Bogleheads.org

An educated guess:

if you are not fiscally resident in the UK, how could the UK ask you to pay taxes to them or abide to their rules?

In other words, I highly doubt you will have to abide to UK rules BEFORE moving to the UK, especially if the operations have been made in a previous tax year

So
1- If you make an operation on 1 april 2023 (FY2022-2023), and move to UK on 10 April 2023 (FY2023-2024) permanently, I am quite certain you have no bed and breakfasting problem
2- If you make an operation on 7 april 2023, and move to UK on 10 April 2023 permanently, my guess is the same.

However, I am not a tax expert, and I might be wrong on the second case

My allocation is 73% cash (a quarter of it in EUR, the rest in USD) and 27% international stocks (USD ETF). I am currently making no income as I am starting a company in a Eurozone country. In terms of my allocation, I am planning to: - Keep some cash available (30,000-50,000$) at all time (in checking/savings accounts) for the short-term as I have no income - Invest 150k+ (which is slighty over half my total net worth) in USD term deposits on HSBC Expat/Jersey (3.9-4.2% interest rate) for 3-6 months. - Invest the money from the expired time deposit into stocks if the market crashes by then, or extend the term deposit for another 3/6 months or 1 year if the market has not crashed. If I get solid and stable income from my company, I will st...

gavinsiu wrote: ↑Sun Mar 26, 2023 2:51 pm The 4% rule is often cited for estimating how much to save for retirement. However, it’s based on backtesting the us stock market which has higher historical return than the uk return. What would you use to estimate how much to save?

I would actually go on nest egg calculators, like vanguard, put in your expenditure/nest egg assumptions, or go a bit more granular with an excel file.

https://retirementplans.vanguard.com/VG ... ggCalc.jsf

Thanks!

Very useful points

Ireland is very unlikely, luckily.

A takeout from these points you just made is to make sure to add "financial headache" among the criteria when considering options as my next job/country, and consider that anything related to age limits might be pushed further as I get older.

Thanks again, much appreciated!

for LISA and SIPP there are penalties for early withdrawal. I am almost 40 so still 15 years for SIPP and 20 for LISA My plan would be: 1) for SIPP, hope and pray that wherever I will be it is considered a pension given its name has the word pension in it 2) for LISA/ISA. If it is US, sell everything (= invest in cash), and then - buy a basket of single stocks (goodbye simplicity, welcome mess) - or if single stocks are another tax authority headache, attempt transfer to Cash LISA/ISA - or keep it cash (and be sad) 3) if SIPP is not considered a pension wherever I will be, then sell everything, keep it cash (and be sad) until I come back to EU or UK My guess (hope?) is that the big problems would be with the US. I presume most EU countries ...

Thanks for the reply

Yes as a non resident I will not be able to contribute to either ISA or SIPP

And yes, my equity part is Vanguard FTSE global all cap acc.

Happy to hear others' thoughts, if any

Also, is the higher expense ratio of the VWRA of 0.22% worth it compared to the VTI of 0.03%? Using this calculator to understand the cost of the ETF in my investment shows a significant difference in the final cost due to the higher expense ratio https://www.omnicalculator.com/finance/expense-ratio. So does the tax advantage of using a non-US ETF worth it to compensate for the extra cost? Indeed VTI has a very low expense ratio, but even though it isn't earth shattering and besides using an Ireland domiciled ETF you are saving 15% from your dividends that would be grabbed by the US, since Ireland has a US treaty therefore a 15% tax on your dividends in comparison to Costa Rica non treaty of 30% that will indeed offset even more that expen...

Hi all Presume you have savings of many multiples your earnings, and your earnings are tax free below 12000k allowance Presume your Lifetime ISA contributions are maxed out (4k /year), but your ISA are not fully maxed out. Would you - max out SIPP contribution first (only about 3k, but with tax reimbursement, see below), then ISA - max out ISA first, then SIPP - max out ISA, and avoid SIPP - avoid ISA, max out SIPP - avoid both: do nothing at all. Keep saving and invest GIA For reference: 1- without income, the SIPP max contribution is 2880 GBP / year, so it's not much. You still get 720 GBP tax reimbursement, even if your tax was 0. 2- international lifestyle: likelihood is that I will not be a resident of the UK within the next 1-2 years,...

Invest.

Quick one: you do not need money in the next 5 years?
5 years is a bit short, I would expect "I do not need money in the next 20 years"

A short term government bond fund could be Ishares Ultrashort ETF EUR, but you have to tell your base currency actually

WHy is it good to keep bonds?

mostly to limit the fall and avoid you selling in times of stock market.

If you want to maximize return, without considering volatility, then 100% stocks is the way to go.

A silly question OP: at age 22 your best investment is education. I just want to make sure you are not forgoing education to save for retirement. it'd be a terrible mistake.

If you have already studied enough or as much as you can tolerate, then
- maximize employer pension
- maximize Lifetime ISA
- maximize ISA

For all of the three above, the closes your risk tolerance gets you to "100% stock" the better.

For the self invested ones:
- if 100% stock, then vanguard ftse all world
- if 80-20, thenvanguard ftse all world + vanguard global bond aggregate GBP hedged

Best

Hi OP
Buongiorno

Bonds might go down when stocks go down. They are likely to go down less. At the moment both bonds and stocks are responding to interest rates. An almost mathemathical rule for bonds, but not straightforward for stocks.

With that said, there is no other publicly available asset that is as diversified and as uncorrelated with stocks.

I presume you are investing not to buy the apartment in the next couple years, but you are investing for retirement at 65 or so.

If that's the case, you can
1) keep AGGH as proposed
2) put your 20 percent in a conto deposito (make sure it never goes above 100k)

Best

Europe is a continent not a country

Where are you based?

I have been doing further research into the Bank's historical performance on the 60/40 and 80/20 portfolios and can confirm that on a 3yr, 5yr and 10yr basis, it has outperformed LifeStrategy 60 and 80 (GBP) net of fees. I am reminded that what a private bank discretionary portfolio does is not actively stock pick, but in essence, does what LifeStrategy does where your appropriate risk-based AA is split across multiple funds and indexes. I expect that most bogleheads would advise to still go with LifeStrategy over a bank, but the data would suggest otherwise. My understanding is LifeStrategy isn't the best though so hopeful that the suggested 2 or 3 fund strategies have outperformed however I am not sure how to backtest these. Having read ...

1) why 5% IBCI? I think any ETF should be at least 10%, otherwise no difference, it's only complexity. Some people do 50% inflation linked and 50% global aggregate for their bond part, i think that might be something you want to consider vs 100% global aggregate bond. In my model IL is 1/5 of the bond component of the portfolio.. I can raise it it 1/4 (6,25%) but I wouldn’t go over that level. 2) If your issue is that AGGH is dist and not acc, why not VAGF global bond aggregate eur hedged acc? No, AGGH is Acc, but it’s 4 times bigger than VAGF, for the same TER. It helps! The point of my question is: should I have a global bond and pay the hedging costs or should I buy € bonds and not pay the hedging? I would skip the ILBs then. 0%, 5% or ...

1 no. what might be risky is being 100% stocks. so long that you don't sell in a downturn, you're fine.
DO NOT buy us-domiciled ETF/funds, buy ireland domiciled ETFs

2 None. you should consider other ETFs only if you decide that your allocation will include bonds, in that case you'll a broadly diversified global aggregate ETF
3 impossible to answer given the information you shared. make a plan on an excel file or look for vanguard nest egg calculator on the web
4 you will use a UCITS etf like ishares AGGG (USD unhedged) or Vanguarg GLobal aggregate bond index (USD unhedged)

Hello everyone, Following the advices of John Bogle, I decided to create a two fund portfolio (75% equities, 25% bond). My question is about the bond part of the portfolio. I have two options and I would like to know what you thing about it: 1) 100% AGGH, a global aggregate €-hedged. 2) 50% VGEA and 50% XBLC. Since there is no ideal euro aggregate accumulation etf, I would simulate it with this 50% governative and 50% corporate euro bond. I will lose geographical diversification, but I won’t pay the hedging costs. My portfolios would thus be: 1) 75% VWCE, 20% AGGH, 5% IBCI or 1) 75% VWCE, 10% VGEA, 10% XBLC, 5% IBCI …what do you think? Thanks, guys 1) why 5% IBCI? I think any ETF should be at least 10%, otherwise no difference, it's only c...

This is splitting hairs. 12% or 13% in Emerging Markets does not make any difference. (And of course do the MSCI ACWI or FTSE All-World indices actively update their EM weighting....to market weight) If you want to overweight EM, 70%/30% DM/EM starts to make a difference. A 3-fund portfolio is a US-centric concept. If your home country has by far the largest market in the world and the leading currency, it probably makes sense to say 40% Total US stocks/20% International stocks/40% Total US bonds. From a European perspective, it would make more sense to go with say 50% MSCI ACWI or FTSE All-World/10% European stocks/40% Global Aggregate Bond if you definitively want a 3-fund Portfolio. I think just a two-fund portfolio of 80% MSCI ACWI and...

Noskhar wrote: ↑Sun Jan 15, 2023 5:12 pm As others have said I will start investing in a pension fund when I will need a bit of tax reduction, because the total costs of said pension funds are not better than simply investing in a 2-funds portfolio. So I think I will start with investing in VWCE+EUNA(same as AGGH) and when I'll need some tax reduction I'll start a pension fund.
Thank you all again for all the info you gave me.

Thank you for feeding back your plans. very sensible and helpful for us and others alike

OP is right

not eays to buy individual EU bonds on IBKR, there's no access

can't say why, and can't talk for Saxo

Depends on the broker though!

If you are based in Italy or UK you could use Finecobank as broker and access to EU individual bonds is very easy

If your private bank is calling robotics a "sector," something is badly wrong. Not to mention the bank is, as Nisiprius said, erroneously referring to thematic funds as sector funds, which also casts doubt on the fabulosity of this exclusive, well-heeled bank. To confirm, these were referred to as thematic funds by the bank; it was me the misspoke as I am new to all this terminology. The bank is one of Goldman Sachs, Credit Suisse, HSBC Private, UBS or BNP Paribas, so all pretty well-heeled if you ask me... :wink: They tend to suggest the equity part of the portfolio is made up approx 80% a regular global equity mix, and the remainder in these thematic funds to try and bring additional upside, but at additional risk, of course. H...

I would also simplify your current allocation to

55% global stock SSAC
45% global bond (pick your own UCITS)

which is your original stock - bond allocation, with 10% of gold divided into 5% to stock and 5% to bonds


I'd pass on gold, but if you want to add it, either 5% (better) or 10% gold, so be it, probably take it off the stocks.

Final note: at your age you might want to consider having more stocks

Ciao! Prima di tutto condoglianze. Then on what I would do... 1) sell all and divide the proceeds, then invest the proceeds in your portfolio as usual 2) However, if there is a property that is simple to manage, and you are happy being a property manager, you could consider keep that and buy out brother(s) 3) emotions do have a value that may increase your willingness to keep a property as described above... but don't overvalue them either: managing a rental property is work. I think if you plan to stay in a place, and buy the house you'll live in, an investment in a property in the same country or vicinity is a terrible idea as it concentrates risks I would never keep the property and manage it with brothers, almost a certain headache over...

galeno wrote: ↑Sat Jan 14, 2023 12:34 pm To be honest I'd like to sell 30% of our VWRD and put the procedes into WSML, VDEM, IAU. 10% each.

More small caps. More China and India. Some gold.

I probably should just go and eat some icecream.

Cheez-It Guy wrote: ↑ Chinese + Gold?

Nah.

Take the ice cream and leave the rest

I should add one of the main attractions of BTL is a steady income from a property plus growth in equity value from repayment of mortgage. This is the tricky bit that I was thinking. Currently maintaining the same amount of mortage, it will be a loss after paying tax over the rental income. Which means, income * ( 1 - tax_rate ) - mortgage_amount * mortage_rate will be negative. However, it is possible to put more money in in order to make it positive: to reduce the 'mortgage_amount' from the equation above. I can't quite work out what this means in terms of the 'return' of the money we've invested into the property in this way. As if I put money in, this extra money is also effectively generating 5-6%. So it sounds like a good idea? "...

Few points: 1- In addition to the net loss, you also are losing because your equity money is not working as it should (i.e., opportunity cost) 2- supply of housing in UK seem to be kept artificially low 3- demographics and population are steadily +2% per year... so if you weather this then maybe the price will go up enough in the long term. That long term forecast for population growth is way too high? I would say 1% is a much more realistic figure for the long run. This is an aging society. Countries like Australia and Canada are quite attractive to young people - especially in the healthcare field. The 500k immigrants figure you read is distorted - the ONS counts students, most of whom return to their home country. The UK university syst...

I think you should do the opposite. As you are young you benefit a lot if you invest in stock as soon as and as much is possible, then after some years thanks to the so called “compound interest” your investment grow for years. Later on when your salary grow thanks to a good career and the taxation % grow as well with the grow of the income you could invest as well the 5164 euro to decrease the taxation pressure. It's actually not a bad way of thinking, as of now I am under an apprenticeship contract, so I have a very favorable taxation (around 6-9%), based on that, unless I change job earlier, for another two years it's not really that important to reduce taxation. Out of apprenticeship it becomes 27%. Is it worth though opening a pension...

Hi there, I have a btl property with about 205k mortgage, whose fixed-rate interest period is going to finish soon. We also have a mortage for the house we live in, which is also going to end its fixed rate period within 2 years. Since the interest rate is so high at the moment, once we remortage for the btl, we will not get any profit, but rather a loss of a few hundreds a month. So I've being weighing the pros and cons on a few possible options: 1. Sell the btl once the fixed-rate period ends - Pro: no need to worry about the extra mortage and interest on it - Con: it may not be the best time to sell 2. Keep the btl, but put more money into it, to make the mortgage payment less - Pro: we still have the flat, and the price may go up in th...

BTL=buy to let

Mortgages for people who buy a house / flat to then rent it out (let it out) are different than people buying a house and then living in it

Thank you again for all your answers. For what I understands: I should start with a pension fund until I can max out the €5164 per year for tax deduction When I can save more than that I should start with the stock/bond split investments in etfs (with the exact percentages decided when I will start investing in those) I see you're choosing to buy on italian markets. Why? I thought was better to stay on my local market, but logically there are more benefits on choosing a more traded etf on other european markets so you are probably right to find an etf with more volume on another market. About PIR I am not so convinced. First because of risk, I think it's a lot higher considering 70% must be on italian companies or european ones with a stab...

When I say that "you don't need to save for your pension", I just want to politely say that it is simply impossible because 33% of your gross income goes to INPS or some other OICR (Casse Previdenziali Professionali) and if you are an employee 6.91% of your gross income (TFR) goes to INPS or to some pension fund, thus by default you are saving 40% of your gross income for retirement, on average 35% of your gross income goes in taxes and you are left with 25% of your income to housing and consumption. That is why italians should focus on achieving tax discount first and then have to worry about return. Expenditure expectations, expected age of retirement and risk profiles don't fit to italian economy. Yes, healthcare privatization...

Hi Italian Fella! You are italian (me too) so 33% of your labour income goes to INPS or some other Cassa Previdenziale, you don't need to save for your pension. You are italian so your income is heavily taxed, so you must try to achieve some tax deductions, two ways to do that: 1) Join some pension fund for max 5600€ per year (+ TFR if you are an employee). 2) Wait until March and look at some PIR (they are private markets long term investment plans), they are costly as [offensive language removed by admin LadyGeek] BUT you don't pay taxes on the revenue. Have a nice 2023. Oh apologies, another important point: I disagree on "you don't need to save for your pension". This would entirely depend on 1- your expenditure expectations ...

Noskhar wrote: ↑Mon Jan 02, 2023 5:24 am Thank you everyone, for all your answers.
I think I will do:

• 90% VWCE

• 10% AGGH

both accumulating for tax purposes and both traded on the italian market.
For the bonds I'm opting for the iShares one instead of the Vanguard because it has a bigger fund size and is a little less volatile and I think it's a bit safer, but correct me if I'm wrong.
As for the platform I think i'll use Degiro for the the lower transaction fees, since I don't mind doing my taxes

all good here! except the point I made on my previous post. are you limiting yourself to italian market or am i missing something?

Hi Italian Fella! You are italian (me too) so 33% of your labour income goes to INPS or some other Cassa Previdenziale, you don't need to save for your pension. You are italian so your income is heavily taxed, so you must try to achieve some tax deductions, two ways to do that: 1) Join some pension fund for max 5600€ per year (+ TFR if you are an employee). 2) Wait until March and look at some PIR (they are private markets long term investment plans), they are costly as [offensive language removed by admin LadyGeek] BUT you don't pay taxes on the revenue. Have a nice 2023. 1) I think the amount is 5164 EUR, but whatever it is, yes 2) I am not sure I agree on PIR. at least 70% has to be invested in FTSE MIB / similar italian index. I would ...

Ciao a tutti 1) 90% FTSE all world and 10% AGGH sounds great 2) Fineco works perfectly for me. If in later years you want to buy some Italian bonds or have a bond ladder should your bond allocation go up, then FIneco is perfect. I also earn/spend in different currencies so Fineco multicurrency account is great Had IWBank in the past and it was ok but Fineco seems way better. It is for traders, so occasionally you'll receive the email advertising some course on how to do technical analysis and stuff like that: just ignore it. 3) However, fineco is 2-3 EUR per transaction, and no fee for holding ETFs - although I am a UK resident so that may change things, and I think Degiro lets you buy Vanguard Ftse all world for free, which is pretty aweso...

Hi OP

VUSA is not hedged, you can see that easily (and you can also choose any other SP 500 ETF)

We are presuming that your base currency is the USD, given that you want to buy USD denominated: in such case, the EUR-USD fluctuations will be zeroed at the end of the holding period

see here: https://www.bogleheads.org/wiki/Non-US_ ... currencies

Hi OP

You are aware that ETF denominated in EUR actually owns underlying assets in USD?

So you can buy VUSA which is in EUR, and you're actually purchasing it in USD

Hi
I use finecobank and there's 0 platform fee for ETFs

For your other question, I suggest opening another thread to get more replies

Short answer: after you maxed your LISA, you definitely want to have S&S ISA and/or SIPP. if you pay 40% income tax, a SIPP is particularly a good deal

Thanks jg12345 for your answers I have another question raised from your answers. So then you say that for something like my example of a house in 2033, it's better to use either CD's or single bonds, but what about bond funds? I've been reading that although you cannot control the maturity of them, each bond fund has an average maturity date that you could use as a minimum to withdraw from it if you need it. How much is better to have a single bond than a bond fund? Or is it OK if you match the estimated time with the average maturity date of a bond fund? Another question is, is there any recommended tool around here to know how much to invest in order to get approximately to the amount that you may want, I have that doubt since if I want...

Oh OK! So actually this is what we have in Italy. We must pay 10% of our icome, and our employee the 23%, to the government, which will "probably" give a public pension at age 70, only if you contributed for so many years (20 is the minumum for a full time position). As americans how do you see this? I've heard people in italy stopped believing on this I've heard people in Italy stopped believing on this: say more? I remember self-employed Italian people saying: oh I will never get a pension anyways! sure, depends on how much they've declared and how much contributions they've paid for those employed by companies, if they say "I will never get a pension" they might be referring to a possible default of the Italian gover...

Immediately buy them back -- tax gain harvesting. If you have losses, make sure to prevent a wash sale. This is to make sure all gains are taxable in the US and the cost-basis is reset. Wait until you are physically present in the UK, update your domicile with IBKR (or, if needed, open a new IBKR account and transfer over the assets) I can see two possible issues with this though somebody with UK experience would know more. The first is that the UK has rules against selling and rebuying shares within 30 days and can disregard this maneuver even if it happens before becoming a resident. I don't the details on the lookback window only enough to point out the issue. The second concern I would have is if there is anything similar to the US PFI...

I think it might be cheaper (vs a Wise transfer) to

- open a Wise bank account once in UK, multicurrency
- transfer USD to USD
- then change USD to GBP

Similar thing is with FinecoBank multicurrency bank account in UK (open. transfer USD. do currency exchange)

I regularly change USD to GBP and USD to EUR. For some reason, for USD to EUR, wise is better, and for USD to GBP, fineco is better. The differences are marginal, but over 1m US$ it can get to quite some money

Hi 1- For a house, you'd need to have a separate pot, invested ideally in anything with duration that matches or is shorter than when you'll need the money. So for example, if you need the money in 10y, a single high quality inflation linked bond with maturity in 2033 may do the trick, if it exists. Or otherwise CDs ladders - I have never seen CDs for 10y, you could do 5y, 4y, 3y, 2y, 1y, and then renew as they expire. 2- you can definitely DCA every 3 months, or even 6 months. Obviously the longer the period the longer your money stays out of the market. if 3 months is ok given the amounts and commissions involved, it's perfect. 3- For example If I want to save for a big travel with my friends or family, do I just take that money from what...

Some thoughts: if you want less volatility, you have to accept less growth. The way to do that should be to increase your allocation to bonds, rather than looking for equity sub-sectors with higher sharpe ratios. Such strategy will always be flawed, to some extent, by some of the points you made (the time period). Especially if you are worried about sequence risk, factor investing (e.g., a tilt to value, similar to high dividend) requires more than 10 years, which might not be a good idea for you. What I mean is in some way a reply to "What are you missing?". I think there are papers showing that depending on the 20 year period selected, the increased sharpe ratio (vs market weight) driven by factors substantially falls. so for e...

Some thoughts: 1- I think a global inflation linked EUR hedged works better than US TIPS ETF, and breaking down your bond allocation in 50% inflation linked and 50% global bond aggregate is something that others on this forum do. Note that your global aggregate bond has already some ILB - this does not affect your allocation, but I just wanted to make sure you're aware. There's also an xtracker global inflation linked EUR hedged bond ETF if you need another option (don't remember the TER, sorry) 2- Others have pointed out that EUR hedging is an explicit choice. For AGGH, there's plenty of resources stating that it makes sense. For global inflation linked, I think there was a discussion a while ago on that and you might want to look for that...

Some thoughts: if you want less volatility, you have to accept less growth. The way to do that should be to increase your allocation to bonds, rather than looking for equity sub-sectors with higher sharpe ratios. Such strategy will always be flawed, to some extent, by some of the points you made (the time period). Especially if you are worried about sequence risk, factor investing (e.g., a tilt to value, similar to high dividend) requires more than 10 years, which might not be a good idea for you. What I mean is in some way a reply to "What are you missing?". I think there are papers showing that depending on the 20 year period selected, the increased sharpe ratio (vs market weight) driven by factors substantially falls. so for ex...

Hi OP,
I use FinecoBank, an Italian online bank. it is available to Italy and UK residents only though, AFAIK.

Individual bonds are easily available there.

I did not check on IBKR

Some ISINs of bond indexed to eurozone inflation:

FR0011427848 maturity in 2024
IT0005329344 maturity 2023
IT0005004426 maturity 2024

You should look for BTP EI for italian bonds indexed to eurozone inflation, or BEI for the french ones

there's also plenty BTP italia indexed to italy inflation, but I doubt you're interested in that

I have not checked countries other than FR, IT, DE - I'm sure there'll be more

We have been looking for the above, but find that almost all of them have duration of 8-8.5. We would like shorter. There are Euro hedged TIPS with duration of 2.4, but of course then the link is to US inflation. A compromise could be UBS ETF (LU) Bloomberg Euro Inflation Linked 1-10 UCITS (link below), with a average remaining maturity of about 5. Strangely the documents linked below does not say anything about duration, real or nominal yield*). I am willing to believe duration is pretty close to average remaining maturity, but do I just have to believe that (real) yield is about the same as the longer ETFs as the countries and proportions are similar, and yield curves are pretty flat? https://www.ubs.com/li/en/asset-management/etf-instit...

Hi OP
A usual good practice is to look on google first.

So I searched "Italy bond with maturity in November 2023", the first link is this: https://uk.investing.com/rates-bonds/it0004848435 and it shows the ISIN of a zero coupon bond with maturity 1st November 2023

Same thing for Germany and spain (Germany bond with maturity in November 2023 - just change the name)

https://cbonds.com/bonds/44683/

https://www.investing.com/rates-bonds/s ... 1-oct-2023

all these links show ISINs