Financial Freedom Sloth

achieving financial freedom one lazy step at a time

Adventures in day trading

I already talked about how I ended up at Lynx here. Lynx offered a multitude of new possibilities for me and in my first post about how I was going to use these I also mentioned day trading.

I had this to say about it:

With the SAB MILLER position active and me not needing to work at the time I grew bored. So I tried my hand at day trading. Technically it was day trading because I was buying and selling on the same day. But actually I had identified some stock that was cheap and I wanted to buy some. I just didn’t feel too comfortable with already having a 200.000 GBP leveraged position so as soon as I made some profit I closed the position (and thus the extra leverage). I practiced a bit with Berkshire Hathaway and Coca cola. And then when Google went down to 730 USD I really had some fun with it. Real day trading is off course have dozens or even hundreds of trades and playing both an uptrend and downtrend in stock price. I just bought stock I thought was cheap and then sold with a small profit. Sometimes I only did 1 or 2 of these trades, and some days 6 or 8. I found it to be way to much work and also too much stress but I did make around 2.500 USD in profits from it (another 1% added to the stash). But it would have been much more profitable to just buy Google at 730 USD, keep it for a few months and then sell it around 780 USD. I just wasn’t very comfortable with that amount of leverage at that time.

I stopped day trading when I started working again but then my temporary contract ended at the end of January. Since I once again had a leveraged construction at 2x leverage in my portfolio I decided to start day trading again.

Let’s do it again

My approach remained the same. So I chose google again to trade in.

The reasons for this is that I believe in the long term prospects of google (by which I mean the stock price should go up over time) and it usually has enough volatility during the day to make a small profit of at least a 100 USD of it with a trade.

I usually buy 100 CfD’s on Google. This costs me 5 USD in fees as that is the minimum fee Lynx charges. Selling will cost me another 5 USD so Google needs to go up 0,10 USD for me to break even. I usually try to make 100 USD on a trade. So google needs to move 1,10 USD for this to happen. This is about 0.0011%. So changes of this happening are pretty good.

Pretty good doesn’t mean guaranteed. Last Thursday would have been a bad day to try to day trade in google.

One of my own rules is that really bad days I stay away. Yes, even Thursday there would have been 2 or three points (red arrows) where a quick in and out hopping could have made some money but chances of picking the exact right time are too low to risk it.

I also do not trade when the stock is at an all-time high price (though I broke that rule to buy just below 1000 USD and then sell just above 1000 USD just so I could say I traded Google went it went over the 1000 USD share price. I now, stupid. Especially because nobody but me cares about something like that…). I also do not trade when the stock is at a high for that day.

What do I trade? Little drops in the stock.

15 August would have been a good day to trade.

There are 4 moments where I might have traded. We had a friend over so I didn’t go and sit behind the PC but I did want to show off a little bit so late in the afternoon I did log in. I was just in time for the last moment and opened a position. The upward movement wasn’t as strong as I thought it would be (should have sold at the first black arrow) so I left some money on the table but in the end was able to close the position with a net profit of 50 USD (sold somewhere around the second black arrow).

The trick is off course to identify that the dip is in fact a dip and not the beginning of a big downward movement. Either I have been lucky so far or I kinda have a ‘feel’ for it. But I have also closed positions at no profit or only 5 or 8 USD profit because the upward movement I thought would happen just didn’t materialize. I have had Google do nothing but go down after I open a position. Lucky for me this happened at prize points where I didn’t mind holding Google. So my day trade position then became a multi-day or in two occasions even multi-week position until Google rebound so I could exit the position at a profit. It is why I do not day trade when Google is at (or near) an all-time high (with the one exception, I knew it would cross the 1000 USD mark). Let’s just say I am pretty happy with the last drop in Google price. It is now at a level I feel comfortable trading it again.

As you just read there is nothing sophisticated or glamorous about it. But it is some extra money on a regular basis. Last year I made around 2.500 USD (in a couple of months) and this year I am around 3.250 USD (the price of the Vespa!). It is a little bit extra I now do in an effort to get the home renovations done quicker. My estimate is that the remaining home renovation will take around 50.000 euro. The girlfriend and me can save around 10.000 euro a year so these should take 5 years to  complete. If I make an additional 10.000 euro by day trading in the next 4 years well that is one year quicker that our house is finished. Since I do not want to retire before the renovations are done this could shave off a full year of me working!

I can feel my mind slipping

Before I started day trading I had read it is mostly a mental game and I can confirm it is.

First and all, you need to be able to stare at the price of a stock for hours. It literally is looking at a screen. So you have to be able to do that (luckily I have had lots of training at my previous jobs for this). And then you have to fight the urge to open a position. Believe me, this is hard! That is why you are sitting there after all! And the longer you sit there, the more you want to enter a trade.

Then when you do enter a trade there are nerves. Because your timing is never perfect. Meaning you buy in a dip, but the dip continues … And every 0.1 USD drop is costing you 10 USD. You are sitting there thinking: I should have waited a bit longer! I am leaving money on the table!!

Then the stock goes up. Oef, yes, it was a dip, yes I am going to make money here!

Then it goes down a bit again. We are talking cents here, cents on a 925 USD stock. So off course it is moving up and down. I always does that but what you need to determine here is: is the dip over and will it go higher or is the dip not over yet? Is this a little upward bounce before going down a lot more? How strong is the upward movement?

In all honesty, sometimes I exit the trade just in time before it drops another dollar. In those cases I feel pretty smart. But sometimes I get out with 5 or 10 USD profit thinking the stock will go down again but then it starts a strong upward movement, going up 2 or 3 dollar. Which means I just missed 300 USD profits. I feel pretty stupid then.

You need to leave your emotions at home. But you also need to be able to not give a fuck about the fact you missed profit. That is hard, because you are there, sitting behind the computer to make a 100 or 200 USD. You are thinking 10 cents movement = 10 USD. And since your timing is never going to be perfect you will always miss profits. So even if you know you missed some profit. Even if some part of your brain is screaming: nice going dimwit, you just missed 80 USD another part of your brain must scream back and say fuck it, I made some profit and I will continu to make profits, shut up other part of the brain! And that second part of your brain needs to win the shouting match! So you can continue trading and open a new position. And then the entire circus starts again. As you can read, it goes from utterly boring to utterly nerve wrecking.

Why do I do it then?

well, I seem to be decent at it. Within the rules I made for myself I am capable of making a little bit of profit. I don’t find it a pleasant activity to do but the 3.250 USD of profit so far equals 1,5 months of working in Brussels. Honestly, I prefer the day trading over the going to work. It takes less effort, and I don’t need to go to Brussels for it.

It also helps that it is a little extra on the side. I do not do it a lot. As a day job  I think it would be very exhausting. A little bit left and right is very doable. Sometimes I plan on doing some trading one evening and then when the time comes I don’t feel like it, so I don’t. Or the stock doesn’t move right so I stop after an hour. When I was unemployed I put in longer sessions. But even then, sometimes I made a nice profit in the first two hours so I just stopped for the rest of the day (or even week) and was off to do something a lot more fun than staring at a screen for hours.

So for the time being I am going to continue doing it. Hopefully get another 10.000 USD in profits from it over time so I can finish renovating the house one year earlier …



Let the beat control your body

If there is one area where the effects of digitization have been felt the most it is music. And for the most this has been a positive. New things have become possible and almost all music is now available everywhere at a zero to low cost. Especially for the more frugal inclined this has been a big change.

When I was younger portable music meant a Walkman with cassettes (later followed by the discman and cd’s). Getting a new album meant going to a shop and actually buying it. It took time, effort and money. The equivalent now would be to buy it online. The hour it took to go back and forth to the shop is now 2 minutes online and the cost has gone down. But does anybody still buy albums? The internet has given us so many new possibilities that music habits are fundamentally changing and can differ immensely from one person to another one.

Owning it

Sure, there is the ‘old school’ approach where you still own the music you listen to. Owning it now means it is some file on your computer and ‘carrying it with you’ is putting that file on your phone (although I still have a few friends who use a dedicated mp3 player). A hybrid approach is where you upload the songs you already own. Some use dropbox (or another cloud storage service for it) for this, but Google music lets you upload up to 5.000 of your own songs for free (without the need to use their paying streaming service). This can be handy for those who do not have enough memory on their phone (but be careful about data consumption in this case). Some go as far as running their own little network connected storage so they have control over it. Personally I am running Plex on a Synology NAS. But I have been thinking about tinkering with a raspberry Pi and turning one into an internet connected music server for the girlfriend. This is especially handy for people who have A LOT of music but for whom a NAS might be overkill.

Streaming it

This is still you owning the music. Owning music almost feels like an outdated concept nowadays. There are a ton of streaming services now who give you access to millions of songs for a monthly fee. For us frugal types there is the free version of Spotify. Youtube also contains millions of songs but that is not a very handy platform if you still look at music from an song – album point of view.

For me, Youtube is a lot better if you are interested in DJ sets and performances at festivals. Forget listening to a song or an album. Thanks to the internet you can now listen (and watch in the case of Youtube) your favorite artist perform at a concert/festival on the other side of the planet!

For this Soundcloud and mixcloud are veritable treasure troves where the discovery of one great DJ leads to discovering other DJ’s, which in turn leads to a gazillion hours of music to listen to.

Youtube, Soundcloud and Mixcloud are completely free at the moment. Even if there was a magical piece of software that is able to select only the music you love on these platforms, you probably would need several lifetimes to listen to it all.

The way the sloth

If a passive approach is more your style the internet has you covered to. Most radiostations can now be accessed via the internet. Personally I prefer TuneIn as they also provide a wide selection of ‘web-only’ radiostations. Put in a few hours searching for radio stations that cater to your own personal taste and voila, free music for the rest of your life with zero effort at zero cost. Sloths all over the world: rejoice!

Staying connected

For people who are mobile all the day or do not have access to free WIFi at work, the scarlett Hi5 abo gives you 5 gb for a 15 euro monthly subscription and Mobile Vikings now offers the possibility to make your own subscription type where 15 euro will get you 4 gb of data and 50 min calling time. For those thinking of switching over to mobile vikings, send me a message and I’ll be able to earn a 15 euro referral fee 😉

Getting creative post FIRE

In the future VR technology will create additional new possibilities where it will be possible to ‘attend’ festivals at the other side of the planet from your own couch (free or for a low fee probably). But personally, once I am post FIRE, I am a lot more interested in a private version of the Tomorrowland Unite approach. Tommorrowland Unite is where they live stream performances from Boom Belgium to stages in different countries. Which means that if you have a projector, a screen and some decent speakers you can replicate this in the comfort of your own home/garden (you can of course select your own festival off choice as long as they have a decent live stream going. Or if they post sets on line after the festival you can do it a week later, thanks to internet time is starting to be a little bit flexible). The girlfriend already has her hart set on Awakenings – the home edition) …. Get some friends and some quality beers and you can have the ‘festival’-experience at a much lower price and with a hell of a lot more comfort (no dixie toilets!). The older you get, the more you appreciate the comforts of home and in case the title of this post didn’t give it away, I am a child of the nineties …

But some of us old geezers might have a few good tricks up our sleeves …

Back to work: a three month recap

I just got a phone call from the temp agency that placed me at my current job to ask how everything went. The classic ‘how is it going?’, ‘you like it?’ blablabla.

You could see it as a nice gesture or them checking that the temporary placement will lead to a fix contract which means a few more months of making a profit on me and then getting a bonus from my employer for finding such a good match without them having to do any additional work (but that might just be my cynical side).

I saw it as a sign to write this three month recap.

So the job. What can I say. Well, it’s work. And a steady paycheck that has done wonders for my cash position on my checking and savings account. I was down to 900 euro available cash when I started this job (another limit I tested).

I start to know enough so it isn’t as boring as the first month when I could only do the most simple tasks. But it’s still pretty boring work (long live podcasts!). Then again, I find most things pretty boring after a couple of months.

The co-workers are also pretty boring. Perhaps it is the job. I can imagine that doing this job for years and years on end could crush anybody’s spirit. It could be me. I like investing and options, reading weird stuff on line and classic trance (although dark wave horror synth and old school goa aren’t bad either) and I have got two pet pigs. It’s not easy to build a report with people if you have to lie about what you did on your three day weekend (Friday 21 st July was a holiday in Belgium). I mean, that Friday I did some day trading and sold a put on AB Inbev, earning about one month in wages in three hours. I am NOT going to say THAT to any of my co-workers! And I am not even going to start about Saturday … Basically, I am a weird dude. And my co-workers aren’t.

And the job is in Brussels. So that is a long commute. Leave home at 7:15, only back at 18:15 except when I go swimming. Those days I am only home at 20h. Which means that a lot of practical stuff needs to be crammed into the weekend. So you have to live a much more planned life. When can you do practical stuff A, B and C, When do you have time to see a friend or visit family? Do they have time in their schedule to see you … I don’t really care for having my life dictated by google calendar…

I should actually exercise more if I ever want a change of actually losing some weight (almost 5 months of swimming, 3 x 2 km a week and net result is I gained two kilo, hoping it’s muscles …). I should also put more time in meal planning AND preparing. Both things that would be a lot easier to do without the current job.

I don’t want this post to turn into a complain post. Truth is I am pretty happy with the job. The pay is decent and as far as the work goes, I have worked under much harsh conditions for many years in the past. The boss is pretty relaxed and does not micro-manage (I hate micromanagement). A decent job was also the final puzzle piece missing for my last five years leading to financial freedom. But even if I could transform this job in a ‘less than part time’ job 5 years from now, I would not want to keep doing this job.

Truth be told, I found live to be a whole lot more pleasant when I didn’t need to work or even when I did the temp job near Leuven (and that job and co-workers also were boring). The closer location saved me 2 hours in commute. Only one hour when I went with the bike, but I liked biking to work a lot. I found it to be pretty relaxing. I just had a lot more hours in the week where I had control over as where now my time from 7:15 till 18:15 is pretty much outside of my control.

So the plan is to stick with the current job, hoping the work from home option becomes available as soon as I have a fix contract. And that I can stretch it to 2 days a week. If working two days from home is not possible I’ll work full time for the first year of my fix contract and then ask for a 4/5th contract. This should give me an extra free day every week. If I go to Brussels via e-bike the remaining three days, my take home pay should stay the same as now. I can see me doing that arrangement for the remaining years I need to achieve financial freedom.

In the meantime I will start looking for a good job closer to home. This is going to take a lot of time. I will be looking for a job that is:

1)      Closer to home (30 min by Vespa of 1 hour by decent e-bike). Basically Leuven.

2)      about the same wage as my current wage

3)      in a field that actually interests me (finance, IT, entertainment)

4)      hopefully also a job I could transform into ‘less than part time’ once I have achieved financial freedom and I only need to earn the tax free sum of 7.400 euro.

I’ll settle for 1 + 2 + 3. But getting 4 would be nice.

Off course, this means that job hunting is one more practical thing I need to put in my google calendar …

Monthly expense report: July

I can’t believe another month has gone by. Been busy with fun and work. My to do list of things to read, watch, listen to, or just plain do (garden, house, car stuff) is getting longer by the week! Finance wise things are on track.

Personal account:

Income: 2 226,31 eur

Expenses: 1 490,40 eur

Savings: 735,91 euro or 33%

Once again below 1 500 euro, woohoo! Let’s hope I can keep it that way for the rest of the year. And it hasn’t been an uber frugal month either. Went to a festival and spend 40 euro there. Prepaid 15 euro for a ticket for another little festival and went to the Gentse feesten. So fun is definitely possible on this budget.

We even visited a restaurant for my mother’s birthday but that came out of the joint account. Let’s see how we did on that account.

The joint bank account:

Income: 2 631,13 euro

Expenses: 2 286,01 euro

Savings: 345,12 euro

A bit higher income here as I appear to have paid our road tax twice and we got a refund this month.

Adding half of that road tax return to my income, then adding half of the savings to my own savings and I get a savings rate of 35,6%!

All in all a good month. next month will be a bit more challenging as the home insurance of 850 euro landed on the 1st of august. And some more fun is planned as well. We’ll see how it turns out

Tax the middle class, always tax the middle class. Until …

Amber tree had an overview of the latest taxes our beloved government will put at the feet of the Belgian investors. Although this dedication of targeting the private investor is somewhat new, the broader trend of taxing the middle class is not.

Tax the middle class, always tax the middle class

It is pretty logical to tax the middle class. The rich are hard to tax because they can afford to spend money to find ways to avoid taxes (and if everything else fails they can always chose for the nuclear option and relocate to a more favorable country). The middleclass not so much. Spending 10.000 euro on a financial expert to avoid 100.000 euro in taxes is smart. Spending 10.000 euro to avoid a few 1000 euro’s in tax not so much. And the poor, well they are poor. Take away the little they have and you could face open revolt in the streets; And if there is one thing the government want to avoid at all cost it is a revolt (rulers tend to lose their head when Europeans revolt).

So the middle class it has been for the last decades! In those decades labor has been taxed so heavenly that an increase there would actually diminish total tax returns. Consumption too is taxed at its maximum: 21% on most products. Go higher and in a small country like Belgium everybody will start shopping in France or Germany. Since earning money and spending money are out, they are now looking at what is not earned or spend: savings and investments. Looking for ways to tax it and trying to determine the maximum they can tax in that category. I am afraid they have just begun with this exercise. Fortunately for us it will be an exercise in futility.

Until …

It has been my conviction for some years now that the increasing digitalization of our world is decreasing the taxable base for our government. A digital world is also a winner takes all world. As a government you either make damn sure your country hops on new innovations when they starts or you are left with nothing. A real life example to illustrate this point.

Sigarettes. When filter cigarettes came on to the market (the filter once was an example of great technological innovation and created an entire new, bigger market of smokers), as a government, you could afford to be ‘late’ to the party. No matter when you would allow them on your market (either soon after it was invented and commercialized or years later because you had a non-filter tobacco industry you tried to protect) once you allowed it, the follow would happen. Factories would be built in your country, an entire logistics/distribution chain would be created (wholesale – retail sellers) and marketing would happen in your country. Each and ever of those things could be taxed. The only thing you lost by being late to the party was the headquarter and part of the net profit (all those years you waited, foreign brands grew bigger and bigger. Once you allow it, they flood into your country leaving no room for local entrepreneurs to launch a national brand).

Fast forward to the next innovation on smoking: vaping. Being late to the party (as Belgium is because it first did not allow the sale of it and now has a very restrictive law) means that everybody just orders it at foreign web shops. Production, marketing, almost everything now happens in another country and the only thing the Belgian government can tax is the low paid guy in his delivery van who delivers your package at your home. But he is low paid, so taxing him more could lead to revolt. See above why that is a no no. In other words, being late to the party before the internet left you as a government with about 90% of this new market still to tax. Now, it leaves you with nothing to tax.

Digitalization also, in itself has the effect of either shortening value chains or destroying them completely. Renting a movie used to have a pretty decent chain to tax: wholesale, marketing, video shops (called videotheques in Belgium). A lot of parts to be taxed. Now it is Netflix. Same for music, games, banking … pretty soon we will have self-driving cars and instead of having 6 million individual owners to tax our government will have Google and such as an opponent. And Google is a hell of a lot harder to tax than those 6 million individual owners …

So digitalization leaves less parts of value chains to tax. But, and I circle back to the taxing of individual investors, it also increases the possibilities to avoid taxes. Even if you are not part of the wealthy. The internet is a gigantic information database where people share their wisdom. Which means that as soon as 1 person finds a way to avoid a certain tax, everybody knows of it.

I am member of Facebook group about frugal living where each and every day dozen of tips are shared on how to buy stuff cheaper. Remember, every euro not spend on consumption is 0.21 euro of VAT tax lost to the government. My dad, 64 years old, spends his day on cycling forums. As a result he is now buying cycling gear in China. Those new tax laws have not yet been voted and implemented, and already ways of avoiding it are appearing on line.

And if all else fails, the nuclear option is also a lot easier to use than in the past. Relocating has never been easier and cheaper than now. You can find tons of information on the internet. Keeping contact with friends and family in the mother country is easier thanks to social media and popping over the cheapest thanks to cheap flights or buses . All this means that where once you needed a couple of million to make it feasible to relocate, I now think that 1,2 million euro is sufficient. This would give you 24.000 euro a person to live off. More than enough to live a very comfortable life in most places on this world. With a wealth tax that starts at 500.000 euro and a nuclear limit that can be deployed at 600.000 euro that does not leave a whole lot of tax room for our beloved government to tax.

The sad thing is that they know it. But where our videotheques accepted their fate and quietly disappeared (or re-invented themselves as fast-food or mobile phone shops) our government seems to have no interest in slowly fading away. Just like the industrial revolution has come to an end and been displaced by the digital revolution. The government form that evolved with that industrial revolution will sooner or later be displaced. Just look at our history. There was a long time where the land nobility ruled our society. Then the industrial revolution happened and things changed. In most countries they accepted their fate, stepped aside and let progress follow it course. In other countries they resisted and were unwilling to relinquish their power. Those got their head chopped off … Personally I abhor the value destruction that a revolt brings with it. But hey, I am sure you can find the building plans to a guillotine somewhere on the internet….



Special circumstance investing – taking on to much risk

I sold puts on Ahold Delhaize strike 17,50 expiry 09/17 and received 0,50 euro premium.

I did this for me (10 contracts, 488 euro net premium received), the girlfriends portfolio (11 contracts, 530,20 euro premium) and my parents (5 contracts, 241 euro premium). I just took on to much risk in my own portfolio and I know it.

I knew it from the start. When I transferred all my positions to Lynx (a reseller of Interactive broker) and started looking at all the shiny new toys they offered I felt like a kid in a candy store. And I knew right from the start: this is dangerous.

Especially the leverage part. Leverage is wonderful in good times and can really turbo charge your profits but when it works against you it can devastate your portfolio. I knew I needed to be careful with pulling that particular lever. Only to be used in very special circumstances (hence the name for these posts).

So I did my leveraged construction only at a good price point with an excellent stock. And I would keep the cash I got upfront in cash so I could unwind it whenever it was necessary.

Then the stock went up, my buffer grew bigger and I thought it to be ok to use some of that cash to also write puts. Puts that would not be exercised! The money now has to cover two positions. I am good as long as only one thing moves against me.

Then the put went out of money and I used the same money for two different put series. The same money now has to cover three positions. Profits are great and everything is ok as long as only 1 out of the three positions doesn’t work out.

Then the second put also went out of money and I wrote puts on Ahold. The same money now has to cover four positions. In my own portfolio I definitely have taken on to much risk and I now it. Sunday evening I logged in and only did an order in the girlfriends portfolio (no leveraged position, money only serves two put positions now) and the parents (leveraged position + 2 put positions). Then Monday morning before work I quickly entered the same order in my portfolio.

It will work out. I am sure of it. It will be a nice 488 euro extra in my bank account. But the fact remains I took on too much risk. I went over my own limit* and I know it.

There is something in my personality that likes testing boundaries. I want to know where my limit is. I only got truly, completely utterly drunk around three times in my life. I now know where my limit is and have no need to test it anymore. With other products I, as with everything, got informed. Delving deep into the internet, deep into forums. Determining save doses. Using those save doses. And then, again, testing my limits. Going, knowingly, over the save limit. I wanted to know exactly where my limit was and the only way to be sure is to go over it. I actually have a somewhat amusing post ready about the time I experimented with boosting my natural  testosterone levels. There too, I went over my limit.

So I also knew I would be testing my limits on Lynx. Going over them. Even now, with the put on Ahold Delhaize (AD) done. With knowing I have already taken on too much risk I am thinking about buying some puts on UVXY again. It shot up the last couple of days and doing it now will probably make me another 10% or even 20% profit on the money I put into it. But it would reduce the cash I have even further. It would make the risk position even worse.

I’ll probably do it after I have posted this. Because it seems to be in my nature to do so. I need to test my limit. Just that one time …


*With limit I mean my own limit. I am nowhere near the margin limit of Lynx. They offer up to 8x leverage which in my mind is totally crazy. My own imposed limit is 2x leverage. I am now well above that, approaching 2,5x leverage.

Special circumstance investing – July update

I had good hopes that I would do 0 trades in July. If you are a sloth less is more and nothing is bliss! Alas, the market continued to serve me with some juicy targets so I just HAD to take a swing at them.

What did I do

The ADM put I sold in June expired out of the money so that premium is completely in the pocket! When selling options time is indeed on your side. I love the time decay as it means that I am making money when sleeping or sitting on the toilet …

Last month I told you how I jumped on AB Inbev below 100 euro in the girlfriends portfolio. I really wanted to do it in my own portfolio as well but my money was already pulling double duty for the put with expiry July AND a put expiry August. I eagerly awaiting 21st July. Luck was on my side and AB inbev was still below 100 euro that day. With ADM well above 41 USD and no change of exercise anymore I jumped on the AB Inbev trade with full force. Sold 4 put contracts for expiry December 2017 at strike 100. Got less of a premium than the girlfriend (only 6,25 euro) but with double the amount of puts this trade will net me 2 492,80 euro! I was really lucky because a few days after this AB Inbev published results and the stock went above 100 euro again. Sometimes luck favors the lazy!

Remember I already made 780 euro on AB inbev when it went below 100 euro back in March of this year. These two trades would account for more than 1/4 the of what I would need from investments once I pull the plug and only work three months a year. Back in February I wrote : ‘It is my long held belief that an investor only needs a handful of quality stocks he knows really, really well and a good understanding of all the possibilities of options to do very well for himself.‘ I am even more convinced of this now.

Small explication for the higher amount of puts here. The cash I use here is actually there so I could unwind my leveraged construction if necessary. The longer this construction runs the less cash I need. Because of rising share prices and because 6 months have passed I was comfortable putting 20.000 USD at work (2x times) for writing puts that should not be exercised. But in December the construction will almost be at its end date which means that by then the full cash amount should be available. And that is why I set 40.000 USD at work for the December expiry. I’d like to say I have a spreadsheet that makes all of this more clearly but it’s all in my head (and it’s a mess up there).So small recap, I have:

-a leveraged construction for 450.000 USD with end date January 2018

This pays an upfront cash premium of around 40.000 USD which I use to pay the financing fees and keep so I could unwind the construction if necessary. But also to write puts

– 5 puts on ADM, expiry 08/2017 strike 40 (so 20.000 USD at risk)

-4 puts on AB Inbev, expiry 12/17 strike 100 (so 40.000 USD at risk)

The 21st of July was a very good day for me. I got to write the AB Inbev put but since it was an official holiday in Belgium I also had the day off.  The girlfriend was in Ghent for the festivities there and what do I do when I am home alone? Yep, day trading! And it was a good day for trading: 450 USD of profits! Can  we have more official holidays at option expiry days? I did a little bit of day trading on two other days in July so total profits are 570 USD.

So three days of option writing and day trading in July (and it only took a couple of hours per day) earned me a grand total of around 3.000 euro. An amount that far surpasses my wages from work which sit around 2.000 euro and for which I need to go to Brussels 22 times and work 7,5 hours a day. Too bad not every month is like this because otherwise I could pull the plug on work now.

The girlfriends portfolio

I didn’t do any trades in the girlfriends portfolio this month. UVXY did shoot up the last two days so I might do the UVXY put in her portfolio over the next couple of days. Thinking about it …

I did repeat the AB Inbev put in my parents portfolio on the 3th of July because I forgot their log-in on the 30th of June. So 2 more puts on ABI strike 100, expiry 12/2017. My forgetfulness cost my parents 30 euro since they got 1516 euro in premiums and the girlfriend got 1546 euro the Friday before. Sorry mom and dad!

With AB Inbev now firmly above 100 euro I am looking for a new target to double up in both the girlfriend portfolio and my parents and do another put option. ADM price is too high. Been thinking about Ahold Delhaize, it still hasn’t fully recovered from the price drop a few weeks ago. I like the premium for strike 17,50 in September quit a bit …

Damn, I might do it on Monday which would technically make it a July trade. Screw it, not going to rewrite this post. I’ll just post it in the comments.

To all the nay-sayers

Well, early retirement got some exposure in the Belgian mass media with article’s in Humo and De Tijd. It started with this article by FOB.

Especially the one at De Tijd got the usual nay-sayer comments. Comments we all know not to be correct. So in the name of efficiency and laziness (devote one decent post to it, in future encounters with nay-sayers provide link to this page, done) I put up this rebuttal post.

It can’t be done in Belgium

Most nay-sayers seem to believe that sure, in the USA it can be done but no way it can be done in Belgium! With our high taxes and all …

Sure it is possible. I actually know of two people (one of which was significantly below 40) who did it and a few more well on their way. Some of them even blog about it.

You need to earn a lot of money

Nope. I have only made around the average net wage and I am going to get there around age 47. I even did an additional year of study just for the fun of it (it clearly didn’t result in a high paid job). And made several mistakes. Hell, I have only focused on financial freedom/early retirement for the last two years. I was naturally frugal and started investing as soon as I got my first real job. But still, a better focus would have saved me a few years of working. Actually, if I hadn’t bought my current house 7 years ago I would have probably been financially free now.

In reality, most people who earn lots of money also spend lots of money as they need to wear the ‘right’ clothes/watch, drive the ‘right’ car … Lifestyle inflation is real. And strong among the high earners.

It’s possible if you come from a good (rich) family

Nope again. It helps, that is for sure. Both my parents only went to school until 16. They had saved around 8.000 euro for me when I started working. Yes, one of the guys I know who achieved financial freedom got to live cheaply at a family property. Then again, he has worked for less than 10 years in total. Needing very little money to cover your basic needs is not very motivating to tough it out at a job it appears. Also, he got to live there for cheap because the place was a rundown little farm that hadn’t been renovated since the 1960’s. Since he did a lot of repairs and upgrades to the place, the family probably got the better part of the deal.

You need to know a lot about investing

Thanks to ETF’s (exchange traded funds) with very, very low cost this is no longer the case. Yes, most people trying to achieve financial freedom are interested in investing but that is just because they are the first to realize it is actually possible! Save a good chunk of your pay check, throw it in a decent low cost ETF and you will get there. It really is that simple. No active investment approach necessary.

You need to be lucky with your investments

It does help ;-). The other guy I know off, got lucky with Apple. Good for him. That lucky investment did shave some years of his work career. But that is all it did. He would have still have gotten there. It just would have taken a bit longer. The other guy I know actually got wiped out during the crisis of 2001 (there was a reason he went to life in an old crappy little farm). I did reasonably well with my investments and avoided the big mistakes. But you know who gets lucky at investments? People who invest. Not investing is the best guarantee to never have any investment luck …

You need to live a very cheap life

Well you need to live below your means. Spending less money than you earn and investing the rest. But frugal living and cheap living are two different things. I didn’t get a car before I was 35 and that did help my savings rate. But I lived in Ghent and worked in Ghent, and then later in center Brussels. Owning a car would have been impractical. I always lived on my own but had several friends who shared a house. So I saved on a car, they saved on rent and utilities. I actually rented a pretty charming little house. I just looked around a lot until I found something with an affordable rent.

And yes, as a guy I hardly spend any money on clothing and furniture. But a friend of mine now even has a side business find cool furniture on second hand sites and markets, cleaning it up and selling it on line. Her house is always full with cool stuff. And she actually makes money of it! Another friend combines vintage stuff with self-made clothes and looks fantastic! Nice furniture or clothes do not need to cost lots of money. I didn’t go on a holiday trip until I moved in with the current girlfriend because I am not big on holidays. But I did buy 60 euro whiskey bottles and even a few above a 150 euro. I also liked to combine Belgian fries and stoofvlees from the frituur with drinking a Taittinger Millesime (it goes together fantastically). We all have stuff we like and value. And that is the essence of frugal living. Only spending money on things that really add to your life and eliminating the mindless spending. And believe me when I say that a lot of your spending is mindless.

It’s also fun to find a more frugal way to get the same thing.

I want nice, quality things

So do I. My current bedroom is a full oak one from Etnicraft. It didn’t come cheap. I bought a Vespa scooter. One from Sym looks pretty much the same and would have cost a 1.000 euro less. Thing is, I only bought those AFTER I got a decent stash of money working for me. I didn’t even have a bed until I was 38 because, well, I am guy and a mattress on the floor served me just well. So nice, quality things are absolutely possible, but only when you actually can afford it.

I wouldn’t know what do to with the time

Really? Are you serious? Honestly, I am bit sad for people saying this. Do they really have that little of imagination? Books, music, series, movies: there is a ton of quality entertainment that exists. Exploring all of that would take me three lifetimes. And that is the passive stuff. Learning new stuff (raspberry pie, maintenance of old timer motorcycles), improving my health (eating better, more sports), travel, organizing classic trance parties, spending time with old friends and meeting new friends … honestly even when I do not need to work I think I will not have enough time to do everything I want to do. Go speak with a pensioner (my parents both retired around 56 -58) and most of them will tell you they are busier after retirement than they were before

I like me job so I do not mind having to work

Great for you! Now are you sure you are going to like it for 45 years? Or perhaps the job/boss/co-workers will change and the job you used to like is now a complete and utter crapfest. You might get fired … Aiming for financial freedom/early retirement doesn’t mean you cannot work anymore. I certainly plan on working after achieving financial freedom. Just not a whole lot. If I stumble upon something I enjoy and it pays all the better. But money will no longer play a role in that decision. I’ll be free to do with my time whatever I want to.

Frugal living: keeping the old timer motorcycle or not?

A little confession and question time. When I was in between jobs (feb – april) this year I bought a 125 cc Vespa scooter (and did some day trading). I am very happy with the Vespa and I am now wondering why the hell I didn’t buy a motorcycle earlier.

The thing is, and this is the confession part, I did. You see, I also was in between jobs roughly a year before. Kinda from sept 2015 till may 2016. Kinda because I only was really unemployed from march ’16 till 1st of may 2016. But I also didn’t really had to work between sept ’15 and march’16 (part of a severance deal with my employer). It’s a long and complex story. And yes, the severance package was finger licking good. Well anyway, during that period I also bought a motorcycle (and did some day trading, yes I am starting to see a pattern here …).
I bought an old-timer. A berini m21 (probably deluxe version) form the 1950’s. It’s a beauty.


Berini is a Dutch brand and has some following in Holland but is largely unknown in Belgium. Meaning I got it at a good price: 350 euro. I haven’t really driven the motorcycle as the old breaks needed some work and I put it at a friends place who is an old-timer aficionado. But he is taking his sweet time ….

Anyway, I bought it because I like old-timer motorcycles and part of me views it as a fun pass time once I am semi-retired. Working on it. Learning some mechanical skills. Driving around the country roads here. Perhaps going to an old-timer meet up …. And old-timer motorcycles are a hell of a lot cheaper (especially if you limit yourself to 125cc max) than cars ….

I still like that idea. But with the new job in Brussels and going swimming and still needing to do some renovations at the house, our large garden and such I am not going to have the time as long as I am working full time. I do have plenty of storage space to put it. And it is not costing me anything just standing there.

On the other hand I know I can sell it and easily get my money back. It is 400 euro after all. But then, day trading in 2016 made me 2.455 USD and last Friday I passed the 3.000 USD mark for 2017. If I really want another 400 euro I can easily suck it up and do some extra day trading in the evening. I hardly do it anymore since working again because it is sitting behind a screen and staring at numbers, something I already do for 7,5 hours at my job … But it would also take me time behind the PC to sell it. So spending that time day trading would get me the money AND I would get to keep the motorcycle. And I know that kind of reasoning is a very dangerous slippery slope. It is one of the reasons I am not a big fan of the day trading. It screws with your view on money. Last Friday I made 300 USD in less than 30 minutes. You start getting these thoughts where 100 USD equals a quick in an out trade in Google… But the psychology of day trading is something for another post if some of you are interested in hearing my thoughts/struggles with it.

Back on track for this post. The confession part was that when I do not need to work I seem to buy a motorcycle and do some day trading. The question is, do I keep the Berini M21 or not? Even if I will probably not use it or have time for it the next 5 years?

On investing, being lazy, cumulative returns and scalability

I love investing. Which is good because I believe to be any good at it you need to love it (link). When I figured out my leveraged construction I was ecstatic. If it worked (and it does!) I only needed to do a roll over once a year and be done. It was the ultimate lazy approach to investing and an almost guarantee to beat the market for 4 out of 5 years (backtracking over the last 25 years showed 5 out of 25 years where it would have not worked). So about half way 2016 I really believed my active investments days were behind me. My inner sloth was very happy!

But then, well a curious thing happened. I kept reading financial stuff. ‘Old habit’, I thought. ‘It will tapper out’, I thought. Then I got a bit more active in the whole FIRE community and some people do really cool stuff. And I grew restless. I may not have needed to be an active investor anymore but I really wanted to! You see, it just tickles my brain in all the right places.

My weird mind

My mind likes numbers (I am crap with names, hell, I am bad with people). It also likes to figure stuff out. Find loopholes. Find errors in reasoning. It’s perfect for finding stock that is cheap but shouldn’t be. It would probably be good for shorting too but I rather have the stock go up (guess I rather am optimistic).

I just love to know how a company makes its money. Why it is better at it than other companies.

When I am bored I like to replay old trades in my head. See where I could have done better.

I often use sexual references to describe the attractiveness of a certain company at a certain price point or of a particular ‘cool’ construction. I don’t do it too shock or amuse people. It’s just that this is the connection my brain makes. An attractive young lady in a la fille d’o outfit or writing a nice put option: they have me both drooling. I know this is not normal but that is how deeply imbedded in my brain the investing stuff is. I could be completely, utterly drunk. So drunk that walking or uttering one coherent sentence is completely out of the question. But walk up to me and say ‘coca-cola below 40’ and my slurred drunken response will probably be: write put now.

So I started to dabble with puts and such again. Just because I was bored. Sure, the money is always welcome but I know it will at the very best only reduce the time I need to work with one year. It’s peanuts compared to my overall portfolio. But it is so much fun!

My lazy, lazy side

The other reason I like investing is because you can be very lazy at it and still make the big bucks. If done right it’s a one-time effort for a life time of profit. Do your homework, find an excellent company at a reasonable or cheap price and done. Buy it, hold it, go do something else (except if you have my weird brain).

Now this is a very, very exceptional thing. With almost everything else you need to redo the effort to get the same reward. But not with investing. Actually, the reward can even increase while you do nothing. Most companies try to increase their dividends over time. A 10% increase on a 100 EURO stock gives you a 10 EURO reward. But hold onto that stock for many years and it might increase another 10% when it is worth 200 EURO, giving you a reward of 20 euro! Cumulative returns for the win!

The only thing I can think of that came close to this was the music industry (before the internet and MP3’s). Make a record once and then have income of it for the rest of your live. For most of us, becoming a successful music artist is out of grasp. But ETF’s provide a good way to all of us to profit of this unique aspect of investing.

This makes for some truly ‘fun’ consequences. My first real job was at a telecom operator. My total wages there for those 6 years will have been around 144.000 euro (around 1.800 euro a month but holiday money, 13month and profit bonus ..). With savings averaging around 500 a month this means I saved 36.000 euro in total. Add in another 12.000 euro I was able to save from my severance package (a story for another post). And my total savings for that time are 48.000 euro. Investing this sum at a 7% average return will have this amount double every 10 years. Give it 20 years and it should become 192.000 euro. Deducting the original investment from this means that my investments on my savings from that job will equal my TOTAL pay I ever made at that job! The higher your savings rate and the higher your return rate, the less years it will take for your investments to eclipse the total wages of the job! If that prospect doesn’t excite you and gets you investing I don’t know what will.


The last great quality of investing is that it scales so easily. Investing 10.000 euro or 100.000 euro takes the same amount of effort. It’s just typing in an additional zero. Yes, there are some limits where having to deploy too much money can become a hindrance. But you are talking about hundreds of millions of euro’s before you start encountering  that issue. And even then it depends on how the stock market in general is doing. When the overall market is setting record after record (like now) it may be difficult to deploy large sums of money at favorable returns. But for us, small time investors, for all practical purposes the scalability of investing is limitless.

I love scalability. I wish that housecleaning or doing the dishes was scalable!

I find we do not talk enough about scalability and cumulative returns in the FIRE community. This whole early retirement thing is, in my mind, only possible thanks to the combination of these two powers. Savings also have a certain scalability to it. Once you have developed the savings ‘skills’ you soon discover you can apply that skill set on a wide variety of items/events. And savings also have a certain cumulative return where making a saving in one area often has knock on effects in other areas. Buying a hair trimmer and no longer going to the hairdresser saves money. But it reduces your car use, thus unlocking additional savings in gas cost and wear and tear on your vehicle. It also frees up time which you can use to find additional savings … But savings alone is not enough. You then have to invest these savings so they can benefit again from the cumulative returns of the market. Both of them together is what enable you to achieve financial freedom.

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