Hi,
I am in my early 30's and returning to Ireland after living abroad for a number of years.
I am hoping to invest for the long term and hopefully live off the investment, if possible.
I have a large lump sum of after tax cash and don't have any investments/debts.
I don't have a pension or any PAYE contributions built up.
Below is a investment plan I was hoping might work .. any suggestions/advice would be great:
( I will eventually be approaching a financial adviser but would like to try and figure out a financial plan by myself and with your help first, if possible )
1) Invest 1.5m lump sum into in into Vanguard US World Index ETF
- invest after the next contraction/recession
- invest and hold for ever (40 + years)
- expect average return of 5% yearly
- average dividends of 1.5% per year = ~ 23k per year before tax
- average dividends could vary +/- 50% with forex and index fluctuations
- dividends taxed at ~20% I will be in the lowest tax bracket
- can sell 1,270 eur of ETF every year tax free (cap gain exemption)
- buy through Degiro (.1% exchange fee and and .02% transaction fee)
- Degiro account will be based in the Netherlands, so will not have to pay US Estate Tax
- long term 50+ years US World ETF investing appears to be the most tax efficient (based on current taxes) especially since I will be living off the dividends in the lowest tax bracket (compared to EU World ETF Accumulating investing)
- negatives : forex fluctuations on dividends
2) Invest 500k in rental property
- expect average return of 5% after fees/expenses
- provides ~ 25k a year fixed income
- provides more stable euro income then World ETF dividends in USD
- purchase new mixed use or commercial unit
- property acts as hedge against inflation
- negatives : active management and time
3) Invest 150k in Euro Denominated World Bond EFT Accumulated (EU Domiciled)
- expect roughly ~2% yield yearly accumulated
- should keep up with inflation over 40+ years
- acts as emergency fund
- acts as hedge against stock declines
- can be used for re-balancing portfolio if needed
- purchase EU Denominated accumulating, so there is reduced forex risk if needed in emergency
- EU tax regime with accumulation and 8 year disposal works out better then US Bond ETF (less forex risk)
4) Purchase small personal property
- a house for life (hopefully)
- avail of some of the 14k a year rent a room
I am hoping to live off the investment plan above :
- roughly ~50k a year before tax (43k after tax - income splitting between spouse)
- income should increase with inflation over 40+ years .. hopefully
- will work part time + avail of rent a room scheme for additional funds
A long post .. sorry .. but would love to hear feedback from experienced investors.
- Is this a good asset allocation?
- Is there a more tax efficient way to invest?
Thanks.
I am in my early 30's and returning to Ireland after living abroad for a number of years.
I am hoping to invest for the long term and hopefully live off the investment, if possible.
I have a large lump sum of after tax cash and don't have any investments/debts.
I don't have a pension or any PAYE contributions built up.
Below is a investment plan I was hoping might work .. any suggestions/advice would be great:
( I will eventually be approaching a financial adviser but would like to try and figure out a financial plan by myself and with your help first, if possible )
1) Invest 1.5m lump sum into in into Vanguard US World Index ETF
- invest after the next contraction/recession
- invest and hold for ever (40 + years)
- expect average return of 5% yearly
- average dividends of 1.5% per year = ~ 23k per year before tax
- average dividends could vary +/- 50% with forex and index fluctuations
- dividends taxed at ~20% I will be in the lowest tax bracket
- can sell 1,270 eur of ETF every year tax free (cap gain exemption)
- buy through Degiro (.1% exchange fee and and .02% transaction fee)
- Degiro account will be based in the Netherlands, so will not have to pay US Estate Tax
- long term 50+ years US World ETF investing appears to be the most tax efficient (based on current taxes) especially since I will be living off the dividends in the lowest tax bracket (compared to EU World ETF Accumulating investing)
- negatives : forex fluctuations on dividends
2) Invest 500k in rental property
- expect average return of 5% after fees/expenses
- provides ~ 25k a year fixed income
- provides more stable euro income then World ETF dividends in USD
- purchase new mixed use or commercial unit
- property acts as hedge against inflation
- negatives : active management and time
3) Invest 150k in Euro Denominated World Bond EFT Accumulated (EU Domiciled)
- expect roughly ~2% yield yearly accumulated
- should keep up with inflation over 40+ years
- acts as emergency fund
- acts as hedge against stock declines
- can be used for re-balancing portfolio if needed
- purchase EU Denominated accumulating, so there is reduced forex risk if needed in emergency
- EU tax regime with accumulation and 8 year disposal works out better then US Bond ETF (less forex risk)
4) Purchase small personal property
- a house for life (hopefully)
- avail of some of the 14k a year rent a room
I am hoping to live off the investment plan above :
- roughly ~50k a year before tax (43k after tax - income splitting between spouse)
- income should increase with inflation over 40+ years .. hopefully
- will work part time + avail of rent a room scheme for additional funds
A long post .. sorry .. but would love to hear feedback from experienced investors.
- Is this a good asset allocation?
- Is there a more tax efficient way to invest?
Thanks.