Investing | Notes from a Small Investor

Why a 20–30 Year Investment Plan Is Not as Simple as It Looks

Playing with historical data leads to several observations that may be relevant for anyone considering long‑term investing on their own, for example building a pension outside of traditional pension funds.

Data and Methodology

The analysis is based on the following data sources:

Comparing Balanced and High-Risk Strategies Over 20 Years. Part#1

Building long-term financial stability is more than just investing — it requires structuring your money according to risk, goals, and liquidity needs. Many advisors recommend dividing investments into three layers:

Safe fund: extremely liquid, covers urgent needs (accessible within days or 1–2 weeks)
Medium fund: moderately liquid, accessible within 4–12 months, used for larger purchases or income protection
Risky fund: long-term growth, higher volatility, less liquid

This article compares two strategies for a young investor with modest income, no major family obligations, and the comfort of parental support in emergencies. We simulate 20 years of investing, including a financial crisis and post-crisis recovery.

Fast, cheap, good – what to choose (p2p)

Article from 2015 with small update 2025

Every now and then someone asks me a simple question: “Where should I invest?”

It sounds easy, but the real answer depends on several factors that people often overlook. To explain it, let’s start with something familiar. Continue reading Fast, cheap, good – what to choose (p2p)

Tracking Investment Returns: A Practical Guide Using XIRR

Any investment platform eventually has to address one uncomfortable topic: a real return on investment (ROI). Comparing ROI across different platforms is rarely simple. There are several reasons for this.

Different platforms use different methods to calculate returns. These methods are usually documented and publicly available, but users still often complain that the results shown by platforms are too optimistic, for example:

Not adjusted for defaults or overdue loans.
A platform may say “only one payment is late”, meaning they do not treat the entire loan as potentially defaulting — even though for the investor, the full principal is at risk.
Missing negative data or hiding losses.
Some platforms ignore fees or other costs (transfer fees, service fees, currency losses). These still affect your true return, even if the platform excludes them from its calculations.
Calculated in a way that flatters the platform rather than reflects reality.
Platforms rarely start their presentations with pessimistic scenarios.

Because of this, it’s up to us — the investors — to calculate realistic and comparable returns ourselves.

Continue reading Tracking Investment Returns: A Practical Guide Using XIRR