Go back

Profitus news Investing in Lithuania: Trends and Opportunities

2024-07-08 12:00:00


Investing in Lithuania: Trends and Opportunities

Investment opportunities in Lithuania are truly vast. Anyone can make money or protect their savings from devaluation with just a bit of knowledge, discipline, and patience. Investing in Lithuania can be done through various instruments: securities, real estate, precious metals, business ventures, etc.; and various strategies: long-term, short-term investments, primary or secondary market. Today, significant economic growth in Lithuania is noticeable, which is very attractive to investors. In this article, we want to elaborate on investment, its opportunities in Lithuania, and review trends.

What is investing?

Although financial literacy in Lithuania seems to be growing, we still hear the question, what is investing? The answer is very simple: investing is putting your money to work or aiming to preserve or increase your capital. Investing money has always been associated with two aspects: protecting money from devaluation and the opportunity to earn from interest, dividends, and other returns. You can start investing with just a few dozen euros, and it’s not difficult to do. There are many investment opportunities in Lithuania that can help preserve the value of your money or make a profit. By putting your money to work, you can create an additional passive income stream, which helps ensure daily well-being and accelerates the saving process. Investing in different areas allows for diversification, i.e., spreading investments across various projects to further reduce risk. Investing is categorized into short-term and long-term based on the chosen period.

Short-term investing in Lithuania

According to experts, short-term investing is when the investment period does not exceed 1 year. Usually, investments are made for 1, 3, 4, 6, 9 months, or a year. This investment strategy is favorable for those who do not want to lock in their money for a long time and expect to get it back sooner along with earnings. However, short-term investing has a few drawbacks: the earnings are generally lower compared to long-term investing. Moreover, predicting market fluctuations over one year is much more challenging than over, say, ten years, so this method can sometimes become even more complicated, depending on the chosen investment instrument. For more on what investing is and the most effective methods, read our other article “Short-term investing.”

Long-term investing in Lithuania

Long-term investing refers to putting money to work for one year or more. Investing money for a longer period allows for higher returns and clarity, which reduces risk. However, when talking about long-term investing, it’s generally considered to be for a much longer period than just over a year. This choice allows for higher earnings but eliminates the possibility of quickly using the invested or earned money. In short-term investing, results can be tangible within a few months, whereas in long-term investing, they are only realized at the end of the term (unless you receive monthly interest, dividends, or other capital gains). Long-term investing can help achieve larger financial goals, such as saving for a home, a new car, a distant trip, etc.

Investing in Lithuania by budget

Investing money in Lithuania is becoming increasingly popular every year. Lithuanians choose to put their money to work by converting it into real estate, securities, cryptocurrency. In such a variety of financial instruments, it can sometimes be challenging to decide where to invest 100 euros, where to invest 1,000 euros, 10,000 euros, or even more. Larger sums are usually invested in the primary market, while in the secondary market, you can earn by investing just a few dozen or a few hundred euros. However, to maximize earnings, you need to know where it’s most beneficial to invest certain amounts.

Where to invest 100 euros?

Investing 100 euros, or even a smaller amount, is not possible everywhere: after all, you can’t buy real estate for such money or start a large business. However, some investment instruments allow even a smaller amount to be put to work. For example, you can invest a hundred euros in the secondary market. Various platforms offer to invest in real estate projects, business loans, or even cryptocurrency. Usually, such an amount is allocated to short-term investments, lasting up to one year, or periodic investments, where such an amount is regularly allocated every month, two, three, four months, half a year, or similarly.

Where to invest 1,000 euros?

Do you have 1,000 euros that you want to put to work? Let's consider where to invest 1,000 euros. This is a fairly good amount that can help earn money in the long run. This amount can be invested in both the primary and secondary markets: various investment platforms or directly into businesses. Of course, this amount is not large enough to buy a significant quantity of highly valuable stocks, but earning a few hundred is definitely possible. 1,000 euros would be more profitable for short-term investments. Another option is that 1,000 euros can become the initial amount for periodic investment. For example, investing 1,000 euros and additionally investing 100 euros monthly with a 6 percent annual interest rate, the total amount after a year would be around 2,300 euros.

Where to invest 10,000 euros?

10,000 euros is an amount that can be invested quite broadly. First, it can be invested in stocks, bonds, other securities, or crowdfunding platforms. This amount can also be put to work in real estate – while it might not be enough to buy property for rent, it can always be used in crowdfunding platforms. Another good idea is investment funds: stock, bond, or mixed funds can help earn a significant amount without much risk. Today, the most profitable investment funds, when investing 10,000 euros, can help earn up to 10 percent annual return. For example, investing in stock funds for 10 years can yield a 10 percent return, which means that after this period, your invested amount would grow to nearly 26,000 euros. However, stock funds are quite risky. You will take less risk by investing in, for example, bond funds, but you can only expect a 3–5 percent annual return.

Where to invest 100,000 euros?

100,000 euros is a large amount that, when invested, can generate a substantial passive income. To ensure your investment portfolio is as protected as possible from inflation and other potential risks that could threaten to lose part of your money, we always recommend considering diversification first. This means spreading investments across different projects to reduce risk. And if you notice that your investment asset is not that valuable, you can always sell part of it (of course, if the asset is liquid). Investing in loans, such as government bonds, can be a very safe way to earn, but lower risk equates to lower earnings. Another way to earn is investing in stocks. Investing a hundred thousand in index funds or ETFs can diversify risk and maintain the opportunity to earn safely. This amount can also be favorably invested in business, real estate, precious metals, currency, etc.

Investing in stocks in Lithuania

Investment opportunities and benefits are clear to many, but in Lithuania, there are still questions about how to invest in stocks to succeed, how much money to allocate, and what stock investing in Lithuania is worthwhile. So let's discuss in more detail which stocks are worth investing in.

Which stocks are worth investing in?

When choosing which stocks to invest in, you first need to conduct a small market analysis. Look for joint-stock companies that hold a strong position in the market, are stable, have no debts, and allocate part of their earned profit to shareholders rather than just investing in business expansion. However, it should be remembered that well-known brands do not guarantee profitable stocks. Investors have always paid much attention to technology, healthcare, renewable energy, finance, and industrial sectors, whose stocks are still valuable today. We encourage you to remember that past results do not guarantee future results, so companies or sectors that were profitable in the past will not necessarily be profitable in the future.

How to invest in stocks?

To invest in stocks, you first need to clarify your financial goals and the risk you are willing to take. Decide on the period you want to invest your money, and the specific amount. A particularly simple way to start is to find a broker: the most popular platforms for investing are “Saxo Bank,” “Interactive Brokers,” “Revolut,” “Robinhood.” We always recommend diversifying your portfolio and investing in stocks from several different sectors or countries to experience less risk.

Investing in bonds in Lithuania

Investing in bonds in Lithuania, as in the rest of the world, is of two types: government and corporate securities. Government bonds are usually less risky, especially if investing in bonds of an economically strong and stable country, while corporate bonds, although offering higher returns, are much riskier. However, both types of debt securities have several advantages and, unfortunately, several disadvantages.

Advantages and disadvantages of bonds

The biggest advantage of bonds is that they generate income continuously and stably. Another plus is that bonds are less risky compared to other securities. By investing in government bonds, you allow the government to use your money and contribute to the improvement of the country's economy. Unfortunately, investing in bonds risks losing part of the profit due to inflation, some securities have low liquidity, making them harder to sell, and their value can decrease when interest rates rise.

How to buy securities?

Buying securities is not difficult. However, before purchasing bonds, you must conduct a thorough analysis: review the offered bonds, their terms, interest rates, maturities, credit ratings, and other important data. These can help you identify potential risks and protect yourself from poor choices. If you are not willing to invest yourself, then intermediaries – investment companies or platforms that help people invest in reliable sources – can be an excellent solution. Before investing in bonds, make sure that you will be pledged real estate, as such collateral reduces your risk and makes you feel more secure.

Where to buy securities?

To buy bonds, you don't need to travel far: the internet is enough to purchase bonds issued by foreign countries or businesses. You can also purchase bonds in banks or investment funds. Some of the largest online platforms for buying bonds are “Interactive Brokers,” “Saxo Bank,” “Bondora,” “Revolut.” Banks also often offer bond portfolios.

Investing in real estate in Lithuania

Investment in real estate in Lithuania has always been considered a safe investment method. Lithuanians invest in various forms of real estate: houses, plots, apartments, commercial premises, garages, warehouses, etc. However, in recent years, investment in real estate via crowdfunding platforms has become particularly popular. These platforms allow you to invest in real estate or its projects in Lithuania and around the world, investing even small amounts and earning from rent or asset value growth.

Is it worth investing in real estate?

Although real estate prices have recently started to rise significantly, it's safe to say that investment in this area remains relevant and useful. Real estate does not lose value, protects against inflation, and allows for monthly returns, providing a stable income stream. In some cases, real estate is even pledged for your investment.

Advantages and disadvantages of real estate

Like other investment forms, real estate has both advantages and disadvantages. The main advantage of real estate is its price stability: despite market fluctuations, property value does not drop as significantly as other financial instruments. Another advantage is that real estate can generate a regular income from rent. Moreover, if investing in real estate through crowdfunding platforms, the property is usually pledged to you, making it a safer option. However, the significant disadvantages of investing in real estate are the need for a substantial investment, low liquidity, and relatively high maintenance costs. Often, it takes a significant amount of money to acquire a property, and it can be challenging to sell it quickly if needed. Additionally, real estate requires ongoing maintenance costs: repairs, insurance, property taxes.

Where to invest in real estate?

Investing in real estate can be direct or through crowdfunding platforms. Direct investment involves purchasing physical properties, like an apartment, house, or land, to rent or sell for profit. On the other hand, crowdfunding platforms allow smaller amounts to be invested in real estate projects. For example, the “Profitus” platform allows investments from as little as 100 euros, with a yield of up to 13.6 percent.

Investing in loans in Lithuania

Investment in loans in Lithuania is becoming increasingly popular. Some of the main advantages of investing in loans are relatively high returns and minimal involvement: by investing in loans, you allow the borrower to use your money and earn from the interest. Various lending platforms offer opportunities to invest in loans in Lithuania. For example, “Savy,” “Finbee,” “Paskolų klubas,” and similar platforms allow investing in consumer loans, business loans, and real estate loans, earning passive income from interest.

How to invest in loans?

Investing in loans is very simple. First, find the desired platform: analyze and select the most reliable one. Register and create an investor profile, after which you can view the available investment options and select the most appropriate one. Many platforms allow you to start investing with a relatively small amount. Once you've chosen a loan to invest in, you can allocate the desired amount, and the platform will take care of the rest: track the borrower's payments, calculate interest, and transfer funds to your account.

Where to invest in loans?

Many platforms in Lithuania offer opportunities to invest in loans. Among the most popular are “Savy,” “Finbee,” “Paskolų klubas,” and similar platforms. Each platform has its own specificities and offers various types of loans, including consumer loans, business loans, and real estate loans.

Investing in gold in Lithuania

Investing in gold has always been considered a stable investment method. Gold prices do not fluctuate as much as other financial instruments, making it a safe option for preserving and increasing your capital. Gold can be invested in various forms: purchasing physical gold (bars, coins) or investing in gold securities, gold exchange-traded funds (ETFs), and similar financial instruments.

Advantages and disadvantages of investing in gold

One of the biggest advantages of investing in gold is its price stability: gold does not lose its value as quickly as other financial instruments, making it a safe option for preserving capital. Another advantage is the potential for price increases: gold prices tend to rise during economic uncertainty. However, investing in gold also has some disadvantages: the need for significant capital, low liquidity, and the lack of regular income. Purchasing physical gold requires a significant amount of money, and selling it quickly can be challenging. Additionally, gold does not generate regular income, unlike other financial instruments that provide interest or dividends.

Where to invest in gold?

Investing in gold can be done through various channels: purchasing physical gold, investing in gold securities, gold ETFs, and similar financial instruments. You can buy physical gold from specialized shops, banks, and online platforms. Investing in gold securities and ETFs can be done through brokers or online investment platforms like “Interactive Brokers,” “Saxo Bank,” and “Revolut.”

In conclusion, investing in Lithuania offers numerous opportunities for preserving and increasing your capital. Whether you choose to invest in securities, real estate, loans, or gold, it’s essential to conduct thorough research and analysis before making any investment decisions. By understanding the market and diversifying your investments, you can achieve financial stability and growth.