I Dumped $400 into RiseVest. Here's What I Learned
Trust me, it doesn't always have to make sense.
Many people call me the Fintech Queen. But after what happened this week I doubt I’m worthy of that crown.
If you've read my previous newsletter about my money habits, one of the things I do is to save or invest my money as fast as I can so I don't get tempted to spend it.
This was one of those occasions.
…and decided to deposit my money in RiseVest.
I'm embarrassed to say this but for some reason I was surprised when I was asked what my monthly contribution would be. 🤦♀️
Anyway, maybe I'm being dramatic but…
Here are some things you’re expected to learn at the end of this newsletter:
Why investing in dollar-denominated assets is the smartest thing to do (especially if you're in Nigeria)
How RiseVest works
How to decide which plan to go for
But in return my challenge to you is to take a screenshot of the part of this newsletter that you found insightful and tag me @mary_imasuen (on Twitter or Instagram) with the hashtag #RelishAbundance.
Deal?
For those reading my newsletter for the first time, I’m Mary Victoria and one of the reasons why I love fintech is that they make it so much easier to invest in things I never thought I'd ever be able to.
And for me, that’s real estate.
Usually during a recession, the US housing market experiences a decline. But with the pandemic, the market is experiencing a move in the opposite direction.
With many companies implementing work from home policies and more millennials buying their own homes, there has been a boom in the housing market.
For us reading this here in Nigeria, investing in the US housing market could help with your portfolio.
When I saw this notification from RiseVest, I knew that the real estate market is one we shouldn’t miss out on.
Why should this matter?
It’s no longer news that the value of the naira has dropped against the dollar. Dollar is now sold at N503 to $1 in the parallel market. In the grand scheme of things, this only means that it’ll be a terrible idea right now to keep most of your net worth in naira.
I’m no financial expert, but in a time like this, the best place to look for investment options is in something that is dollar-denominated.
This where RiseVest comes in.
RiseVest helps you build your dollar portfolio. All you need to do is create a plan, fund it and then allow RiseVest to manage your investments for you.
For someone who is risk averse like me, you might feel more comfortable knowing that experts will be managing your money instead of you doing all the heavy work like research and analysis. The only thing you need to do is to maintain your commitment to invest monthly.
So what I did this week was to deposit $400 at once.
Although I’ve used RiseVest before when I was testing the app, that was the first time I deposited that much at once.
But as I spent more time on the app, I noticed and learned a couple of things I didn’t know when I first started using the app.
1. Look at percentages up close
Let’s take a look at their real estate plan.
The historical returns on the real estate plan is at 15% per annum.
But what most people see the “15%” and they hardly notice the words “per annum”. 15% per annum it means that you will get 15% returns on your investment at the end of the year.
But what’s interesting is that, if you’re looking to invest in the short term, you can set your real estate investment plan to 3 months or 6 months.
Here are the percentage returns you’ll get on your investments for those periods:
3 months = 3.75%
6 months = 7.5%
12 months = 15%
Now let's look at what the app says.
The percentage mentioned on the app is 12-15%. This may be because they want to make sure they give some sort of buffer. This could be because you can never predict the market.
So if you’re making your investment plans, you need to take that into consideration.
Now let’s look at the fixed income plan.
The dollar-denominated assets covered by the fixed income plan are bonds. There was a time when it clearly stated Eurobonds, but right now I’m not sure what kind of bonds they’re investing in.
The historical returns here is at 15% per annum. Just like the real estate plan you have the option of investing in the short term.
But this is where things get interesting.
What you see above is what shows on the app. But when you hit “Get Started” you get the following breakdown of the rate of returns:
3 months = 3%
6 months = 6%
12 months = 12%
You have 3 different percentages depending on the duration of your investment.
Unlike what’s written on their website, the app actually “guarantees” you 10% returns per annum.
Fixed income is a little more stable than real estate and stocks so I’m not sure if:
the difference is them giving some wiggle room in case the market is bad, or
they just forgot to update the content on their app or their website.
I personally go with the percentages that you see when you tap on “Get Started”.
Now let’s have a look at the last plan — the stock plan.
What we have on the website is 14% returns per annum, which is the same on the app.
Unlike the real estate plan and the fixed income plan you don’t have the 3 or 6 month options. This could be because of the nature of stocks. They’re not a predictable kind of investment. They’re more volatile than the other two investment plans.
I created a stock plan with a $10 monthly contribution for the next 12 months. And this is what it looks like.
This is how RiseVest came up with the projected estimate of $136.80.
Monthly contribution is $10. So, your total contribution at the end of the 12 months is $120. The additional $16.8 is the 14% returns from your investment.
It might look little at first glance, but it’s because you’re making a monthly deposit of $10. If you increase your contribution, you’ll inevitably make more in return.
That brings me to my next lesson.
2. Make regular contributions
RiseVest promotes an investment strategy called Dollar Cost Averaging.
In layman’s terms, dollar cost averaging is when you make a regular investment of the same amount of money irrespective of how the market is doing.
This is how it works:
Let’s say that you want to invest in stocks.
As we all know the stock market goes up and down depending on how the market performs.
Let’s say you’re committed to investing $10 every month no matter how the stock market performs.
In month 1 you’d invest $10.
In month 2 you’d invest $10 again but the stock market did a lot worse than last month.
In month 3 you invested $10 and the stock market out-performed month 1.
The reason why this strategy is good is because you’re making consistent investment. It’s extremely difficult to time the market. You can never tell how the market will perform.
When the pandemic hit, businesses were affected. The government policies changed and affected the performance of the market.
Almost every sector tanked. Not even the expert investor saw that coming.
In the video above, Rose shows all the figures of how much you can make through dollar cost averaging. She also compared the figures of how much you would make if you had some psychic ability to time the market. Hint: the difference wasn’t much at all.
3. Let RiseVest’s portfolio inspire you on what to invest in
Just the way you’re investing, so does RiseVest. And I recently found out that if RiseVest is heavily investing in a particular plan, then it’s something worth looking into.
RiseVest shares their portfolio on the app. When I first started using RiseVest, their most of their portfolio was invested in stocks. And I naturally gravitated towards that plan. But this year, they’ve been very focused on investing in real estate. And of course, I followed that too.
So if you have no idea what whether to go for the real estate, fixed income, or stock plans, you can use their portfolio as a guide on what you can invest in and how much.
How I invested the $400
Before I go into how I invested the $400, let me give you some background.
I didn’t have a strategy in mind before funding my RiseVest wallet.
All I wanted to do was to lock away my money in dollars. I didn’t want to subject my money to the increasing inflation rate and the maddening devaluation of the naira. That was my only reason.
The PiggyVest dollar rate was unreasonable.
I don’t blame them, but I found N506 to $1 insane. And if I wanted to withdraw the dollar, the selling rate is N495 to $1. That’s a difference of N11. The interest rate on the Flex Dollar feature is 7%.
RiseVest’s buy rate was N499 to $1 while the sell rate was N490 to $1. That’s a difference of N9. And the interest rate on the RiseVest plans is 10-15%.
At that point, it was a no-brainer to choose RiseVest.
With that out of the way, this how I invested the $400:
Created a new real estate plan.
I already had a real estate plan but I wanted to create a brand new one and specifically observe its growth. And as is my custom, I gave the plan an empowering and abundant name. I feel that doing that helps you set a positive intention with your money. Sounds crazy but I find it fun.
Chose the 12 month plan.
I wanted to take full advantage of the 15% return. Although 12 months is a long time, I felt that it was the best. I didn’t want to be tempted to touch the money.
Made a commitment to deposit $10 every month to grow my real estate investment.
$10 was the minimum I knew I could commit to.
Deposited $100
Invested $24 in my old real estate plan.
Left the balance in my RiseVest wallet to think through my next investment strategy (which will be to invest in more real estate).
I admit, my method doesn’t make much sense but I wanted to be transparent.
Just like a lot of people it takes a lot of courage to make some major investments. Sometimes I just have to feel secure and proud of myself for depositing money, and then cheer myself on to take the next step.
Whatever be the case, just start investing no matter how little. Even if it doesn’t make sense, it will after a while.
I’m not saying that this is the best way to invest. But if you’re like me then I hope this encouraged you to take that first step.
How Would You Have Invested $400?
I wanted to end this newsletter with a question. I’m curious to know how you would have invested $400.
Like I said earlier, I’m not an expert. But I do hope that today’s newsletter inspires you to just make an investment.
I didn’t have a strategy behind my investment. All I knew is that I didn’t want to be tempted to spend the money and at the same time get really good returns.
And if you’ve not started invest in dollars, I hope RiseVest sparked your interest. If it did, here’s my referral code to get started: TGP1QG5O.
Keep shining,
Mary Victoria 💋
P.S.
It'll mean a lot if you could share your thoughts in the comments.
And if you found this newsletter helpful or insightful, please share with with friend.
And if somehow you found your way to this place without subscribing, don’t leave without dropping your email and hitting the ‘Subscribe’ button.