1Yr·

Investment strategy Ü65 - Your help

Moin dear #community,

for some time I have been concerned with the investments of my father (65), who will retire next year.

According to his generation, he has without a clear strategy a wild portfolio of #einzelaktien and very expensive #fonds of all kinds heaped together on the recommendation of third parties. We have sold a part of it in the last months, so that now we have #cash in the amount of approx. 100k has become free.💸

Since I am not at all familiar with investment strategies in this age bracket, I wanted to ask for your input.

As a retiree, how would you invest the freed up cash?

My thoughts on different classes are as follows:

Stocks/#etf: Possibly currently overheated and at his age you have to consider the holding period. But a part could perhaps be put into a distributing ETF or individual #dividendenaktie give (?)
#anleihen: Don't know much about this, but could be relevant as we sold the expensive blend funds and he no longer has lower risk bonds in the portfolio. With more rate hikes expected, bonds could go down further. Maybe a bond ETF savings plan (?) is worthwhile.
Time Deposit (6-12 months): The only recommendation I could give him in good conscience
Other #immobilie: Don't think he wants to go through the stress again in his old age....

PS on his current investment portfolio : With home and two apartments, most of the assets are in real estate. 50-70k are currently invested in individual stocks/stock ETF, the rest is - as mentioned - cash.

Looking forward to your input! <3

#strategy
#rentner
#help

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51 Comments

Sparfuchs@Reinecke

1Yr

As a pensioner, he has already "provided for" the rest is a bonus. I would also consume the money - travel now where there is time and the body still plays along.

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1Yr

@KleinviehmachtMist yes that would be the easiest, but does not correspond to his "lifestyle", he is not so fond of travel and consumption :)

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Marco@Einsteiger

1Yr

@KleinviehmachtMist those who do not consume anything at working times will not consume anything later.

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Deleted User

1Yr

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Sparfuchs@Reinecke

1Yr

@Mauromar The civil servant's coat is short, but it's warm. My grandparents come to over 7000 euros net. According to grandpa, it's just enough, because everything is getting more expensive 🙄.

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Enrique@Dividenden_Monteur

1Yr

@Mauromar Pension and annuity are two different pairs of shoes in DE

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1Yr

@KleinviehmachtMist should not politically / economically everything go down the drain, he has certainly provided for :) He can count in Hesse with 65-70% of the service pay, so around the 2-2.5k. In addition, he is a freelance musician, which he will certainly still follow a few years and earn something in addition

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1Yr

First, I would clarify his goals in a personal conversation with him. Is the pension really enough (as some commentators here assume without reason) or does he need money here and there because of rent and/or grandchildren? Would he like to support you in the purchase of a property? Investing for prospective retirees is based on completely different conditions and should be made dependent on this if necessary. There are many possible strategies such as: - Dividend strategy with high yield focus: Here you invest primarily in stocks and dividend stocks with high stability and corresponding dividend yield. Dividend ETF strategy: I myself strictly reject this concept, but there are individual cases where this can fit. You put a certain part of your money into e.g. the High Dividend Yield and enjoy the regular dividends. These are two classics. There are other options depending on the retiree's objectives and vision. No investment advice. No solicitation to buy sell financial products. Only my opinion.

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Sparfuchs@Reinecke

1Yr

@BASS-T The question was how would you invest the money you had freed up as a retiree. There was never any talk of a pension.

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1Yr

@BASS-T
Why do you compare pure value stocks (substance stocks with dividend payouts) on the one hand with growth stocks (growth stocks with dividend payouts) in two asset classes? And then, with the justification of lower risk, you naturally decide in favor of individual stocks instead of ETFs. You can't compare two different asset classes with a completely different content of companies 🤨

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1Yr

@KleinviehmachtMist Do not really understand your SOS on my contribution. Some people's pensions won't be enough, and I think it's wrong to advise blanket consumption without this information. That in advance.

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1Yr

@General_T_Regnery Growth stocks were not directly addressed. At best, they are included in the High Dividend and weighted differently in terms of risk via diversification. Ultimately, these are just examples; sound investment advice may only be available from a fee-based advisor. With so much money 💰I would rather invest something in professional advice. No investment advice

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Sparfuchs@Reinecke

1Yr

@BASS-T that is slaving around. We are talking about a retiree in an owner-occupied home. He has an additional passive income in the form of 2 condominiums. Plus 50k-70k in individual stocks and 100k in cash. That does not sound like poverty in old age.

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1Yr

@KleinviehmachtMist And that's your argument to squander?

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Sparfuchs@Reinecke

1Yr

@BASS-T a very selective reading comprehension.

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1Yr

@BASS-T We have already thought about this and in the end it will be a matter of avoiding that the money is eaten up by inflation, i.e. to at least "beat" it. In my opinion, it would also be wrong to take greater risks, since at that age one must of course always expect a stroke of fate (sudden illness and care, etc.). Due to the pension and (low) rental income, he is financially well secured, he does not pay rent himself and, to my knowledge, has no other financial obligations (e.g. loans). A real estate project is not pending, but at some point the renovation of the home will be necessary, especially in terms of energy efficiency (heat pumps, insulation of the roof, etc.). But until then, years will pass, during which inflation will eat its way through... if he tackles this at all during his lifetime.

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Kevin E.@KevinE

1Yr

@McZed If the rental income is low, is it worth selling the property and replacing the rental income with dividends?

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1Yr

@KevinC if you look at it purely rationally, that could be the case, but he is also emotionally attached to the apartments and already has a hard time realizing individual stock losses... a professional investment advisor would really have to bring him to that :)

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1Yr

Chris Vermeulen has recently published a book called "Asset Revesting", which recommends this strategy especially for retirees, especially because of the good return at very low drawdown. But this is an active strategy.

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1Yr

It depends very much on what your father still plans to do. Does he want to 1. use up the capital, 2. put it aside for a good nursing home or 3. bequeath it to his children? Case 1: Money market ETF - currently yields approx. 4%pa. $XEON And just gradually sell. case 2: 50% money market, 20% gold, 30% $VWRL. With this he should get at least a little bit of return for the next 10-20 years without taking big risks. Case 3: 100% $VWRL Is not a big deal, but better than failed self-management. The heirs can then decide for themselves what to do with it. Otherwise: Note the danger of giving advice on money matters. If it goes wrong, the family blessing can quickly be gone.

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Christoph@ChrisBizz

1Yr

@Epi Question please: How does this money market ETF work? Is the interest distributed or generated by the price gain?

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1Yr

@ChrisBizz Ws have two variants: the accumulator $XEON and the distributor $XEOD. The profit basically results from the investment of the amount of money held with the ECB overnight, which pays its key interest rates on it.

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Christoph@ChrisBizz

1Yr

@Epi Dankeschön 👍

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1Yr

@Epi thanks for the detailed comment! He would like to beat inflation with relatively little risk, in order to be able to fall back on the money in the case of an emergency (nursing home) or - if this does not occur - to be able to bequeath us something. But even until the "nursing" case, of course, many years could pass. Fortunately, he and my mother are in good health :) He will only use it up if he wants to renovate his home at some point (heat pump, energy efficiency), but he does not see the need (yet) in his lifetime. Otherwise, both live quite frugally. I had once informed me on the subject of money market ETF, but it is not yet fully understood. One invests once and then sells it - and why? From bond or time deposit you personally think nothing? Thank you! :)

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1Yr

@McZed Beating inflation is quite sporty at 7% inflation. Since your father is not building his capital but managing it, he has to or can do things differently than a 30 year old. For example, he could go into high yield corp bond ETFs, high div ETFs, treasuries, inflation protected bunds. There are many good options that make little sense for wealth accumulation, why sell a money market ETF? You need the money, don't get good interest rates anymore, have a better investment, etc... Time deposits are okay too, but are inflexible and yield less than a money market ETF. Graduated time deposit is possibly a solution. Bonds are also okay, but sometimes quite complex and in case of need you have to hold until maturity and then reinvest again. In the end, a diverse mix of different interest-bearing investments should be a good solution for your father's needs.

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1Yr

@Epi thank you! Is the money market ETF the dividend, price or both linked to the interest rate development? Do not quite understand the construct yet :)

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1Yr

@McZed Money market ETFs do not pay dividends, only equity ETFs do that. With money market ETFs, there is basically prime rate/365 credited every day. Xeon accumulates the credit, xeod distributes it.

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1Yr

@Epi how sensitive is such an ETF in terms of demand? If, for example, it is now foreseeable that the interest rate peak has been exceeded and many investors begin to withdraw their money, I could imagine that the price will fall sharply above average at this point (?) Even if the interest rate still brings good returns

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1Yr

@McZed The ETF has been around for a while. You could see how it reacted when interest rates fell: normal. What could happen? When investors withdraw their money, the outstanding shares fall accordingly. That's just how ETFs work. But as far as all the exceptional cases are concerned, I'm honestly not the right person to talk to. You'd have to look at the ETF's documentation.

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DerMartin@DerMartin

1Yr

It strikes me that you yourself say that you are not at all familiar with an "investment strategy for the over 65s", but that you sold everything right away. In my eyes, that doesn't add up. If it were my father, I would go with him to his bank and let him get advice. It avoids a lot of unnecessary hassle.

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1Yr

@DerMartin As far as "house bank" you had me 😂 I would rather prefer a tax advisor or fee consultant, but otherwise: Full agreement✅

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Deleted User

1Yr

Comment was deleted

1Yr

@DerMartin Thanks for the tip! Then I had worded it wrong. Of course we did not sell everything, but what were obviously not good investments. Most importantly, we realized losses that had been in the portfolio for years (Nokia..) and sold a fund that was focused on bonds, had over 1% TER, and had only losses for the last 5 years.

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1Yr

@BASS-T Just out of curiosity, is any tax advisor familiar with asset management? That would probably be the cheaper option compared to a fee-based advisor, right?

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Kevin E.@KevinE

1Yr

@PremiumSparkassler my grandparents were talked into a pension fund (which invested in shipping companies). They were 78 and 76. It was supposed to bring them higher pensions after 10 years... my father was able to revise it (with a 10k loss after 3 weeks).

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1Yr

I would advise to consume it. Who knows how old your father will be. With the stock portfolio and the real estate he should not suffer from old-age poverty. Or rather advise nothing at all.

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1Yr

@NiMe he is very thrifty, I could not convince him of that :) He would rather hoard it under the pillow and bequeath it to his children someday.

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Tabularasa@Tabularasa

1Yr

@McZed I see it the same way... Travel and enjoy life money in a call money account,... probably he still has income from the individual shares and rental income.

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crypto_next_fiat@crypto_next_fiat

1Yr

50% bonds and 50% low votality dividend Etf of course distributing.

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1Yr

@crypto_next_fiat out of interest - why would you give up fixed-term deposits? Because some bonds offer a higher coupon? :)

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crypto_next_fiat@crypto_next_fiat

1Yr

@McZed Of course, you can also make time deposits at the moment. This is rather a general solution independent of the current interest rate policy of the central banks

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AI@Alpaca-Invest

1Yr

Why not just go to the bank advisor and get advice. It does not always have to be the ETF , stocks and bonds. You talk about expensive funds. 1% TER is perfectly fine ? Maybe a mixed investment of 6 or 7 years time deposit + floater + ETF or active fund on dividend Title ?

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1Yr

@Alpaca-Invest An independent investment advisor would really be a good idea. Regarding the fund: It was so defensive that it did not even earn the TER for 5 years in a row. In addition, the complexity is too high, he is not at all familiar with the subject, so he does not know what is in this fund at all, in which a large part of his pension is. There are certainly many better performing investment alternatives.

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daddyinvestiert@daddyinvestiert

1Yr

My mother will retire in about 10 years. We have divided it up for her like this: 50% call money with a current interest rate of 3% 50%. $VWRL

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1Yr

As is well known, the last shirt has no pockets. I myself invest in order to either buy a foreign property with my pension or to spend it on my head. With regard to inheritance, I would consider transferring parts now in order to exhaust the ten-year period (after 10 years, pre-gifts do not count towards inheritance). If he has money like hay and consumption is already covered, I think a reinvestment in dividend-bearing securities would make sense.

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Deleted User

1Yr

Comment was deleted

1Yr

@Mauromar would you say that also makes sense if he does not want to take big risks with the money anyway and "only" beat inflation? Financially he is well provided for :)

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Deleted User

1Yr

Comment was deleted

1Yr

@Mauromar this might be a bit in-depth - but are there any "quality criteria" to be considered for financial planners besides independence? If you know about it :)

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Deleted User

1Yr

Comment was deleted

1Yr

@PremiumSparkassler stupid question(s), but is the bond coupon automatically reinvested, distributed or does it work quite differently with bonds? And do bond ETFs all have a coupon or does it depend?

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