2Wk·

Parents receive inheritance

Hello everyone!

My parents are in the process of selling my grandparents' house. It will probably fetch around €275,000. My parents will soon both be 60 years old.

They had initially considered buying another property nearby. But they have moved away again. The lack of flexibility and the time and risk involved with tenants put them off.


I also told them more about investing in the stock market. They were very open and interested, even though they said they had an unfounded fear of shares etc.


Now my question to you. What is the best way to invest the money? I think dividends would be very nice as my parents like the passive income like from a property. But it should also be very well diversified across countries and sectors.


I personally have developed 2 solutions. You can give your opinion as to whether you think the solutions are good or, of course, if you have completely different ideas.


1. the ETF solution

15% $XEOD (+0.02%) Call money ETF. Div. 1.9%

15% $TDIV (+1.85%) VanEck Divi Leaders. Div 3.5%

10% $TRET (-0.05%) Global Real Estate. Div. 3.7%

7,5% $VHYL (+1.45%) Allworld High Div Yi. Div 3.1%

7,5% $PEH (+0.79%) FTSE RAFI EM. Div 3.9%

5% $EWG2 (-1.24%) Gold

5% $SEDY (+0.81%) iShares EM Dividend. Div 8.0%

5% $JEGP (+0.46%) JPM Global Equity Inc Div 7.1%

5% $EEI (+1.4%) WisTree Europ Equity Inc Div 6.3%

5% $IHYG (+0.17%) High Yield Bond. Div 6.1%

5% $EXXW (+0.94%) AsiaPac Select Div50 Div 5.5%

15% Rest German Divi Shares approx. div 2.5%


=100% with 3.7% dividend.


275k ×3,7% = 10.175€

With full taxation 27.99% = 7327€

On average per month: 610€ dividend

With 2k tax-free allowance: 657€ dividend per month


I find it very well diversified, you have overnight money, you have the USA and Europe well represented, but also 12.5% emerging markets ETF. In terms of sectors, finance will be at the forefront. Followed by real estate and energy. I think that's fine.


2. the equity solution


I have selected 34 strong dividend stocks. In the list they are roughly divided into GICS sectors.


15% $XEOD (+0.02%) Overnight ETF. Div 1.9%

12% $EQQQ (+0.22%) Nasdaq100 ETF. Div 0.4%

5% $EWG2 (-1.24%) Gold


2% $O (-0.14%) Realty Income 6.0%

2% $VICI (+0.28%) Vici Properties 5.6%

2% $OHI (+0.85%) Omega Healthcare 7.2%

2% $PLD (+1.73%) Prologis 4.1%


2% $ALV (+2.12%) Allianz 4.35%

2% $HNR1 (+1.87%) Hannover Re 3.4%

2% $D05 (+1.47%) DBS Group 5.5%

2% $ARCC (+0.61%) Ares Capital 9.3


2% $6301 (+6.83%) Komatsu. 4,2%

2% $1 (+1.28%) CK Hutchison 4.6%

2% $AENA (+1.06%) AENA. 4,2%

2% $LOG (+0.55%) Logista 7.3%

1,5% $AIR (+2.51%) Airbus 1.8%

1,5% $DHL (+4.41%) DHL Group 4.8%

1,5% $8001 (+3.97%) Itochu 2.8%


2% $RIO (-0.1%) RioTinto plc 6.4%

2% $LIN (-1.44%) Linde 1.3%

2% $ADN (+0%) Acadian Timber 6.7%


3,5% $BATS (+0.06%) BAT 7.0%

2% $KO (-0.95%) Coca Cola 2.9

2% $HEN (+1.87%) Henkel 3.0%

2% $KVUE (-0.82%) Kenvue 4.1%


2% $ITX (+3.48%) Inditex 3.6%

2% $MCD (-0.95%) McDonalds 2.6%

2% $690D (+1.21%) Haier Smart Home 5.6


3,5% $IBE (-2.87%) Iberdrola. 4,1%

1,5% $AWK (-2.25%) American Water Works 4.4%


1,5% $SHEL (+1.57%) Shell 4.1%

1,5% $ENB (+0.91%) Enbridge 6.5%


2% $DTE (+1.67%) Deutsche Telekom 2.8%

2% $VZ (-0.57%) Verizon 6.8%


2% $GSK (+2.31%) GlaxoSmithKline 4.2

2% $AMGN (+0.61%) Amgen 3.5%

2% $JNJ (+0.48%) Johnson&Johnson 3.5%


= 100% with 3.5% dividend


275k ×3,5% = 9625€

With full taxation 27.99% = 6930€

On average per month: 577€ dividend

With 2k tax-free allowance: 624€ dividend per month


I also think this solution is cool because you can select the largest companies or strong dividend payers in the individual sectors or countries yourself. And of course you can also select shares with which you have a connection. However, I have focused on shares from the USA, England and Germany because of the withholding tax. Spain is also well represented because of my parents' ties to this country. It's also cool that the NasdaqETF also includes the Microsoft, Amazon, etc. compounders.


What do you think?

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61 Comments

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I think this is a good approach in itself, but I would make the whole thing much leaner. If you rely on ETFs, 1-2 are enough, that's already diversified enough. Possibly add other assets such as gold, but that's not a must. In my opinion, individual shares are too much effort etc. if your parents have little experience.
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Far too complicated, max. 3 ETFs, selected so that dividends flow every month. Alternatively a World ETF, keep it simple
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What are the arguments against a simplified ETF solution? A distributing AllWorld, for example?

Surely your parents want/need to "manage" this themselves, I assume?
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@Metis For example, I think the payout ratio of a $VWRL is too low and I don't think it's very well diversified either, because there's a lot of tech and the USA in it. As my parents are already in the withdrawal phase, I also wanted to forego a bit of return and reduce the risk by spreading it across several sectors and countries.
That's right, they should manage most of it themselves later on or ideally just let it run.
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@JBatelli Well, I don't think the high dividend version is wrong for your purpose either, and you've already listed it, but I don't know if you're not overburdening your parents a bit with so many products. You can also reduce the US share by adding a Europe and/or Asia ETF, for example.
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@JBatelli For a dividend solution with a global ETF, you have the wrong one. Yours focuses on growth. The $VHYL is more suitable. And as a combination a $TDIV or similar. And yes, I agree with the previous speaker - far too many ETFs - a typical example of how you can make things too complicated.
And another tip - it's best not to make investment recommendations within the family or to good friends. Trouble is inevitable. Especially if you don't have the knowledge or only half-knowledge.
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@JBatelli I would actually say that you are thinking too much like a young person. If your parents are around 60, I wouldn't bet so heavily on shares (assuming money is to be distributed). Apart from that, you want to use too many securities. Go for bonds, stocks, gold and equities. I would only use call money if you need liquidity. At under 2%, it's only worth keeping a nest egg on the side. 50% equities, 10% equities, 10% gold, 10% call money and 20% bonds. Don't even bet on individual shares with family members. I can only recommend this, as you don't get into a fight afterwards.
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@SchlaubiSchlumpf if he needs help he can get in touch
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@topicswithhead if he wants to. I think the proposal is a good ideal line. 50% equities is quite comfortable if you are not prepared for the volatility. REITs are somewhat less volatile, even if they can certainly build up negatively with equities in crises. Gold should have a slightly positive effect. 10% overnight money makes part of the assets quickly accessible and dampens vola. 20% bonds - I assume this means short-term government bonds with the highest credit rating in your own currency - are only safer overnight money.
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I can only agree with that. Why make it so complicated when it's much easier with 3-4 ETFs?
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You have created a selection without first defining a target, "except dividends would be nice".
I can only advise you to reconsider everything.
First define the goal ->then see how you can achieve it with which products.
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Dr. Kommer has a book for all situations in life, I can recommend "Souverän investieren vor und im Ruhestand", so that you understand what you are getting yourself into. Precisely because there are reservations, the topic of loss version and risk-bearing capacity should be thoroughly considered beforehand.
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@Dominik_76 not bad. Thanks for the idea!
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@JBatelli Of course, but there will be a new edition soon. If you have an Audible subscription, you can listen to the current edition for free. Just for your information.
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All in XRP? No, joking aside 🤭

If you are aiming for 3-4% dividends, you could also "safely" put something into this bond ETF, for example, always park my cash here - it is available as a distributing & accumulating $ERNX

No matter how you do it, as already mentioned here, make it leaner.
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Less is sometimes more
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everything in google or meta bro
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I agree with @GoDividend. Your parents should make it clear in advance what their expectations of an investment are. I am the same age as your parents and I can imagine that they would not be averse to investing a portion in call money. It's not a big hit, but at least BBVA, for example, offers a guaranteed 3% on call money (current account) for 12 months, see my post a week ago. Bonus certificates and quarterly distributing certificates with a buffer also yield a relatively safe 6 to 9%, depending on which share they are based on. As an idea to take a partially conservative approach
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What you/they should think about: Your parents' early inheritance to you. Then you can manage it in peace and there will be no problems with tax allowances and taxes if the inheritance is transferred later (possibly through other assets/immos). Of course, only the portion that would exceed your parents' tax-free allowance anyway can be taken into account.

Apart from that: As already written: too complex, too much effort
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25% EUR-hedged world ETF
25% $TDIV
25% hi-div EURO Stoxx ETF (e.g. $EUHD )
15% gold ETF
10% Nasdaq and/or Bitcoin
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@Olli68 Why hedge? Hedging is usually not worthwhile and reduces returns.
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@GAR1986 Are you just throwing that out there or can you back it up with figures?
Since we are not milkmaids, let's just compare Invesco's hedged Nasdaq100 (EQEU) with its unfair sister ETF (EQAC):

5 yr: EQEU 43.56% (vs EQAC 47.30%)
3 Y: EQEU 79.01% (compared to EQAC 72.39%)
1 yr: EQEU 14.69% (compared to EQAC 10.18%)
YTD: EQEU 8.77% (compared to EQAC -2.23%)
In CHF, the CHF-hedged $EQCH (which I have) even beat the unhedged $EQAC in the 5Y.

Of course, if one assumes that the dollar will recover in the coming months and years, hedging is superfluous. I just don't see any signs of that.

- no investment advice -
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Then take a look at this sample portfolio, maybe that's an idea too: https://extraetf.com/de/etf-portfolio/jeden-monat-ausschuettungen?tab=dividends
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Why not just $TDIV
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So the second option would be too complicated for your parents. So many individual titles....
I would keep it simple. Distributing World as a basis with another 40% in two or three other ETF's. 10% gold/silver and another 10% in whatever you fancy. It would look something like this.
40% $VWRL
25% $TDIV
10% $IEMA
10% $DE000EWG0LD1
5% $JEPQ
5% $BTC
5% individual titles if you feel like it. Maybe they have some preferences, such as they like to travel with Aida or love I Phones....
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Invest 50% immediately in a world ETF and park 50% of the money and buy MASSIVE Bitcoin next year in the bear market!!!! You're making it way too complex....
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Saved for later
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Would put everything in $TDIV and add gold if necessary
- no investment advice -
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@cpfl will have a strong exposure to financial services (~44%). In the next banking crisis, it could be really crushed. I would add it at most.
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I have now gone down with my idea of fewer ETFs anyway and will then simply take the $TDIV and $VWRL in almost equal parts alongside gold and call money. This will balance out the 60% USA from the AllWorld and the 43% financials from the VanEck.
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@JBatelli sounds good
Sounds complicated to manage going forwards. How about one global all cap etf distributing fund instead? eg.VWRL is available in the UK, not sure about Germany
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High-divident ETF with worldwide exposure for sure
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If they want something easier and with "less risk" I would consider a Vanguard Life Strategy, 60% equity. The dividend is lower, but it is something easier to understand for someone who never invested. Personally, it works for my parents
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You could just let them invest 260k in the VanEck and they'll get an extra monthly income of just under €1000 before tax $TDIV
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Not bad, but too many positions for me. I have similar plans for old age. My final stock should look like this:

40% $VWRL
20% $ISPA
20% $TDIV
10% $EUHD
10% $4GLD
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How about simply 1/3 each:

$FTWG
$HMWO
$IWLE

World ETFs only, dividends every month.

They are 60 years old, which means there are still about 7 years left to make additional savings and achieve more growth. If the dividends are not enough at some point, you can still sell selectively. In my opinion, this makes more sense than sacrificing total return through special divi ETFs.
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@devnerd_daddy Most of those who are financially able to do so do not work until they are 67. Mostly either the financially very successful people (professors, entrepreneurs, managers, doctors, etc.) work long hours - and then again those who "have to".

The middle class (and I count OP's parents among them) are happier to spend a few more healthy years with money if possible than to plow through to the last day.

Not a judgment, but personal experience of my parents' generation. My father worked until March (standard retirement age of 66+ x months) and was the only one of my parents' circle of friends who was still working after 65. Most of them found ways between 58 and 62... (illness / burn-out, early retirement, severance pay, reduction to regular part-time work, lifetime working time account, partial retirement,... younameit).
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@KevinE No, I don't think so. The proceeds from the family home aren't that great and the plans somehow don't sound like stopping early. But I could be wrong. I have to say, though, that my father is a freelancer and still does everything at 70 😅
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@devnerd_daddy I know plenty of people like that too. But they tend to be the higher earners or those who wouldn't be able to make ends meet without a job. Of course, 275k is not the world and allows for a life of luxury. But if they didn't have that thanks to their inheritance, they would have got by somehow.

And there are enough people who a) simply die in their 50s and 60s or b) are so limited in health that expenses would have to be discounted in the future.

At 60, you can often still move well and you can still do a lot physically. At 70, the odds are already worse, and at 80, many things can no longer be done at all.

Of course, if work is your purpose in life, you shouldn't stop. It can also be a source of energy.

But for most people - in my personal experience - it's not.

There have been lots of surveys about how many people have already mentally quit, are unhappy in their job or would quit as soon as they win the lottery. In most cases, this figure settles at around 75-90%.

The remaining 10-25% work out of intrinsic motivation. At least that's my interpretation. Admittedly, there isn't too much science behind it; there are rarely any real papers that classify the surveys accordingly.
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Put all your money in VHYL if you are after dividends. It is perfectly diversified and simple.
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The most important thing in such a case is to keep the currency risk as low as possible. If investments are made worldwide or in the USA, use hedged ETFs if possible. Currency fluctuations are usually long-term.
At the age of 20 or 30, you may not care. Not so much closer to retirement age.
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Distributing world ETF and enter in tranches. There's no telling how you will react when things really go down for the first time. Only experience will help and it will certainly remain volatile for the time being. If your parents are doing well with it, add more.

That's basically the worst thing that can happen. That they panic and sell at the worst possible time.

I would give gold a low priority at the current prices. If they are absolutely convinced of this, it is of course justified.
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Too complicated for someone without any knowledge of the stock market, who is already suspicious of the whole thing. And about the high dividend etfs: it feels like they burn a lot of money, sometimes paying out so much that the share price falls. The result: you pay capital gains tax on your own capital.

I would do it differently. Either simply a distributing world, possibly dampening the vola with short-dated government bonds with a high credit rating (or call money ETF, but I would take accumulating).


The background:
From my point of view, I only have good dividend stocks? If they experience price gains and dividend increases over the long term that at least keep pace with inflation. Otherwise I make losses.
This is not the case with many dividend stocks. The World should do well in the long term.

If I expect my equity ETFs to rise roughly in line with inflation, my safety component should too. Since the payout of overnight etfs (or similar) is usually in line with inflation, I might as well let the interest accumulate.

Normally, I would always advise etfs. As I'm not at all convinced by the ones you mentioned, I would tend towards the equity variant.

Personally, I would prefer a $SPYI or similar. This could then pay out dividends (if necessary).

Personally, I would even prefer partial sales. It makes you more flexible if you need more or less than is distributed.

You won't get as much money each year, but parents won't fall into the trap of having less and less money each year.
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What I miss when I skim through the comments is the keyword bonds. As you get older, you generally move away from shares and towards bonds or something else. I would invest 50% of the money in an accumulating or distributing etf (world, Europe, small caps) and the rest in bonds of large companies, meta, google, Amazon, coca cola, SAP, etc.
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@Boergieking I left this out of my comment because TR actually only offers junk bonds and usually no good bonds can be traded through the banks. Since it should be as simple as possible, I assumed that you want to have a simple custody account and not 5 different ones with different providers. But in general I agree with you that bonds from large companies are relatively safe for old age.
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It would also be too complicated for me if I hadn't dealt with it before and suddenly I'm faced with a huge pile of work.

1x All World, maybe 1x high dividend and that's it.

Or just 3x $BTC and when your parents retire in 5-7 years, all your worries will be history.

That's how I would do it ;)

Take 1-2 ETFs, it's absolutely worry-free and easy to manage.
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