@amethyst86purple Hooooly moly! Congrats on making all the right decisions.
24 yo | ~42K savings | retirement advice
- Thread starter amethyst86purple
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mcgovern55
New member
@amethyst86purple That's a very decent portfolio for a 24 yo. Good job!
@amethyst86purple Emergency fund is too low, its not just about losing your job, its also for unpredicted expenses like car repairs, home repairs, healthcare, relatives help, etc etc, even if some of these dont apply to you, there will be others not listed here.
At the same time you say you have 13k in checkings acc so im confused how that is different. Consider changing your perspective around these two and group them together. Your cash holdings should be equal to emergency fund + 2-3k liquidity for the current month.
Drop the stocks or at least stop buying stocks, etfs are the way to go.
If you want a big risk play like you said just go for a decent crypto allocation that makes you feel comfortable - no one can advise you what “comfortable” is except your own stomach.
Drop eth (or dont buy more) and focus on btc.
The portfolio of the past was bonds + etfs.
The portfolio of today is etfs + crypto.
Ideally you want 1 single etf like VWCE or sp500 and 1 single crypto which is obviously btc.
Dont overcomplicate your portfolio more than that.
Yes i will get downvoted for the crypto part since this sub hates it but its clear you know what youre doing. If youre not sure, spend more time on understanding global economics, monetary policies of 21st century and dive way deeper into bitcoin mechanics. Spending your time on these three will give you much more benefits than spending your time understanding different etfs and their specific portfolio allocations and structures (considering in the end it will always devolve to either all world or sp500). Spending your time on the former three will help you make an educated decision about your own portfolio allocation between etf and crypto based on your own risk tolerance.
As for a mortgage - since youre not sure, just dont do it now. The risk is that youre young still and might have to move. Keep contemplating it though as time spent on thinking about it will give you clarity at one point. When youre ready in your life only buy one primary home to live in, i.e. dont invest in real estate that you dont live in.
At the same time you say you have 13k in checkings acc so im confused how that is different. Consider changing your perspective around these two and group them together. Your cash holdings should be equal to emergency fund + 2-3k liquidity for the current month.
Drop the stocks or at least stop buying stocks, etfs are the way to go.
If you want a big risk play like you said just go for a decent crypto allocation that makes you feel comfortable - no one can advise you what “comfortable” is except your own stomach.
Drop eth (or dont buy more) and focus on btc.
The portfolio of the past was bonds + etfs.
The portfolio of today is etfs + crypto.
Ideally you want 1 single etf like VWCE or sp500 and 1 single crypto which is obviously btc.
Dont overcomplicate your portfolio more than that.
Yes i will get downvoted for the crypto part since this sub hates it but its clear you know what youre doing. If youre not sure, spend more time on understanding global economics, monetary policies of 21st century and dive way deeper into bitcoin mechanics. Spending your time on these three will give you much more benefits than spending your time understanding different etfs and their specific portfolio allocations and structures (considering in the end it will always devolve to either all world or sp500). Spending your time on the former three will help you make an educated decision about your own portfolio allocation between etf and crypto based on your own risk tolerance.
As for a mortgage - since youre not sure, just dont do it now. The risk is that youre young still and might have to move. Keep contemplating it though as time spent on thinking about it will give you clarity at one point. When youre ready in your life only buy one primary home to live in, i.e. dont invest in real estate that you dont live in.
amethyst86purple
New member
@krevikes I sized it appropriately I think, at least for now, no wife, no kids, no car, no personal home to put in money for repairs, I got a renovated apartment and so far nothing’s breaking, healthcare I never spent a dime myself, the insurance covered everything every time and I frequent hospitals a lot 
I do send money back home but its not too much either. In case of unemployment the JobCenter roughly pays 1300 to 1500 euros per month, given that I don’t leisure travel when I’m unemployed and don’t eat out everyday of the week I can easily last on €600 per month tops (family back home doesn’t depend on me much either), so for such circumstances €2.5k sounds about right. The €13k in checkings is supposed to be invested, I’m just figuring out the right ETF to put money in. When I get married, have kids or a car then I will definitely upsize it to at least €7.5k or something like that. For now, Sixt and Miles are very lucrative as for this year I only spent €500 in total on car sharing (and that’s me trying different cars when I get bored just for the fuck of it) so I’ll avoid it until it becomes necessary.
I do send money back home but its not too much either. In case of unemployment the JobCenter roughly pays 1300 to 1500 euros per month, given that I don’t leisure travel when I’m unemployed and don’t eat out everyday of the week I can easily last on €600 per month tops (family back home doesn’t depend on me much either), so for such circumstances €2.5k sounds about right. The €13k in checkings is supposed to be invested, I’m just figuring out the right ETF to put money in. When I get married, have kids or a car then I will definitely upsize it to at least €7.5k or something like that. For now, Sixt and Miles are very lucrative as for this year I only spent €500 in total on car sharing (and that’s me trying different cars when I get bored just for the fuck of it) so I’ll avoid it until it becomes necessary.amethyst86purple
New member
@krevikes I completely agree with the crypto part, I studied how it works and its convincing enough to not miss out on it so a small allocation in BTC should be more than enough. But yeah primary goal is to get myself 1 ETF to invest in so that it compounds. I think I just get confused when I see 100s of FTSE AW and S&P500 but that’s just poor research and ignorance on my part. Some ISIN nos that people mention on this sub show that they only started in 2020 and I start to think why people are investing in such a new fund even though it tracks the same ticker, I mean isn’t there supposed to be some one big OG standard FTSE all world in which people from like 10 20 years ago are investing?
@amethyst86purple IE00B4L5Y983 this the OG all world, started in 2009 - look it up on justetf.com. Its the ishares/blackrock one following the msci index. People on the sub always recommend IE00BK5BQT80 which is from 2019 but its vanguard and following the ftsi index. Vanguard is a much more loved company and thats why everyone recommends it instead. It doesnt really matter, pick either.
IE00B5BMR087 here’s your og sp500 from blackrock and heres the newer vanguard one IE00B3XXRP09.
All of the above are accumulating versions.
Also another reason for european etfs being relatively newer is that from 2014 theres a EU directive prohibiting eu residents from buying US etfs. Before that europeans were loading on US ones and thats why the eu etfs seem newer because most of them are from after 2014.
IE00B5BMR087 here’s your og sp500 from blackrock and heres the newer vanguard one IE00B3XXRP09.
All of the above are accumulating versions.
Also another reason for european etfs being relatively newer is that from 2014 theres a EU directive prohibiting eu residents from buying US etfs. Before that europeans were loading on US ones and thats why the eu etfs seem newer because most of them are from after 2014.
amethyst86purple
New member
@amethyst86purple USD in the names means the fund is trading in USD at the source. Almost all etfs are structured like that regardless of whether they are domiciled in the US or EU (Ireland). What you are asking for is what the instrument is deniminated in. In this case the fund is denominated in EUR but can buy that exact same fund from the London Stock Exchange (LSE) under a slightly different ticker (but same ISIN) and it will be denominated in GBP. You can find all tickers and the corresponding exchange at the bottom of the page for the respective fund on Justetf.com.
Now that you know that, the question is does it matter what currency denomination you buy the fund and whether there is currency exposure for you. The answer is “no”. If one currency appreciates or depreciates against another it makes no difference since when you sell you will get less/more of that currency but once you convert it to your home currency it will be for a higher value. Ideally you want one denominated in your home currency so at least you won’t incurr the exchange fee (which is minimal anyway). There’s a lot of information on reddit and other sites where people ask this question. The whole thing is a little hard to wrap your head around since the math is going in circles but you can also test the scenario in excel and in under 30min you will see the end result in your home currency will always be the same regardless of any currency movements.
Now that you know that, the question is does it matter what currency denomination you buy the fund and whether there is currency exposure for you. The answer is “no”. If one currency appreciates or depreciates against another it makes no difference since when you sell you will get less/more of that currency but once you convert it to your home currency it will be for a higher value. Ideally you want one denominated in your home currency so at least you won’t incurr the exchange fee (which is minimal anyway). There’s a lot of information on reddit and other sites where people ask this question. The whole thing is a little hard to wrap your head around since the math is going in circles but you can also test the scenario in excel and in under 30min you will see the end result in your home currency will always be the same regardless of any currency movements.
bccoachwaelti
New member
@amethyst86purple I earn about 5.5 netto and I myself look at real estate. Specially in München you have a lot of opportunities. The rates are high but then that lowers the asking price. Also don’t forget that if you end up renting the place you get 42% of Zinsen back from the tax office. Currently the market is investors market. If you are planning to move in the future, don’t worry about that. In 10 years you can sell the place tax free. My advice to you would be to go look for an Immobilienberater or Finanzberater and see what they have to offer, then decide for yourself.
amethyst86purple
New member
@bccoachwaelti Thanks for your input. You’ve a nice salary package, can I ask how many yoe you have? And also are you getting tax cut because of marriage or no?
Is there a term for it when we get 42% of interest back if the property is rented out? i’d like to research more on this.
Is there a term for it when we get 42% of interest back if the property is rented out? i’d like to research more on this.
bccoachwaelti
New member
@amethyst86purple I have 5 yoe. No tax cut because of marriage. Steuerklasse 1.
There is no specific term for the tax cut. Maybe google: Immobilien als Kapitalanlage, was kann ich von der Steuer absetzen.
As I said before, just look for an Immobilienberater or Finanzberater. If you were living near Stuttgart I could’ve recommended you one.
There is no specific term for the tax cut. Maybe google: Immobilien als Kapitalanlage, was kann ich von der Steuer absetzen.
As I said before, just look for an Immobilienberater or Finanzberater. If you were living near Stuttgart I could’ve recommended you one.
amethyst86purple
New member
@bccoachwaelti Thanks a ton mate.
bccoachwaelti
New member
@amethyst86purple Good luck. Just remember that real estate is a great way of getting tax returns. Look into it. You already have stocks and crypto so diversify and go for real estate. You won’t be disappointed, at least I’m not. P.S. this is not a financial advice, just my personal opinion.
straightcurvylines
New member
@amethyst86purple Do you want to invest in real estate in Portugal? I can get you great Yelds....
kayleeavani
New member
@amethyst86purple Try to increase your salary. 3800 in IT is too low, especially in Munich.
Not sure how you managed to make your friends pay for your apartment. But usually living is like at least 7x that.
Not sure how you managed to make your friends pay for your apartment. But usually living is like at least 7x that.
amethyst86purple
New member
@kayleeavani 3800 netto is considered low? I think it’s pretty good for my yoe. I was offered even 85k base at another startup but I chose to play the long game by joining a company that has prestige, anyways I’ll be at 85k in a few months so it should be fine.
@amethyst86purple I don't know what everyone is smoking. Maybe germany is THAT different from Belgium/netherlands, but 3800 net is about 1000 higher than what most people earn around here at 40
amethyst86purple
New member
kayleeavani
New member
@amethyst86purple Well ofc it depends highly on what you do, qualifications etc. But you live in a city where you have to pay 2k /month for rent, so you should add that to your salary if they require you to be there.
85k is decent for IT but you will be able to get it in other cities as well.
85k is decent for IT but you will be able to get it in other cities as well.
paulotarsus
New member
@amethyst86purple Yes it’s unusually low but without knowing exactly what you do it’s hard to speculate, I guess it’s good for a junior position, but if you are mid to senior you should be in the 6 digit club in Germany.
2k for a house rent in that city isn’t going to be a house for you if you want children, this would bring it closer to 3k (even more in a couple of years) rent for about 140m2, which is just enough room for a max of 2 kids if you want privacy and a bit of space. Add a car to that equation to transport kids around and suddenly you won’t be able to save or invest. Hope your company has a good career path progression, ask your senior colleagues what kind of salary to expect, it’s a question people regret not asking out of discomfort but it’s crucial for your industry since rates and salaries are a bit all over the place.
2k for a house rent in that city isn’t going to be a house for you if you want children, this would bring it closer to 3k (even more in a couple of years) rent for about 140m2, which is just enough room for a max of 2 kids if you want privacy and a bit of space. Add a car to that equation to transport kids around and suddenly you won’t be able to save or invest. Hope your company has a good career path progression, ask your senior colleagues what kind of salary to expect, it’s a question people regret not asking out of discomfort but it’s crucial for your industry since rates and salaries are a bit all over the place.