1.7M NW portfolio advice needed - 35y M

[gabrielbarry]

Hi,

I need your advice on portfolio planning with the goal of FIRE in the upcoming few years (ETA is still not clear).

Background

- I´m 35 years old, Total Net Worth of around 1.7M EUR, working in Tech

- In recent years I have lived as a Digital Nomad in Europe, mainly in Spain, and now looking to live in a fixed place in Europe - potentially Spain, Italy, or The Netherlands

- I recently got a big USD cash for selling company Stocks (RSU), making me rethink the all-portfolio split.

- My Goal is to retire and stop working as soon as I feel financially comfortable I have enough

- The below net-worth details are of myself, without my partner, who has very little savings today but is starting now career as a developer in tech, with a good salary.

- In the upcoming 3-5 years - we looking to have a kid and buy a house that we can live in.

- in 2022 I was able to increase my NW by 140K EUR (spending 25% of income), and in 2023 will be around 200K EUR increase in NW (spending 20% of income).

Net Worth breakdown:

Investment Value % of NW Real Estate - Outside Europe - generate 1.75K a month
950,000 EUR
56%
Liquid money in high yield saving account, in EUR, USD (4-5% interest)
385,000 EUR
23%
Stocks & EFTs (Investment, Private Pension)
320,000 EUR
20%
Crypto Coins
18,000 EUR
1%

Stock & EFT Breakdown:

Investment Value % of overall Stocks & EFTs Private Pension (accessible only at retirement age) - Stocks & EFTs, government bonds
170,000 EUR
53%
EFT S&P500
65,000 EUR
20%
EFT VWCE
41,000 EUR
13%
Company Stock - RSU
30,000 EUR
10%
Spain Private Pension - Global Index (accessible only on retirement age)
13,000 EUR
4%
Total 320,000 EUR 100%

Overall of the Stock & EFTs:

- 40% is invested in S&P500 which is 7.5% of overall NW

- 10% in one US company tech stock (RSU after tax)

- 4% in Europe index funds

- 1.5% in Emerging markets

- 1.5% Nasdaq

- 3% Corp Bonds

- 40% in government bonds with guaranteed interest and other assets holds by the pension funds

Some specfic questions

1. How would you use the money in a high-yield savings account? I think if keeping this money at very low risk, as in the upcoming 2-3 years I expect that I would want to buy a house that I actually want to live there..

2. Every month I save around 8-9K EUR, how would you invest it?

3. Any portfolio adjustments you would recommend?

4. Any other recommendations would be appreciated!

Thank you!

 

[onepassionate1]

@gabrielbarry Italy, Spain or the netherlands ??

That’s a wide difference .

I am from NL, nowadays with pension in LU.

Trust me , with such a high net worth you don’t want to be in NL. At least from a tax point.

NL has a wealth tax(box3) based on a virtual result.
Plan is to amend the system in the coming years, and it is not going in a favorable direction.

You can play around with the following calculator:

https://www.berekenhet.nl/sparen-en-beleggen/belasting-box3-spaargeld-vermogen.html

When there is no need to work anymore, look at countries based on what is really important for you.

Could be:

Safety

Education (for kids)

Child support

Housing

Weather

Capital gains tax

Wealth tax

Inheritance tax

Distance (to family & friends)

Without all kind of taxes, you reach fire earlier.

 

[jodebrode]

@gabrielbarry with this value don't ask advise in reddit and hire a portfolio manager

 

[ashleyta]

@jodebrode Nah, that's a way to lose money. OP is doing great without paying fees.

 

[holdingon2god]

@jodebrode My man just showing off

 

[cheyanne]

@gabrielbarry It would be helpful to know the budget for this new house and what you wanna do with the rest (dividends/capital growth etc)

 

[gabrielbarry]

@cheyanne Probably around 500K-600K Euros

 

[onepassionate1]

@gabrielbarry Depending on what interest rates are, using own funds for the house is maybe not the most optimal.

If a worldwide etf does on average 6 to 7% yearly, it could be wise to still have a mortgage.

Further in many european countries you buy not a lot of house for 500-600k

The rentals i have in NL are around 7k a square meter.

Our place in LU is 12k a square meter.

The place we looked at in Italy was just 1k per m2, but needed renovations bringing it to 2.5k per m2. And that was a 500m2 free standing house.

 

[formeratheist]

@gabrielbarry !Remind Me 1 Day

 

[hiddenlotus]

@gabrielbarry As Ben Felix explained in his latest podcast, you should evaluate 100% stock allocation (forever) if you have a retirement period greater than 30 years.

 

[lexmark]

@gabrielbarry Stop working? You plan to eat and sleep all day long?

 

[ashleyta]

@lexmark OK boomer

 

[livfulfilled]

@gabrielbarry Musthave at least 10-15% of wealth in crypto - BTC&Eth. This 10% without selling can be 50% of all capital in next 10 years. So its good idea for reducing crypto in some chunks at bull market to stablecoins. This stables like USDC, USDT can make also 3-15% more per year. Of course there are some real risks, so need diversification

 

[misslindabeaz]

@gabrielbarry Sorry on mobile so I can't see the full description of the real estate, but you should be getting at least 3k net per month in rental income. This can be your monthly spending money in perpetuity.

If you can do 2 more years of the same savings you can buy a nice place in spain/Italy for 400-500k cash and not worry about any mortgages.

Keep the etfs, maybe move 50% of your cash into them as well which will be your retirement fund/safety net/trust fund for the kid.

With 3k income with no rent and mortgage you can have a nice life especially if there is a second income

 

[ashleyta]

@misslindabeaz Paying a house cash is often bad advice. Depends on the interest rates you can get, don't generalize.

 

[tabitha8]

@gabrielbarry Maybe exposure to emerging markets would rebalanced your assets allocation which is very us oriented as of now.

For the liquid cash, which high yield bank account gives you 4/5% over that much cash?

 

[gabrielbarry]

@tabitha8 USD - I bought Tbills - around 5%+
EUR - split between Revolut (3.85%) and Trade Republic (4%). Also Trading212 gives 4%.

 

[ashleyta]

@gabrielbarry My man, you're more knowledgeable than most of the redditors here. After reading the comments my only advice is to not listen to them. Maybe try posting on /r/FIRE instead.

 

[emerritt]

@gabrielbarry I think most people here can just aspire to reach your net worth level. If you don’t mind , can you please share how you made that in first place ?

 

[daibhead]

@gabrielbarry I would keep money dedicated to buy a house in a high yield saving account, especially with 2-3 years period in mind. I have a very simple approach to investing, so would recommend all in one ETF such as V80A or VWCE depending whether you want 80% stocks and 20% bonds or 100% stocks like VWCE. I would also recommend diversifying the wealth in some non EU financial jurisdictions.