2020 has been a curve ball for the entire world and the consequences of the pandemic will have long-lasting effects on many aspects of life. We all have to make adjustments and do our best to roll with the punches this situation has thrown at us. World banks have had to take unprecedented actions to support the world economy through dropping interest rates to historic lows. Low interest rates help encourage investment however the picture is not all roses.
When a central bank drops rates to zero, your local bank won’t be able to pay you much of anything for the savings you hold with them. So, your savings will sit in a bank and slowly lose purchasing power through inflation. Central banks know this and are counting on those low yields to encourage you to seek higher returns by investing in something, anything really. They just don’t want you sitting on a pile of cash without putting it to work in the economy. Not all of us have the time or the desire to start a business with our savings. Most of us just want our money to earn a decent return with us having to spend much time fussing over it. One raising star in the Fintech world that is an attractive alternative to traditional finance is www.Mi-Ahorro.com.
Mi Ahorro is Spanish for “My Savings” is built to be a replacement to the antiquated savings account model most banks currently offer. The first thing that stands out about Mi Ahorro is their monthly return objective of 3.25%, which is the norm for most savings accounts for an entire year. That kind of return on investment is not what you will find in your standard savings account. With an account denominated in USD 3.25% monthly compounds out to around 40% year over year returns. So, it is safe to say thins is in no way or shape a typical savings account.
So how does this work? Mi Ahorro has a partnership with a well-known forex broker IC Markets, one of the biggest retail forex brokers in the world. Mi Ahorro clients onboard to IC Markets and then receive the technology Mi Ahorro provides in the form of trades in the forex market. So, IC Markets actually is the institution that is the custodian of your capital, not Mi Ahorro, which is probably a good thing since Mi Ahorro is a small tech company and IC Markets is an international broker with a good reputation.
Onboard to IC Markets as a client of the broker isn’t very difficult. They just ask for proof of ID and address and your account is approved. Once your account is funded (credit card or wire is fine) you sign an agreement to receive the orders Mi Ahorro places. There is no work on your part and an investor but that does not mean it is without risks. The success of your investment will depend on how well the Mi Ahorro technology performs. Looking at their verified track record, it does appear they have had good account performance. The monthly return and relatively low drawdown are world class. Past results do not guarantee future profits, but in fairness it is a good indication.
Mi Ahorro claims only 15% of your capital is being actively traded, which basically means when you sign up for their service it is possible to lose 15% of your trading capital from one incident. This doesn’t mean you will never lose more than 15%, but it does reduce the risk and gives you some peace of mind as a client. Mi Ahorro is does not guarantee a monthly ROI of 3.25%, however it seems based on their Historical Track Record that this is a realistic objective.
Some other points worth noting; Mi Ahorro does not charge to join the service. You can leave when you want and there is no exit fee, so come and go as you please. There is no management free but there is a 35% performance fee which is built into their objective of 3.25% monthly return figure. So really, they mean to make 5% and they take their 35% cut of the profit they generate and you get the 3.25%. Mi Ahorro’s performance-based model gives clients a 65%/35% split of the monthly profits. The performance fee is taken out by the broker automatically and only assessed if you make a profit. No profit, no charge which is a fair structure for compensation.
In conclusion, Mi Ahorro is on the cutting edge of Fintech and has a structure that is safe for investors looking for alternatives. Profits are not guaranteed by Mi Ahorro, however it does seem like an attractive option and should gain market share over the coming years.