Non-US Investing • Help on DE/PT (EU) Investment Strategy

Hi everyone. I entered a more financially stable part of my life, and I need to decide on my portfolio for both the short term and the long term.
My profile is as follows:

Age: 30
Tax residence: EU (Germany)
Lifestyle: in DE for the next ~3 years, maybe moving countries (in the EU or Switzerland) until settling in maybe 6 years from now in the EU (Portugal)
Annual net income: 95k
Annual Savings target: 20k (~20%)
Annual yearly expenses (rent+utilities+groceries): 30k
Next year's life goal: travel
2-5 year goal: save for a down payment on a ~400/500k house; e.g.: 80k
(potential) 5-year goal: buy/lease a car (for now public transportation and renting a car serves me perfectly); 30/40k
30 years goal: save in case I want to retire when I’m 60 (maybe optimistic)
Emergency rainy day cash fund: done
Debt: none
Current available funds to save/invest: 55k
Investing experience: none

So what I’m most worried about, apart from my lack of experience, is I’ll only be settling (my tax residence) in a country in 5 years, when I’ll probably have access to more tax advantageous retirement accounts. But I shouldn’t wait until then to start saving specifically for retirement.

So this is what I thought:
Now for the next 5 years:

• Open a type of savings account with 40k and put 835eur more monthly for a total of 90k in 5 years. Some options:
  - Deposit the money in Trade Republic for the fixed 4%
  - Savings Vault in Revolut (https://www.revolut.com/savings-account-vault/)
  - Revolut Flexible Account (https://help.revolut.com/en-LU/help/app ... -accounts/)
• Open an account in IBKR Ireland/IBIE and invest 10k plus 835 more monthly in an asset allocation of 80/20 with (according to Boglebots)
  - 70% IWDA iShares Core MSCI World
  - 10% EIMI iShares Core MSCI EM IMI
  - 20% AGGH/EUNA iShares Core Global Aggregate Bond (EUR Hedged)

In 5 years:

• Find a tax advantageous retirement account in my country of residence and max it out
• save/invest everything else in the IBKR portfolio (maybe rebalancing it to 60/40 or 65/35)

Some question:

• Does this make any sense or I’m thinking all wrong? Is there anything that would be obviously better? / is clearly bad? Especially about the reachability of the house / saving / investment goals.
• If I wanted to e.g buy a car in 5 to 7 years, could I take this from my IBKR investment account or is this bad and I need to decide on this early with time and make a different savings plan for it? Really not sure about this.
• The Revolut Savings Vault is basically an MMF with yields up to 3%, is this safe/the best option for my down payment goal / 5-year window? Safety is very important here. But at least with this savings vault it’s not completely eaten away by inflation... Should I not move it all there? Maybe like 70%?
• I could create this savings vault in dollars for up to 1% more in yields, but I’d need to convert to USD and then back to EUR in 5 years. Is this risky? Euro might be more expensive to buy then.
• For the investment account is IBKR good or e.g. DeGiro would be better for a beginner? In Trade Republic it’s hard to change countries but it would be nice for the flat 4% on deposits
• I’m worried about the tax situation because I’ll only have a fixed country in 5/6 years. Would only using an accumulating portfolio simplify that? (I’d only need to pay taxes when I sold them or changed into a distributing portfolio?)
• Also on the accumulating portfolio, wouldn’t then be better to have a custodian account in DeGiro? (because it’s safer and I wouldn’t pay dividend fees)
• Should I worry about connection fees? Should I make sure my portfolio can all be bought in Ireland? (maybe this is more relevant for DeGiro)
• Is there a possibility I shoot myself in the foot and opening an investment account in a traditional bank eg Deutsche Bank is safer, also tax-wise? Or is there no more inherent safety and I’d just be paying more fees for nothing?

Thank you a lot in advance!

Statistics: Posted by eurwander — Wed Jan 03, 2024 11:58 am — Replies 0 — Views 66

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