I recently had the pleasure of sitting down with my friend and fellow blogger, Domenico, who runs the website FinanceShot. We talked about all things personal finance and how to increase your passive income. Let’s dive in and talk to Domenico from FinanceShot.
Ciao Domenico! How are you? Thank you for taking time out of your busy life to answer a few questions about your passive income journey and what advice you would give to future investors.
Now, you run the popular personal finance site FinanceShot where you give updates to your followers about your personal financial journey. I would like to ask you some questions relating to your site and your investment strategy so we can get a better understanding of what makes you stand out from the rest.
First of all, why start FinanceShot? And why have you chosen to take hold of your investment journey?
Hello everyone, it’s a pleasure for me to be here. I’m currently studying Corporate Finance, and I’ve always been interested in finance and personal finance. I really enjoy managing my money, and my dream is to be financially independent only thanks to my efforts. I know the path will be long and hard, but the reward is huge. That’s why I’m working hard in order to achieve this goal.
My financial story starts at the end of 2017 when I started to invest in my first P2P Lending platform (ViaInvest). For those who don’t know what P2P Lending is, here is a brief explanation: P2P Lending is about loans between private individuals. After this first investment, I decided to continue investing, and I gathered a lot of information about this world. I learned the importance of diversification, so I invested in 2 or 3 new platforms in the next months. Today I’m currently investing in more than 10 different platforms and I still have a lot of work to do. In addition to P2P Lending platforms, I’m investing in Real Estate crowdfunding platforms, that allows investors to finance real estate projects.
As you said above I’m the owner of FinanceShot. I opened it in May 2018. My intention was to share my path to financial freedom. I firmly believe that it’s very important to keep track of our financial situation. This is what encouraged me to open a website dedicated to personal finance.
What is the main goal behind your investing and showing it on FinanceShot?
As I said before, my main goal is to create a monthly and stable passive income. In order to do this, I’m investing my money on P2P Lending and Real Estate crowdfunding platforms and copy-trading on eToro, which you (StockUpWithJoe) uses for trading.
In parallel, I’m also investing part of my investment portfolio in the stock market. I’m at the beginning of my path in the stock market, and I still have to study a lot because it’s a dangerous world for those who invest without having studied this complex topic.
My goal for 2019 was to reach a monthly passive income of 100 EUR. Instead, I’m obtaining incredible results in the last months, and as you can read in my last Passive Income Report in May I earned more than 200 EUR of passive income. This is an incredible result for me, and I still have to realize how fast things are going.
Do you find that your followers prefer your passive income updates over your other blog posts? How do you keep people up to date about your journey?
Considering that I opened FinanceShot just to share my monthly passive income I believe that my readers are more interested in this kind of article. However, In the last few months, I noticed that they are also very interested in the other blog posts. For instance, the post that I wrote about the beginning of my adventure on eToro received a lot of views and good feedbacks.
In the last months, I’m trying to write about new topics which I consider useful for those who want to undertake this financial journey with me. I’m writing about investing books, financial podcasts and many more interesting topics.
I’m currently offering many options to follow my blog. Readers can subscribe to it, and doing so they will receive directly on their email every new post. In addition, they can follow the Facebook page that I created for FinanceShot.
On your site, you go over all your investments – what has been the best investment strategy you have implemented to date?
I keep track of all my investment on the My Investment Portfolio page on my blog. Here you can find the composition of my portfolio and my current and past performances.
I’m happy about my current investment strategy. In 2018 I obtained a return of 9.4% and I think that it’s a good result for a “passive” portfolio.
However, I still have to work on the diversification of my portfolio. For instance, I’m currently owning stocks of CocaCola and Cisco, and owning stocks of only 2 companies is never a good idea. Indeed my plan for the next months is to sell these stocks and to buy an ETF with dividends that can grant me a better diversification.
About the other elements of my Investment Portfolio, I think that I implemented a good strategy. I’m currently investing on more than 10 different platforms (P2P Lending and Real Estate crowdfunding) and here I have good diversification. I just have to increase my balance on each platform, but I’m on the right way.
What are your financial goals for 2019 and what about by 2025?
One more important post that I write every month talks about my Financial Goals for 2019.
Every month I write about their progress and my ideas for the next month. Let’s see the list of my Financial Goals for 2019:
- Reach a 7500 EUR P2P Lending portfolio
- Earn 1000 EUR of Passive Income
- Have 10 different firms in my stock dividend portfolio
- 15 different cash flow sources
- Read 5 financial books
- Increase my Net Worth by 20%
These are the goals I’m working on this year. I set them up at the beginning of the year, and I want to achieve at least 4 of them. If you want to read my last update, click here.
Regarding 2025, my main goal is to be at least 50% financially free. By this, I mean that I would like at least 50% of my expenses to be covered by Passive Income. This is not an easy goal but I’m confident I can achieve it.
I would also like that in 2025 at least 30% of my Investment Portfolio is made up of investments in the stock market (stocks, ETFs…) and my intention is to increase that percentage year by year.
In the meantime I want to conclude my studies and find a job related to what I’m studying, that is what I actually love.
What would you say to someone who says they don’t earn enough money to invest money?
It’s crucial to start saving money as soon as possible. It’s not important how much money you can save, just start to save it. You’ll be amazed by the power of saving.
I know that eating out 1-2 times a week is desirable, but think a minute about how much money you can save by reducing (not to zero obviously) the number of times you eat out. This is just an example but reflect on it.
Set up a “saving schedule” and respect it. Start with a little saving percentage and increase it month by month. Keep in mind that determination and commitment are the biggest determinants to financial freedom. Maybe at the beginning of your journey, you will have to make some sacrifices, but hold on and you will see that the reward will be worth it.
Start saving every month a percentage of your salary/earnings, even if it very little. It doesn’t matter.
In parallel start studying how you can invest your savings. Learn and understand the importance of diversification, risk tolerance and the other fundamental financial concepts. Once you deeply know 2 or 3 financial instruments start investing in them.
If you are determined and constant results will come.
If you won $10,000 today in the lottery, would you invest it? If yes, what would you invest it in? What would you do with the money?
I would invest it for sure. As I wrote in my last Financial Goals I’m currently saving money to invest in ETFs with dividends. At the moment this is one of my goals, so I would invest that money in ETFs with dividends. I would choose a mix of ETFs that distribute dividends and ETFs that reinvest dividends.
Do you prefer to reinvest dividends back into the stock(s) or take the cash dividend and invest elsewhere?
Currently, I take cash dividends and reinvest them in other opportunities. In the future, I would like to make a mix between dividends reinvested on stocks in order to grow my stock portfolio and dividends not reinvested.
What is your risk strategy/mitigation style?
As you have probably understood, I really care about diversification. I know that investing can be dangerous, but it’s dangerous only if we invest without knowing the financial instruments we’re investing in.
I base my investment strategy on diversification (according to geography, sector, potential growth, financial instruments, time) and moderate risk tolerance. Never forget that the first rule to make money is to not lose money!
Just to make a brief resume, I invest in opportunities that:
- Are located in different states or continents
- cover different economic sectors
- are characterized by different potential growth
- use different financial instruments
- are characterized by a different time horizon
Fortunately, I had the opportunity to learn the most important financial topics during my studies at the university. I really suggest you learn these topics before start investing. I wrote many posts about important books that I suggest to who want to start investing. Here you can find my post about the 10 Investing books that you absolutely need to read.
What does earning a passive income mean to you? Retiring early? Having more time to spend with family and friends? Learning a new skill? Not being dependent on a salary?
For me, passive income means a mix of the things you listed in your answer. This is also the meaning which I attribute to financial freedom.
If I had to choose my priority, it would be having more time to spend with family and friends, because I believe that social relations are the most important thing that we have.
Finally, what is your advice to someone who is looking to invest?
Firstly, read many books, because there is always something to learn in this world.
Invest your money only on financial instruments that you deeply know. Never put money on something that you don’t truly understand.
Start tracking your expenses now. It’s important to understand where your money goes, so you can decide how much money to save. When you start investing, track also your performances and keep your portfolio always updated. Dismiss your bad investments and look for new investments.
That’s all guys. Thanks to Joe for giving me this incredible opportunity, it’s a big honour for me! I hope that this interview and my blog can help you to start investing with cognition.
See you on FinanceShot!
Well, that’s it! I like to thank Domenico from FinanceShot for taking the time to talk to us and I really hope you learned a thing or two about passive income. I know I certainly did! You can see the interview he did about my investments here.