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First option trade: Herbalife

After I spent about 1 month opening a trading account in Norvik bank, on October 25th I finally bought my first options. I chose Herbalife PUT options with the longest term and with the lowest strike price that were available: $35 strike price, expire date: 2019-01-18

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How to open a trading account in Norvik bank?

If you read my last post „How to buy options in Latvia?” then you know I planned to open a trading account in Norvik bank. In this post I will describe the process in more detail.

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How to buy options in Latvia?

It is not easy to trade options in Latvia, so I will describe the process how to get started and what to expect in terms of costs.

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Latvia’s ghost town Skrunda-1

Since Feb 2016 it is possible to legally walk around Skrunda-1 ghost town in exchange for 4 EUR entrance fee. It is a 2h drive from Riga, so I recommend to start early.

We climbed roofs and explored the abandoned buildings for 3h, but managed to see maybe 50%, so you can easily spend the whole day there. Take good shoes and be careful – I ripped my jacket on a nail, and there are broken glasses everywhere. Some photos below:

Photo 27.03.16 15 19 52

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How to invest in stocks and outperform fund managers?

If we look at things very simply, there are 3 main options, how to invest in stock market:

1. Select stocks yourself

You can create a stock portfolio of companies that you believe in and hope that these companies will grow and make you rich. But to get good results over the long-term, you will also need to spend lot of time learning about stock market. If you don’t have time and will pick stocks without doing any research, you risk getting burned.

For example – this is how GoPro stock chart looked like after IPO – price shot up 300% from $30 to $90 in just 3 months. Imagine, how high it could go in 2 years? Let’s say, you would have invested $990 and bought 11 GoPro shares in Oct 2014, paying $90 for each share.

gopro_hype

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Mintos vs Twino – investing results after 2 months

Couple of months ago I wrote about peer to peer lending platforms in Latvia. After that I also decided to invest some money in them and came up with following strategy:

  1. No manual selection of specific loans, use Auto Invest feature to make investments automatically and avoid spending my time.
  2. Invest only in loans that have Buy Back guarantee.
  3. Even if Mintos and Twino have different returns for similar type of loans, invest in both of them to diversify and in worst case scenario loose only 50% of money in case one of these P2P platforms go bankrupt.
  4. Invest only in loans with the shortest term – 1 month – to get the best liquidity. So if I want to get back all my investment, it should take maximum 1 month for any remaining loans to be repaid, or in case – if some of them are paid late, then maximum another 1-2 months for the Buy back guarantee to pay back the late loans.

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10 things to do in Lanzarote, Canary Islands

Last week I went on a short vacation to Lanzarote, Canary Islands. The island is quite small, but for 1-2 weeks it has plenty of activities to do, so here I will share some ideas that I enjoyed in case anyone else wants to go to Lanzarote as well.

Fligts, maps, car rental, hotels

Cheap flights: highly recommend to check out airixo.com – easy & fast to find dates and places that you might be interested in. We got our flights for only 125EUR/person in both directions.

Maps: download offline areas for Google Maps & also download Maps.me app – for many places it has more detailed info about dirt roads and smaller paths.

Car Rental: avoid big brand companies – they have very bad reviews, instead try out a local company called AutoReisen – very good service, prices & reviews. And that was our experience as well – 100EUR for car rental for 7 days, no security deposits, insurance included, no issues with the car.

Hotels: you can check out airbnb.com or if you find something interesting in booking.com – try to book the same place directly, that will be 10% cheaper. We changed places almost every day, but the island is quite small and if you have a car, you can easily stay in the same place all the time.

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Peer to Peer lending in Latvia: Mintos vs Twino

Problem: bank deposit rates is a joke

Let’s say that you have 1000 EUR in your account and would like to invest it. Guess how much you would earn from fixed term deposit? 0.1% per year. So by “freezing” your 1000 EUR for 1 year you would earn 1 EUR.

Screenshot 2015-11-29 19.52.54

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Enduro off-road fun with a small crash

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8 GIFs That Illustrate Investing

Time deposits

You make a money deposit to your bank with condition that the money cannot be withdrawn for a certain period of time. Depending on the chosen term, bank will offer you different interest rates. For example – you deposit $1000 for 1 year, and get 1% interest. After the year has passed, you will have earned 1% of $1000 or $10.

$10 return is not much, but that is what you get for a very safe investment – you know exactly how much you will get back before investing and unless your bank or government fails, your money should be safe. But before you do any time deposits, consider also the drawbacks:

1. Your money is frozen for the selected period of time and you cannot use it. In case you decide to withdraw it sooner, you will need to pay a penalty that will most likely be higher than the interest rate.

2. In most stable countries inflation is higher than interest rates from time deposits, so if the interest rate is 1% and inflation is 2%, then after 1 year you will have gained $10 from investment and lost $20 to inflation. In short – you freeze your money, let bank make profit from it and get back less that you had.

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