Large Lump Sum and in my 30's .. How to invest in Ireland?

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BogleIreland
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Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by BogleIreland » Tue Jan 09, 2018 8:09 am

Hi,


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 am Irish, in my early 30's and returning to Ireland to live after living abroad for a number of years.

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 of 5% growth yearly
- average dividends of 1.5% per year = ~ 23k per year before tax
- average dividends could vary +/- 50% with usd>eur forex and index fluctuations
- dividends taxed at ~20% I will be in the lowest tax bracket in ireland
- 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 investment (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 in Ireland
- 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 and better return on bonds with accumulation even with the 8yr disposal)


4) Purchase small personal property
- a house for life (hopefully)
- avail of some of the 14k a year tax free rent a room program



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 while resident in Ireland?


Thanks.

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Tyler Aspect
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by Tyler Aspect » Wed Jan 10, 2018 10:54 pm

BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
Hi,


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 am Irish, in my early 30's and returning to Ireland to live after living abroad for a number of years.

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 of 5% growth yearly
- average dividends of 1.5% per year = ~ 23k per year before tax
- average dividends could vary +/- 50% with usd>eur forex and index fluctuations
- dividends taxed at ~20% I will be in the lowest tax bracket in ireland
- 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 investment (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 in Ireland
- 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 and better return on bonds with accumulation even with the 8yr disposal)


4) Purchase small personal property
- a house for life (hopefully)
- avail of some of the 14k a year tax free rent a room program



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 while resident in Ireland?


Thanks.
I would caution against buying a rental property. Similar to buying individual stocks, a single property can be risky.

1200k in world stock index and 950k in world bond ETF would be safer.
Past result does not predict future performance. Mentioned investments may lose money. Contents are presented "AS IS" and any implied suitability for a particular purpose are disclaimed.

TedSwippet
Posts: 1839
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by TedSwippet » Thu Jan 11, 2018 8:10 am

Welcome.

Not a comprehensive reply, but I'll just pick up on a couple of points in your post, some relating to US tax.

You may or may not know that Ireland has some odd local tax 'wrinkles' for Irish residents that can mean that holding US domiciled ETFs and funds is more tax efficient than holding the equivalent UCITS ones. This is contrary to the general case for non-US investors.
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
1) Invest 1.5m lump sum into in into Vanguard US World Index ETF
... - invest after the next contraction/recession
How will know when 'after' has arrived? It is pretty much impossible to call a bottom on any recession, correction, or market dip.
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- expect average of 5% growth yearly
Is your 5% estimate here for real or for nominal growth?
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- dividends taxed at ~20% I will be in the lowest tax bracket in ireland
You will pay 15% to the US in tax on dividends received from US domiciled ETFs. This is the US/Ireland treaty rate for dividends. I assume that you will be able to take a credit for this against your Ireland 20% rate, leaving you just 5% due to Ireland, but you should probably check for yourself to be certain.
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- Degiro account will be based in the Netherlands, so will not have to pay US Estate Tax
Just to be clear, using a non-US broker does not in itself provide much protection from US estate tax, if any. What should, in your case, is the US/Ireland estate tax treaty. Note however that protection starts to fail once your global assets exceed the US estate tax exemption for US citizens. (That point is probably some way off at the moment, though.)
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- negatives : forex fluctuations on dividends
Perhaps not the bugbear it seems. Your dividends received should be effectively the same as if you owned a non-US domciled (perhaps UCITS) ETF holding the same assets but denominated in and paying out dividends in EUR. The dividends received by the fund are subject to currency fluctuations with respect to the countries of the stock it holds, but the ETF's denomination and trading currency are for convenience only.

BogleIreland
Posts: 4
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by BogleIreland » Sat Jan 13, 2018 2:51 pm

TedSwippet wrote:
Thu Jan 11, 2018 8:10 am
Welcome.

Not a comprehensive reply, but I'll just pick up on a couple of points in your post, some relating to US tax.

You may or may not know that Ireland has some odd local tax 'wrinkles' for Irish residents that can mean that holding US domiciled ETFs and funds is more tax efficient than holding the equivalent UCITS ones. This is contrary to the general case for non-US investors.
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
1) Invest 1.5m lump sum into in into Vanguard US World Index ETF
... - invest after the next contraction/recession
How will know when 'after' has arrived? It is pretty much impossible to call a bottom on any recession, correction, or market dip.
I was going to use an SP 500 MACD monthly crossover as signal to purchase

I have used FireCalc and some research from Star Capital, and it appears your probability of portfolio's long term success from constant withdrawals increases dramatically when initial investment is made when stocks are at lower valuations / CAPE. (Low (=cheap) valuations were historically followed by higher long-term return)

https://www.starcapital.de/en/research/ ... in-charts/
TedSwippet wrote:
Thu Jan 11, 2018 8:10 am
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- expect average of 5% growth yearly
Is your 5% estimate here for real or for nominal growth?
Just taught it was a conservative average figure for stock/bond return into the future?
TedSwippet wrote:
Thu Jan 11, 2018 8:10 am
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- dividends taxed at ~20% I will be in the lowest tax bracket in ireland
You will pay 15% to the US in tax on dividends received from US domiciled ETFs. This is the US/Ireland treaty rate for dividends. I assume that you will be able to take a credit for this against your Ireland 20% rate, leaving you just 5% due to Ireland, but you should probably check for yourself to be certain.
Yes - 15% can be credited against the 20% .. leaving 5% to pay in Ireland
TedSwippet wrote:
Thu Jan 11, 2018 8:10 am
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- Degiro account will be based in the Netherlands, so will not have to pay US Estate Tax
Just to be clear, using a non-US broker does not in itself provide much protection from US estate tax, if any. What should, in your case, is the US/Ireland estate tax treaty. Note however that protection starts to fail once your global assets exceed the US estate tax exemption for US citizens. (That point is probably some way off at the moment, though.)
It has been mentioned on many Irish forums, that US estate tax only applys to products purchased through nominee accounts domiciled in America (like interactive brokers). So if I purchase etf's through non-american broker, estate tax would not apply?
TedSwippet wrote:
Thu Jan 11, 2018 8:10 am
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- negatives : forex fluctuations on dividends
Perhaps not the bugbear it seems. Your dividends received should be effectively the same as if you owned a non-US domciled (perhaps UCITS) ETF holding the same assets but denominated in and paying out dividends in EUR. The dividends received by the fund are subject to currency fluctuations with respect to the countries of the stock it holds, but the ETF's denomination and trading currency are for convenience only.
Great point .. so the overall value should be the same regardless of the ETF denomination .. dividends from US denominated world ETF converted to EUR would be same as EURO denominated world ETF (as long as you convert the dividends to euro soon after they are received)

Would this be the same for an US stock market focused ETF (that doesn't have as much exposure to Euro revenue)?
i.e US ETF, domiciled in US, dividends in USD converted to EUR = US ETF, domiciled in Europe, dividends in EUR

If that is the case .. then it might be better to invest the rental property 500k into world etf rather then purchase rental property.

Do you have any views on this? Would I be better/safer to receive fixed income from a rental property located near the city center rather then rely on dividends to pay expenses.

Thanks for your input.

BogleIreland
Posts: 4
Joined: Tue Jan 09, 2018 8:00 am

Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by BogleIreland » Sat Jan 13, 2018 3:08 pm

TedSwippet wrote:
Thu Jan 11, 2018 8:10 am
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- Degiro account will be based in the Netherlands, so will not have to pay US Estate Tax
Just to be clear, using a non-US broker does not in itself provide much protection from US estate tax, if any. What should, in your case, is the US/Ireland estate tax treaty. Note however that protection starts to fail once your global assets exceed the US estate tax exemption for US citizens. (That point is probably some way off at the moment, though.)
Link to discussion on US estate tax on a Irish forum :

https://www.askaboutmoney.com/threads/b ... es.191697/

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in_reality
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by in_reality » Sat Jan 13, 2018 10:23 pm

BogleIreland wrote:
Sat Jan 13, 2018 3:08 pm
TedSwippet wrote:
Thu Jan 11, 2018 8:10 am
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- Degiro account will be based in the Netherlands, so will not have to pay US Estate Tax
Just to be clear, using a non-US broker does not in itself provide much protection from US estate tax, if any. What should, in your case, is the US/Ireland estate tax treaty. Note however that protection starts to fail once your global assets exceed the US estate tax exemption for US citizens. (That point is probably some way off at the moment, though.)
Link to discussion on US estate tax on a Irish forum :

https://www.askaboutmoney.com/threads/b ... es.191697/
My family left Ireland generations before my being born so obviously I know nothing about the current estate tax treaty, but it appears to me that you will be liable for inheritance tax on amounts over the $60,000 NRA exclusion. The forum discussion from your link may be right that holding at an non-US broker means they may not enforce that. A US broker would likely require an IRS statement saying your estate is free from tax when it is reported a death has occurred before they would release the money to heirs.

TedSwippet in general is more knowledgeable on things like this, so treat my advice perhaps deriving from suspect sources.

http://ohanlontax.ie/downloads/USFederalEstateTax.pdf
Other persons come within the charge to US tax if they
hold assets located in the US (such as shares in US
multinationals) with a value of US$60,000 or more. In
recent years an increasing number of Irish estates have
had to deal with US Estate Tax simply because the
deceased held US shares, either because he worked for
a US company and received employee shares, or
because a US company was regarded as a good
investment. In many such cases the deceased would
have been unaware of any US tax exposure.
Ireland and the United States have a Double Taxation
Agreement (“DTA”) which is one of the older
agreements, having come into force just over 60 years
ago (on 20 December 1951). The DTA covers
inheritance tax (but does not apply to gift tax), and it
covers US Federal Estate Tax. It does not apply to any
estate tax that may be levied by individual States in the
US.
Under the DTA the taxable status of an asset depends
on its location (or situs). If an asset is located in Ireland it
is primarily taxable in Ireland, and the US will give a
credit for the Irish tax paid on that asset. If the asset is
located in the United States then tax will be primarily
payable in the US and the Irish Revenue will allow a
credit for the US tax paid.
The DTA contains a
specialised set of rules to determine the situs of assets,
and the taxing rights of Ireland and the US.
So I think you would be liable for US tax and then try to claim it back from Irish Revenue. As I am not an expert here, my advice again is suspect, but my worry would be that Ireland doesn't give a credit for US estate tax paid. The reason is that Ireland taxes the recipient and so it wouldn't be double taxation for the estate of the deceased to pay taxes to the US and the beneficiary to pay tax to Ireland. Thus, the estate could receive credit for US taxes paid but wouldn't have Irish taxes to offset and the beneficiary would have Irish taxes but not have paid US estate tax.

I can find a similar conclusion to what is above at http://www.kplaw.com/pub/docs/2017%20Un ... e%20US.pdf
IRELAND
If you are a domiciliary of Ireland, not a U.S. citizen, and do not
live in the U.S., the treaty applies to you as follows:
You will be taxed by the U.S. upon transfers by bequest of the
following assets:
• Real (immovable) property located in the U.S. (reduced by
the value of any mortgages on such property).
• Tangible movable property located in the U.S.
• Negotiable promissory notes from a U.S. person or legal
entity.
• Shares in a U.S. corporation.
• Ships and aircraft registered in the U.S.
• Goodwill of a business carried on in the U.S.
• Patents, trademarks and designs registered in the U.S.
• Copyrights licensed in the U.S.
• Rights or causes of action arising in the U.S.70
The treaty does not address U.S. estate tax on property not
included in this list. As such, you will be taxed by the U.S. upon
transfer by bequest on property not included in this list in the same
manner as a non-citizen not domiciled in the U.S.
I don't see a reason to think you will get the US citizen/resident exemption level.

So the questions to me is will your non-US broker enforce this? Would the beneficiary get a tax credit?

As for real estate, it seems more attractive to me than bonds but I have never managed it so should't really comment.

Waiting for a downturn to purchase stocks doesn't seem viable. We could simply have years of low returns for valuations to come down. I personally can't predict a time to buy other than now. International valuations aren't as high so you do get some balance. I encourage you to look for the real estate threads. There are probably some here who have had success in it and retain the enthusiasm and know-how. They might not appear in a "Ireland" thread though.

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in_reality
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by in_reality » Sat Jan 13, 2018 10:40 pm

And just a little more about my concern that you'd be liable to both the US (tax on estate) and Ireland (tax to beneficiary)...

Irish Tax and Customs state:
Ireland can only tax property that is located abroad if the person giving the inheritance is domiciled in Ireland, or is not resident in the USA. Within these rules, beneficiaries resident in Ireland do not have to pay tax on foreign property.
I take that to mean Ireland can tax your foreign property if you are domiciled in Ireland when it passes to a beneficiary, but not if you are a resident in the US. I could be mistaken though.

https://www.revenue.ie/en/gains-gifts-a ... f-usa.aspx

TedSwippet
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by TedSwippet » Sun Jan 14, 2018 4:53 am

in_reality wrote:
Sat Jan 13, 2018 10:23 pm
My family left Ireland generations before my being born so obviously I know nothing about the current estate tax treaty, but it appears to me that you will be liable for inheritance tax on amounts over the $60,000 NRA exclusion. ...
Well, you may be right. Thanks for digging around further.

Ireland has an old estate tax treaty with the US, but there is no mention in it of allowing Irish citizens or residents the same exemption as allowed to US citizens and residents. Article IV states:
(1) In determining the amount on which tax is to be computed, permitted deductions shall be allowed in accordance with the law in force in the territory in which the tax is imposed.
but is silent on whether the 'deductions' are NRA or US citizen level because when this treaty was enacted there was only one exemption, $60k, for both citizens and NRAs. The single exemption split into two only much later, and the separate exemptions have now diverged to the point where NRAs get a miserly 0.5% of that permitted to citizens.

Compare to the UK's estate tax treaty with the US, which goes to some length to ensure that UK citizens get a US citizen level exemption (Article 8 para 5).

The IRS's list of estate tax treaties seems to back this up. It lacks the 'PR-UC' (pro-rata unified credit provision) note against Ireland, and Ireland's treaty is 'old', not a great combination. A unfortunate recent page redesign means that you have to scroll the table to see this -- at least, on my laptop -- making it really hard to follow and hiding the 'PR-UC' column from immediate view.

So... tread very carefully here is about all any of us here can offer by the look of things. Non-US brokers are not currently much interested in enforcing US estate tax laws on NRAs and some of the 'nominee' rules might help. But overall this looks somewhat unreliable to me. The ice is certainly much thinner for an Irish citizen than for a UK one. If I were living in Ireland I think I would be pushing my government hard on re-negotiating this treaty.

Just when you think you have a handle on things... sigh.

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in_reality
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by in_reality » Sun Jan 14, 2018 5:33 am

TedSwippet wrote:
Sun Jan 14, 2018 4:53 am
in_reality wrote:
Sat Jan 13, 2018 10:23 pm
My family left Ireland generations before my being born so obviously I know nothing about the current estate tax treaty, but it appears to me that you will be liable for inheritance tax on amounts over the $60,000 NRA exclusion. ...
Well, you may be right. Thanks for digging around further.

...

So... tread very carefully here is about all any of us here can offer by the look of things. Non-US brokers are not currently much interested in enforcing US estate tax laws on NRAs and some of the 'nominee' rules might help. But overall this looks somewhat unreliable to me. The ice is certainly much thinner for an Irish citizen than for a UK one. If I were living in Ireland I think I would be pushing my government hard on re-negotiating this treaty.
Personally, I would just invest in US domiciled funds via the non-US broker as the OP plans. That has a known tax advantage for the dividends. Then, I would watch the situation and not assume the non-US broker isn't going to enforce US laws. So if I got sick, perhaps I would sell and realize the capital gains to ensure no exposure to the estate tax. I'm mean if that didn't happen more often than once every 8 years, I might be better off that way.

In worse case of sudden death, well I am dead. If you have loved ones who will depend on the money, then perhaps you want to figure out a way to ensure you won't face the US estate tax. Trusts and international estate planning gets expensive quickly, and doesn't always have the certainty you would hope for.

Not sure if you can give loved ones the power to trade in your account (perhaps if you get incapacitated), but in that case at least they'd have a chance to liquidate if you went into a coma (or clean you out if you aren't looking). Perhaps you'd need a lawyer for that ... not sure on Irish law.

Or simply face normal Irish taxation and not have to worry about the possible the risk of US Estate tax.

TedSwippet wrote:
Sun Jan 14, 2018 4:53 am
Just when you think you have a handle on things... sigh.
The agreement surprised me too.

InvestInPasta
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by InvestInPasta » Sun Jan 14, 2018 6:08 am

BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- invest after the next contraction/recession
Instead of waiting for the next market crash, I would divide the sum you want to invest into 2-5 slices of the same amount and put them into the market in 2-5 years.
A sort of DCA.
When studying English I am lazier than my portfolio. Feel free to correct my english and investing mistakes.

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in_reality
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by in_reality » Sun Jan 14, 2018 6:39 am

InvestInPasta wrote:
Sun Jan 14, 2018 6:08 am
BogleIreland wrote:
Tue Jan 09, 2018 8:09 am
- invest after the next contraction/recession
Instead of waiting for the next market crash, I would divide the sum you want to invest into 2-5 slices of the same amount and put them into the market in 2-5 years.
A sort of DCA.
Or lump sum into international now and DCA into US. But you'd have to use separate funds.

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BeBH65
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by BeBH65 » Mon Jan 15, 2018 2:18 pm

Hello BogleIreland,


Welcome to this forum.

You have already received a lot of good answers.
Here is some additional/alternative input.

1. Was this lumpsum previously invested? or is is completely new money?
2. Are we talking about 1.5 Million? if yes, then this is likeley a lifechanging event take your time to take any decicions. Be sure to read our wiki article on "lump sum vs DCA"

On this forum we advocate the "boglehead principles" (see wiki) that focus on low cost maximum diversified index funds.
3. The first thing to do is to determine how much risk you need, want and are able to take. Remember even a very diversifeid equity portion can drop 50% and this can even after a number of years not be at the previous level yet.
4. As Bogleheads we do not believe in Market timing. It does not work. Waiting until the next contraction/recession is not a good plan: it might never come, and when will you invest? if the market sankt 30% or 40% or ... And will you have the guts at that time to put your money in the market? It is key that you create an investment plan with the correct balance between equity and stable assets (bonds/savings). Maybe 50/50 could be good for you as a first start for your thought process.
5. Investing your equity in the whole world is good.
6. you have already recieved the correct advise to invest in US-domiciled ETfs. (unfortunately Ireland domiced funds are not good for Irish-domiciled investors)
7. Rental property: I have no real experience - I hear it is a lot of work for little return and a lot of risk (low diversification).
8. For your stable assets you can indeed consider EURO bonds, don't neglect government insured savings accounts.
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence).

BogleIreland
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by BogleIreland » Wed Jan 17, 2018 5:36 pm

Hi BeBH65 .. thanks for your feedback.
BeBH65 wrote:
Mon Jan 15, 2018 2:18 pm
1. Was this lumpsum previously invested? or is is completely new money?

New money ~2.5m eur - not invested before.

...

3. The first thing to do is to determine how much risk you need, want and are able to take. Remember even a very diversifeid equity portion can drop 50% and this can even after a number of years not be at the previous level yet.

What I am looking for is ~55k euro a year to cover living costs for 50 years plus (minimun of ~40k euro a year)

...

4. As Bogleheads we do not believe in Market timing. It does not work. Waiting until the next contraction/recession is not a good plan: it might never come, and when will you invest? if the market sankt 30% or 40% or ... And will you have the guts at that time to put your money in the market? It is key that you create an investment plan with the correct balance between equity and stable assets (bonds/savings). Maybe 50/50 could be good for you as a first start for your thought process.

I understand market timing is not recommended

I was thinking of waiting until the next MACD crossover of the monthly SP 500 chart (seems to be a great value buy signal in the past). Especially since it will be a one time investment in the market (no future installments).

If invested near the top of previous peaks in the sp 500 (high CAPE and MACD overbought crossover) it was on average 3-5 years for value to return to base.

Thanks for the advice "in_reality" .. i think some invested international (ex-us) now maybe the way to go and DCA into US.

Thanks




...

7. Rental property: I have no real experience - I hear it is a lot of work for little return and a lot of risk (low diversification).

The main aim of having a rental property in the portfolio was to provide a more stable yearly income compared to solely relying world ETF dividends.




mixinvest
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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by mixinvest » Tue Feb 13, 2018 3:44 am

BogleIreland wrote:
Tue Jan 09, 2018 8:09 am

1) Invest 1.5m lump sum into in into Vanguard US World Index ETF
First thing to check is if investing in US-based ETFs from Ireland is still a possibility or not
See this thread: viewtopic.php?f=10&t=236163&p=3780003#p3780003

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Re: Large Lump Sum and in my 30's .. How to invest in Ireland?

Post by mixinvest » Fri Feb 16, 2018 1:33 pm

Confirmed!

Email from vanguard
We will not be planning to provide the KID in the future therefore all Irish investors will be limited to the EU based ETF's.
So, your option to invest in US-based ETFs for tax reasons is unfortunately off the table

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