15H·

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 %) Call money ETF. Div. 1.9%

15% $TDIV (+0,27 %) VanEck Divi Leaders. Div 3.5%

10% $TRET (+0,75 %) Global Real Estate. Div. 3.7%

7,5% $VHYL (+0,77 %) Allworld High Div Yi. Div 3.1%

7,5% $PEH (+0,88 %) FTSE RAFI EM. Div 3.9%

5% $EWG2 (-0,41 %) Gold

5% $SEDY (+1,27 %) iShares EM Dividend. Div 8.0%

5% $JEGP (+0,22 %) JPM Global Equity Inc Div 7.1%

5% $EEI (-2,71 %) WisTree Europ Equity Inc Div 6.3%

5% $IHYG (+0,19 %) High Yield Bond. Div 6.1%

5% $EXXW (+1,13 %) 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 %) Overnight ETF. Div 1.9%

12% $EQQQ (+1,43 %) Nasdaq100 ETF. Div 0.4%

5% $EWG2 (-0,41 %) Gold

2% $O (+0,45 %) Realty Income 6.0%

2% $VICI (+0,71 %) Vici Properties 5.6%

2% $OHI (+0,81 %) Omega Healthcare 7.2%

2% $PLD (+0,55 %) Prologis 4.1%

2% $ALV (+0,97 %) Allianz 4.35%

2% $HNR1 (+0,61 %) Hannover Re 3.4%

2% $D05 (-0,05 %) DBS Group 5.5%

2% $ARCC (+1,22 %) Ares Capital 9.3

2% $6301 (+0,95 %) Komatsu. 4,2%

2% $1 (+0,94 %) CK Hutchison 4.6%

2% $AENA (+0,02 %) AENA. 4,2%

2% $LOG (+0,36 %) Logista 7.3%

1,5% $AIR (+0,63 %) Airbus 1.8%

1,5% $DHL (+0,58 %) DHL Group 4.8%

1,5% $8001 (-0,47 %) Itochu 2.8%

2% $RIO (-1,13 %) RioTinto plc 6.4%

2% $LIN (+0,05 %) Linde 1.3%

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

3,5% $BATS (+3,06 %) BAT 7.0%

2% $KO (+0,71 %) Coca Cola 2.9

2% $HEN (+1,38 %) Henkel 3.0%

2% $KVUE (+0,95 %) Kenvue 4.1%

2% $ITX (+0,83 %) Inditex 3.6%

2% $MCD (-0,15 %) McDonalds 2.6%

2% $690D (-0,01 %) Haier Smart Home 5.6

3,5% $IBE (+0,23 %) Iberdrola. 4,1%

1,5% $AWK (+0,06 %) American Water Works 4.4%

1,5% $SHEL (+0,24 %) Shell 4.1%

1,5% $ENB (+0,66 %) Enbridge 6.5%

2% $DTE (-0,11 %) Deutsche Telekom 2.8%

2% $VZ (+0,27 %) Verizon 6.8%

2% $GSK (-0,17 %) GlaxoSmithKline 4.2

2% $AMGN (+0,64 %) Amgen 3.5%

2% $JNJ (+0,71 %) 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?

45 Commentaires

Stonksonlygoup@SOGO

15H

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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Erzwo@FYBSTRD

15H

Far too complicated, max. 3 ETFs, selected so that dividends flow every month. Alternatively a World ETF, keep it simple

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Metis@Metis

15H

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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Johnny B.@JBatelli

15H

@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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Metis@Metis

15H

@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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Kai@Dividenden-Sammler

15H

@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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ThemenmitKopf@topicswithhead

12H

@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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Uwe@SchlaubiSchlumpf

10H

@topicswithhead this!!!

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ThemenmitKopf@topicswithhead

10H

@SchlaubiSchlumpf if he needs help he can get in touch

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Uwe@SchlaubiSchlumpf

10H

@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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Maverick@Pete_Mitchell

15H

I can only agree with that. Why make it so complicated when it's much easier with 3-4 ETFs?

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Dividende > Zinsen@GoDividend

14H

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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Dominik@Dominik_76

14H

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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Johnny B.@JBatelli

13H

@Dominik_76 not bad. Thanks for the idea!

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Dominik@Dominik_76

13H

@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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Thom@Depot_7777

14H

Less is sometimes more

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Bullnbear@Bullnbear

15H

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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nassimcanim@nassimcanim

15H

everything in google or meta bro

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Dividendenopi👴@Dividendenopi

14H

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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SemiGrowth@SemiGrowth

13H

Why not just $TDIV

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Catherine C.@Cat64

15H

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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Nova@Nova_portfolio

15H

High-divident ETF with worldwide exposure for sure

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Rikyzibo@Rikyzibo

15H

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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Nom@user28461

14H

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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Thomas@Thomas_1963

14H

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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Olli@Olli68

13H

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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Daniel@Dr27589

13H

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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Jupp D.@JuppDupp

13H

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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devnerd_daddy@devnerd_daddy

13H

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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Patrick Schäfer@Hotte1909

12H

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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Skymoon@Skymoon86

12H

Put all your money in VHYL if you are after dividends. It is perfectly diversified and simple.

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Olli@Olli68

12H

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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Susanne@Isus01010

11H

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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Uwe@SchlaubiSchlumpf

11H

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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Stephan@Boergieking

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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Patrick Schäfer@Hotte1909

@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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structure@cpfl

Would put everything in $TDIV and add gold if necessary
- no investment advice -

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Testo-Investor@Testo-Investor

12H

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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OJRL@SpArTaKuS1

11H

My humble opinion, leave your parents' money alone, let them put it in deposits, let them live their lives, be very careful with these markets today, it seems very easy but time matters a lot, you know.

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ZeissJessy@ZeissJessy

10H

Saved for later

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