What investment is making you 10%+ yearly?

[OCT2023]

There has to be some risk attached to a CD with a 10% yield, I don't know any country, at least not in the western world, that will give you that much for a USD CD.

Other than the USD or Ecuador or the Banks collapsing, its very safe and I've been happy. It used to be much more volatile before Ecuador took on the USD. The next big opportunity will be when Argentina adopts the USD (which is being planned). My favorite part is that 1-year Bank CDs in Ecuador are Tax Free

 

[Radko]

Other than the USD or Ecuador or the Banks collapsing, its very safe and I've been happy. It used to be much more volatile before Ecuador took on the USD. The next big opportunity will be when Argentina adopts the USD (which is being planned). My favorite part is that 1-year Bank CDs in Ecuador are Tax Free

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Thanks, I would keep an eye on the bank that gives you that 10% on a CD, just in case. But other than that great, and tax free!
I wonder what's the amount of money that is guaranteed by the government if that bank were to collapse?

 

[OCT2023]

Easy, they charge between 16% and 23% per loan, credit cards charge 16% flat. They don't have floating rates.

However, I don't think the party will last much. 3 years ago, the best rate you could get was 7% (yeah, still pretty good)

Don't forget, everything is negotiable in Ecuador

Thanks, I would keep an eye on the bank that gives you that 10% on a CD, just in case. But other than that great, and tax free!
I wonder what's the amount of money that is guaranteed by the government if that bank were to collapse?

Ecuador guarantees up to 64k (32k bank, 32k cooperativa) ... LOL ... but the banks I use are the best in the country and will be the last to fail. I sacrifice a tiny bit of interest for more peace of mind.

 

[Clank]

Don't forget, everything is negotiable in Ecuador

Ecuador guarantees up to 64k (32k bank, 32k cooperativa) ... LOL ... but the banks I use are the best in the country and will be the last to fail. I sacrifice a tiny bit of interest for more peace of mind.

Which banks do you use? Do they take non-residents?

 

[Kirito]

Thanks, I would keep an eye on the bank that gives you that 10% on a CD, just in case. But other than that great, and tax free!

The bank will take gain taxes, so it's not "tax free", but they only take 2% of the gains

 

[OCT2023]

The bank will take gain taxes, so it's not "tax free", but they only take 2% of the gains

They only do that for CDs under 6 months, not over 6 months

 

[eklia]

Guys what do you recommend do buy being resident in Europe? Here it's not easy to trade in the USA stock exchange
For example on IBK I can't buy stock on USA stock exchange...

Currently I'm just holding some ETFs like MSCI World, SP500 and similars.

How would you set your portfolio for live only through money from stocks/bonds being resident in EU?
The bonds that I found they give you only 3-4% and you have anyway to differentiate your investments so it's better to buy ETFs instead of single stock/bonds.

 

[pomegranate]

Other than the USD or Ecuador or the Banks collapsing, its very safe and I've been happy.

With 1y US Treasury at ~5%, just be aware that the 5% premium you get means a lot of risk (country + bank). Each to their own but this is anything but a risk-free investment.

(for context: Ecuador has defaulted 10 times in modern history)

 

[Radko]

With 1y US Treasury at ~5%, just be aware that the 5% premium you get means a lot of risk (country + bank). Each to their own but this is anything but a risk-free investment.

(for context: Ecuador has defaulted 10 times in modern history)

I wouldn't sleep well at night having my savings in Ecuador.
10 times it has defaulted, Oops!

Guys what do you recommend do buy being resident in Europe? Here it's not easy to trade in the USA stock exchange
For example on IBK I can't buy stock on USA stock exchange...

Currently I'm just holding some ETFs like MSCI World, SP500 and similars.

How would you set your portfolio for live only through money from stocks/bonds being resident in EU?
The bonds that I found they give you only 3-4% and you have anyway to differentiate your investments so it's better to buy ETFs instead of single stock/bonds.

With IBKR you can ask them to remove the restrictions on U.S. ETFs if you fullfil the requirements, it's not difficult. Or open an account in a U.S. broker using an LLC, that will get rid of the restrictions.
Personally I would leave Europe, and forget about the restrictions and the taxes.

To generate enough passive income to live off of, just create a portfolio of Covered call ETF, many retirees are doing that.

 

[eklia]

I wouldn't sleep well at night having my savings in Ecuador.
10 times it has defaulted, Oops!



With IBKR you can ask them to remove the restrictions on U.S. ETFs if you fullfil the requirements, it's not difficult. Or open an account in a U.S. broker using an LLC, that will get rid of the restrictions.
Personally I would leave Europe, and forget about the restrictions and the taxes.

To generate enough passive income to live off of, just create a portfolio of Covered call ETF, many retirees are doing that.

They don't want to allow me to trade in the USA stock exchange. Do you know which are the requirements?

Could you explain what is covered call ETF? In Europe we don't have that and I'm not so skilled

You're right I should leave EU...

 

[Liam13]

This has happened to all of us. In 2012, I bought 45 BTC at $180 each. And I sold them a year later for $1,000 to buy a Porsche Cayman when I turned 18 and got my driver's license.

I mean, the Porsche Cayman cost me a whopping 2.5M if I think about it.

Now I have a Jewish mentality and I don't sell anything at all. My girlfriend tells me that I have a kind of financial Diogenes syndrome, of accumulating some shares that are literally s**t but that I am embarrassed to sell.

Another book that I really recommend reading is "Misbehaving: The Making of Behavioral Economics" by Richard Thaler. More focused on the sociological aspect of economics. Well, I recommend reading any of his books, they are simply brilliant.

Can you recommend any books outside of the usual must-read ones? You have a lot of experience, you could even open a thread in the Gold group recommending your essential books outside of the typical lists that everyone can find on the internet.

I sold AAVE at 5 usd...I had 1000 coins, so I hear you

 

[JohnLocke]

If you don't know how to trade derivatives, then just buy a few Covered call ETFs that are yielding +10%, just create a portfolio of these ETFs, it's an easy way of getting constantly passive income.

What platform are you using for your investments for this type of ETF's ?

 

[JohnnyDoe]

What platform are you using for your investments for this type of ETF's ?

You can easily find them on IBKR. We are talking of JEPI, SVOL etc

 

[cryptofriendly]

My selling options on BTC strategy is making me 9% a month for the past 2 months.

That's an APY >100%, so it should double in 12 months, equivalent to BTC reaching 120K.

 

[Radko]

What platform are you using for your investments for this type of ETF's ?

You can use any Broker, Charles Schwab or Interaction Broker.

I'm using Charles Schwab.

They don't want to allow me to trade in the USA stock exchange. Do you know which are the requirements?

Could you explain what is covered call ETF? In Europe we don't have that and I'm not so skilled

You're right I should leave EU...

Do a search on the requirements to have a Pro account with IBKR (you have to check 2 of the 3 requirements), it's not difficult. Once you have a Pro account you can trade U.S. ETFs from Europe.
Or you can form an LLC in the U.S. and with that you open an account with a U.S. Broker, and that's it.

When it comes to Covered call ETFs is better that you learn from a proper YouTube channel. But in a few words, covered call ETFs sell options on a portion of the fund, and collect a premium.
But it's better to check all the videos in the following YouTube channel, and you'll be an expert:
"Passive Income Investing."

*When you invest in the U.S. if you generate dividends, you'll be subject to a withholding rate. Most countries have a double tax treaty with the U.S. and with that the withholding rate goes down from 30% to 15%. Some countries have it lower than 15%, like Mexico with a 10% withholding rate.

At some point I would relocate to a friendlier country where you can keep all the money that you make on your U.S investments, Europe is a tax inferno.

 

[jafo]

This thread is a blessing!
A lot of things I thought I knew, but when actually doing the "dive," I landed a few times on my belly
Came back, reread, and realized what I missed
Thank you all for sharing such valuable hands-on knowledge!

 

[pomegranate]

As said previously, a covered call is selling options on the underlying while holding it (the underlying can be anything: equity, fixed income, commodities, etc.).
By doing so, you sell the volatility implied in the price of the option and hope that the realised volatility will not be higher. Most of the time this is true: implied vol > realised vol. This is why "selling volatility" is a popular trading strategy.

However, when you have very sharp price movements, it will be painful.

Technically when you sell an option (naked = without holding the underlying), your losses are unlimited (a quant would even add that markets being nonergodic, selling can only lead to misery)

Currently, for most markets, the volatilility is very low, meaning you sell low implied vol vs (even lower) realised vol.
If you think the macro conditions (excess liquidity, low vol due to concentration on few(er) assets, etc...) that explain why vol is so low will continue, you should continue selling options (or buy your Covered call ETF that does exactly the same thing for retail investors).
If not (i.e. you assume realised vol will at some point increase or mean-revert, you believe there might be some hidden cracks in the financial system...), this strategy is not for you.

In a covered call strategy you also own the underlying. so this limits the downside risk.

Whatever your own risk tolerance, market outlook and investment goals, just make sure you understand the basic idea that there is an asymmetrical risk profile between selling and buying options.

 

[aidenaiden]

I wouldn't sleep well at night having my savings in Ecuador.
10 times it has defaulted, Oops!



With IBKR you can ask them to remove the restrictions on U.S. ETFs if you fullfil the requirements, it's not difficult. Or open an account in a U.S. broker using an LLC, that will get rid of the restrictions.
Personally I would leave Europe, and forget about the restrictions and the taxes.

To generate enough passive income to live off of, just create a portfolio of Covered call ETF, many retirees are doing that.

can you expand more on the covered call etfs? Would love to learn more..

 

[FreedomSearcher]

Made over +50% in last 12 months with s&p500 etf's and some tech stocks (Nvidia one of them).

 

[Radko]

can you expand more on the covered call etfs? Would love to learn more..

It's a long subject, there are some great YouTube channels that will explain everything in detail, such as "Passive Income Investing."