[DE] Advice on starting investing

[unshaven]

Hello, after reading this sub for a year, I finally decided to start investing (the waiting has probably cost me!).

I’m a 33yo Czech citizen, working in IT in Berlin. I got lucky being able to live relatively inexpensively biking or walking everywhere, paying just around 500E rent, might go on a 1kE vacation every year and eat out frequently (but it’s cheap around here). I also have rather cheap hobbies like reading, programming, internet, bars, and parties. My parents are financially secure, living in their own house.

The longterm goal is probably to buy an apartment here, but I’m a couple of years away from even paying the downpayment, so I have time to think about that.

My plan is to invest 20k EUR in the beginning and then 1-1.2k once a month using Degiro.

I’d like an ETF with as low fees as possible, accumulating, mostly developed markets (although MSCI ACWI IMI would be ideal).

For its extra low fees “iShares Core MSCI World UCITS ETF” seems the best (as explained by

https://www.reddit.com/r/eupersonalfinance/comments/bm3oki/_/emtxr39

).

“Your age in bonds” seemed like good advice, but I have trouble choosing one.

E.g. this ”Vanguard EUR Eurozone Government Bond UCITS ETF” doesn’t seem to have grown much since inception, is that standard?

Do you see anything out of place or have any kind of advice?

 

[livewell12257]

@unshaven I wouldn't invest directly 20k, begin with 1k once a month, check how you feel and how much you make, invested when you are more or less confident.

Indexed funds are to keep for lot of years, it's very probable that a drop in the markets occurs in the next 1 to 24 months so I wouldn't invest all the bucket in the market directly.

Remember "Cash is king"

A diversified portafolio its also important, take a look to the iShares Cores stocks, it doesn't look diversified to me. With 20 k you could invest very efficiently directly in stocks, so it's another option, even you could buy some real state like parking lots, storage rooms, ... I don't know the market on Berlin or Czech Republic but If you could find a 7 % return rate it could be interesting.

And please, let me know if there is any good IT position good paid in Berlin for a computer engineer

 

[unshaven]

@livewell12257 Thanks. Yes, the advice to start slower and see how it feels definitely resonates with me.

I didn't wanna think of a market drop too much as it's unpredictable and anything I'd do about it would be basically speculation, the very thing I wanna avoid by investing to ETFs. But I guess I shouldn't have all my money in EUR to diversify.

Regarding Berlin, it pays much less than e.g. US, around 60-70k EUR for a senior frontend, backend or full-stack devs, but the living expenses very cheap.

 

[evietheturtle]

@livewell12257

Remember "Cash is king"

In a crash that affects both stocks and bonds yes... otherwise it's a way of letting inflation eat your money.

I wouldn't invest directly 20k, begin with 1k once a month

This has just psychological reasons. Statistically it's better to invest everything you can and want to invest as soon as possible. (google "vanguard lump sum" for more info)

 

[unshaven]

@evietheturtle

(google "vanguard lump sum" for more info)

Thanks for that article, I didn't consider the market downturn immediately after investing a lump sum. I'll spread it over several months, starting with 2.5k a month and later invest my monthly target.