I am 35 with no investments. I hope to make up for it by being diligently-bogleheaded.
Country of Residence: Middle Eastern Country (no income or capital gains taxes, similar to UAE). No US Nationality but my wife is a European and American citizen and so is my daughter. My wife files taxes separately in both places. She owns a house that she rents out and a small portfolio that she inherited. We currently rent and have not lived anywhere long enough to buy.
International Lifestyle: I will likely move to Europe or the US for work in the future. A low-tax destination in Europe is more likely.
Personality: Impulsive so I aspire to make automatic contributions in line with the final asset allocation and re-balance once a year. My outlook is 25 years +. I have a toddler and I am trying to save and invest more for her.
Currency: I currently earn my salary in USD but I spend it in both USD and EUR as I travel frequently to Europe where my wife is from. I will definitely retire in Europe and if I do that, I will spend EUR.
Savings: I have no liquid holdings except for $5000 in Bitcoin - which I bought for 10% of that many years ago. I also have $150K in sweat equity invested in company projects (should get 1.5x my money in a few years, it cost me nothing).
I am not entitled to any state or company pensions to speak of.
Funds:
- Emergency funds: $60,000 - should last a year if we make some lifestyle changes.
- Down Payment on a rental investment: $70,000 - Rationale: I can possibly get a low-interest fixed mortgage in Europe and make a 4-7% Yield with possible capital appreciation. I would like to build a small portfolio of yielding properties.
- Money set aside for side hustle: $50,000. Will not touch additional savings.
Income : I make around $144K a year net of taxes, not including bonuses which vary. Have equity in my company and guaranteed job security. May quit one day though.
Desired Asset allocation:
- I will invest $50,000 immediately and make monthly contributions going forward of 40% of my income (minimum).
- I have tried to go for un-hedged options in order to have exposure to both USD and Euros. I am assuming that buying the actual unhedged ETFs in USD is the same as buying in Euros. Please correct me if I am wrong.
- I have tried to go for accumulating instead of distributing ETFs but some of the ones I found did not have an accumulating option. It should be OK from a tax perspective as I am not taxed on dividends.
Bonds:
- Developed Country Bonds: 12% - AGGG SW (DIST, USD, 0.1%)
- EM Bonds:3% - JPEA (ACC, USD, 0.45%!!)
- Developed World Stocks: 60% - SWDA LN (ACC, USD, 0.2%)
- EM Stocks - including small caps: 15% - EIMI LN (ACC, USD, 0.18%)
- Developed World Small Caps: 5% - WSML LN (ACC, USD, 0.35%)
- US REITs:3% - IUSP SW (DIST, USD, 0.4%)
- EU REITs: 3% - IPRP SW (DIST, EUR, 0.4%)
- I will do some dollar cost averaging of Crypto on a monthly basis - buy it and forget it.
I may also invest a small amount in niche startups - through an angel network. I have $10k for those now.
Questions:
- Is there any replication in my asset allocation? Is it a wise allocation?
- Is there a better way to get exposure to both US and EUR?
- Are the ETFs I selected the right ones to go for? They seem to have high fees? I would love to go with a better suggestion.
- FOMO - Would love more exposure to the video game industry, marijuana, and petcare. Don’t use/have either of these but I see what is going on around me. Should I have small ETF holdings or just forget it.