start working and my strategy as it is now will change drastically.
What is one thing that I can apply today that will have a positive impact on my finances?
What gets measured gets improved
– Robin S. Sharma
Take time to learn, know what you invest in and measure your spending habits so you can set a budget for yourself. Pay yourself at the beginning of each month and use this to build a portfolio.
Automate your saving.
Automate your investments.
Automate your income.
Where can we find you online and learn more?
You can find more on my blog FAI.
Photo credit: Alexander’s archive