Viktorija Orkinė, a professional investor and head of the investment management company EIKA Asset Management, says that for her the most important investment goal is to secure freedom and not be dependent on others. And although, to be honest, she could already afford not to work, she still chooses not to do so – having discovered her field, work is simply too interesting for her. V. Orkinė assures those who dream of living only from investing – this is really realistic. It would be a mistake to imagine that then you will not have to do anything – investing is also a job that requires effort and knowledge.
Investing is also work
V. Orkinė, who participated in the podcast “Finansų rentgenas” of the crowdfunding platform “Röntgen”, opened up – money primarily ensures freedom for her: she can choose a restaurant that she likes, not one that she can afford, she can travel, she can decide for herself who and what she wants to work with.
“My approach to work is that, of course, I strive to earn money, but it is also important for me to realize myself. It has never seemed to me that work should be suffering – it should be something that interests you, something that you enjoy, and when you know that you can earn money by doing it, of course, it motivates you even more. Therefore, I am not one of those people who would set very specific personal investment goals for myself, that I will earn, for example, a million or two, and then I will have enough. No – I work, I try to earn money, and my most important goal is to invest so that even after I retire, I can live peacefully, without asking for anything and without depending on anyone,” she said.
Although V. Orkinė herself is not even considering withdrawing from the labor market yet, she does not hide that she has met many investors who made such a decision because they felt they had earned enough. However, after a year or two, they returned with new ideas. Nothing surprising, because people who are used to growing businesses or otherwise employing their talents, when they get enough rest and time for themselves, eventually get bored again and their ambitions awaken.
“But for those who dream about it – yes, making a living from investing is realistic. But it’s not like investing means no work at all. You can trust someone with your money and do nothing at all, but you’ll still have to dig deeper into what’s being done with it. Or you’ll have to trust them so much that you don’t even ask any questions – but I haven’t met anyone who doesn’t ask questions among those people who make money. So you’ll have to communicate, fill out documents, choose where to invest – all of this takes time, so it’s not like you’ll do nothing,” she said.
The grass isn’t always greener on the other side.
Orkinė and her family’s investment portfolio is very diverse, including stocks, investment fund units, physical real estate, jewelry, works of art, etc. “Diversification, that is, not putting all your eggs in one basket, is the first rule of investors,” she laughed.
The fact that she has also purchased shares in the funds she manages seems natural to her – after all, she believes in them, and other investors have a completely different view when they know that she is also risking her own money.
And giving in to the opinions of others and making hasty decisions is not for her, because she wants to fully examine the arguments first. So although, she did not hide it, she was tempted by the idea of buying real estate in Spain, as many people are now tempted to do, after considering everything, she refused it.
“It’s not as easy to go to another market and the grass is not greener everywhere as it might seem at first. Yes, at the beginning of the war I really went to Spain and was determined to buy an apartment there. I looked at a lot of them, looked into various options, studied taxes, other nuances and then I realized that there are a lot of risks there. When you start thinking realistically, whether I want to fly there, whether I want to be there permanently, whether I will rent it, and if so – how I will do it, who will look after it, how much it will cost, then you realize that there is no return at all there,” she said.
Orkinė emphasized that with real estate investments, it is not enough to just pay the money and wait for a return without making any effort: “That’s not the case, you can ask those who simply rent apartments and understand how much work there is: something broke, the tenant moved out, something else happened – there is definitely that administration and management. This is another reason why you feel safer when investing in the housing market: here you know the laws, you know what can go wrong, you have a plan B, what you will do if something happens – you are simply nearby, closer, you have information.”
However, she says, if buying real estate abroad will make you feel calmer, go ahead. “Buy it, if that’s how you buy psychological security – that’s fine: some investments are not for the sake of returns, but because we want to feel calmer or pay for things that make us happy. But do we need to sell everything here one hundred percent and move it somewhere else now? I think not. Some investments abroad are very good, it’s diversification again, but you need to think carefully about how much to move, maybe 20 percent is enough? If something really bad happens, maybe that will be enough? But if you move everything out of here, we will ruin our own country, we won’t even need anyone to come,” she noted.
How to choose where to invest?
Orkinė emphasized that those who want to make a living from investing need to be curious, interested, follow the news, communicate, and ask questions. If you don’t know anything about a certain area at all, it might be better to not bother, or invest time and effort in finding a reliable consultant, but, of course, calculate that you will also have to pay him.
When choosing between different investment instruments, you need to evaluate various arguments – you have to honestly answer yourself how much risk you tolerate, and consider how long you can lock up your money. V. Orkinė laughed that even her and her husband’s opinions sometimes differ – she would rather use bank loans and invest her money elsewhere, while he would rather choose not to borrow at all and invest only what he has already accumulated. However, after both of them listen to each other’s arguments, a compromise is found.
“For example, I have invested in the EIKA Real Estate Fund, a commercial fund where money is locked up for five years – this is my long-term investment. But there are all kinds of situations in life, sometimes you have free money, you don’t want it to depreciate, but you know that in a year or two you will need it for some purpose. Then you can choose other products, such as loans through crowdfunding platforms. So when choosing, I assess whether the time is right for me, the interest rate, what are the loan security measures, whether they seem rational and safe to me – if all the answers satisfy me, in the short term it is a good investment. I don’t see much difference between a loan with collateral through a platform and bonds.”
Orkinė explained that investments in funds can be expected to earn more than fixed-income products, whether bonds or crowdfunding platforms.
“Again, the return we will receive from investments in funds cannot be predicted with absolute accuracy – you need to understand that the forecast provided is essentially a question of assessment methodology. Therefore, you need to analyze and think about how much you believe in those investments. For example, when making decisions, we are very conservative, we always assess various risks, we think about how we would solve them. In fact, sometimes we really accumulate quite a lot of those reserves, sometimes they even make it difficult for you to buy something, but we are guided by the approach that we only want measured risk. So investments in funds are more conservative, they require a longer distance, but I also expect higher returns there. And on crowdfunding platforms, everything is very clear, it is fixed when and how much money you will receive, and the term there is shorter. It seems to me that you need to have both,” the expert compared the types of investments.
And if you want to, for example, invest in real estate yourself, don’t forget to research the market situation and the seller’s reputation.
“If we’re talking about residential housing, first of all you need to look at what the project is, where it is located, what its selling price is, and whether you believe in it yourself. Because if you saw in the project, for example, apartments in Naujininkai, where the selling price per square meter would be 10 thousand euros, it would sound like nonsense, and if the price of an apartment in the Old Town was about 5-5.5 thousand euros per square meter, you would assess it as a normal price, and you should buy it for that much. Then you look at what the market is like in general, whether people are currently buying apartments or not, what the construction prices are. As an investor, you also have to look at what the security measures are, whether there are any guarantees from the person you’re entrusting your money to or not, what their reliability is, their reputation – these are things that need to be checked. To be honest, I don’t understand such investments if there are bad experiences and someone continues to invest,” she said.
The most important thing is not to know, but to be able to find answers
Orkinė admitted that she feels greater responsibility when managing the capital of other people, including professional investors, than when risking her own money.
“You can make mistakes yourself, not so much there. But I’m not afraid that those people are professionals – it’s even more interesting. You don’t always know the answers, but you search, find them, and then you can give them to others – that’s how I improve and grow. Of course, anything can happen, but, as they say, if you’re afraid of the wolf, don’t go into the forest. The most important thing is that you have to give yourself to the maximum – you can’t be negligent. When you know what you’re doing, believe in it, put in the energy and effort – in the end, everything gets done. Maybe not as quickly as you want, but still, sooner or later, the result will come,” she is convinced.
You can listen to the entire podcast: https://youtu.be/f1dcvE9g0JY?si=8JjX_-hdkRmZyKQH