Need a smart short/medium-term ETF plan

speedboatchase

Hey guys. I opened an account with Degiro recently and I plan on putting around 90% of my savings (around 45k) into it. I have no debt or dependants. Will be starting a new job in a couple of months that would allow me to put around 3k into the Degiro account every month. I live abroad and have done for a few years, so my plan is to (hopefully) work in the new job for at least the next two years, 3 maximum, before moving back.

I recently read The Global Expatriate's Guide to Investing (as suggested by a poster here) and despite some great tips for a beginner like me, to be honest, it was more suited to readers who are putting their money into pensions. My focus is to maximise my current savings to have the highest possible deposit for a future home, because I work in the media and will never achieve close to my current earnings whenever I move back. Therefore I want to make sure the deposit is as high as it can be to ensure I'm not limited by the 3.5x gross salary borrowing rules.

Long story short, what would people here recommend? I like the relative stability of ETFs such as VOO, but again, that seems a lot more suited to long-term saving. Considering my circumstances and goals, am I leaving myself open to much riskier options?

Nody

Honestly your time range is to short for ETFs, look for fixed term savings accounts or similar.

topper_harley2

With three year time frame, forget investing. Deposit accounts only.

speedboatchase

Nody wrote: »

Honestly your time range is to short for ETFs, look for fixed term savings accounts or similar.

Problem with that for me though is that in the case of my Irish bank (Ulster Bank), the fact that I'm a non-resident means I can't apply.

EDIT: The interest from the medium fixed term deposit of Ulster Bank, even if I could apply, is 2.10% for the maximum of 36 months, with DIRT rate of 41%. So were I to transfer my 45k, I would end up with (correct me if my maths are wrong here) 945eur - 387 (DIRT) = 558. Really doesn't seem worth it. I'll shop around and do a bit more research in general.

Nody

Well you should have local banks where you work now; alternatively you can look for a larger European bank who may open an account for you.

daveirl

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TheFin

I buy ETFs and am in my 50's. I guess people are worried about stock market fluctuations impacting on a short to medium term investor. http://www.fool.com/investing/general/2015/12/31/best-etfs-for-2016.aspx.

speedboatchase

daveirl wrote: »

This post has been deleted.

Yeah, I understand. The fixed term account just doesn't seem worth it at all to me at this point. I'll try research an ETF strategy that works for me, and if I lost everything I'll never mention it on here :pac:

Nody

speedboatchase wrote: »

Yeah, I understand. The fixed term account just doesn't seem worth it at all to me at this point. I'll try research an ETF strategy that works for me, and if I lost everything I'll never mention it on here :pac:

Well if you're going to take risk look at something like Global X Superdividend (SDIV) or similar; you're not in it for the long haul so a high dividend based fund is probably your best bet but you'll take a gamble no matter what.

ixus

There was . Similar question asked in "banking & insurance" forum last week. Check out "25 and making money. Where do I even start? "

I would be careful about having 90% of your money allocated as so. Search Corzine italian bonds. Also, what happened after Swiss currency peg was removed.

speedboatchase

speedboatchase wrote: »

Hey guys. I opened an account with Degiro recently and I plan on putting around 90% of my savings (around 45k) into it. I have no debt or dependants. Will be starting a new job in a couple of months that would allow me to put around 3k into the Degiro account every month. I live abroad and have done for a few years, so my plan is to (hopefully) work in the new job for at least the next two years, 3 maximum, before moving back...........

As others have mentioned 2/3 years is very short, even with the "relative stability of ETFs such as VOO" you'd be speculating over a 2/3 year term.

If you have €45k now and can add a further €3k/month over the next 2 years that'll be €117k risk free accumulated in deposit accounts. Not worth risking not having that in 2 years time to hope to add €10/€15k to it.

If I had a gun to my head now and needed to suggest a diversified ish investment strategy.....
given that you intend coming back to Ireland in 2/3 years time and the current strength of the US$ to the € I would see all US ETFs as untouchable.

The UK£ is quite weak now (after the 2015 surge) though so the likes of the FTSE100 does appeal, it's back to where it was 3 years ago. I'd expect an investment in a FTSE100 EFT made now to be quite safe as investments go.

If I was you I'd throw €10/€20k into that and put the balance of the €45k and all the future €3k/months in risk free options.

lcwill

Plenty of banks let non-residents open savings accounts and they are easy to open online.

Most will also pay your interest gross without deducting DIRT if you are tax resident abroad (at least KBC does for me) and then you are responsible for declaring and paying any tax due where you are resident. You just have to fill in one extra form - non resident DIRT exemption declaration or something like that.

As others suggest the best way to build you house deposit is to save hard and keep your money safe. Over a 2-3 year period you are as likely to lose money in stocks as make money - I wouldn't risk it.