International Lifestyle: I do not expect to move out from Costa Rica or pass a very prolonged amount of time in any other country.
Currency: USD
Emergency funds: 3 Months of my salary
Debt: I have a student loan that it's in CRC, currently my balance is of approximately $13,024.47 USD (exchanged from CRC), it has an annual interest rate of 4,5% and I pay approximately $114.74 (exchanged from CRC) per month, the debt is for 14 years and I have been paying for 14 months.
Age: 23
Desired Asset allocation: 77% stocks / 23% bonds
Desired allocation to stocks outside your of country of residence: 77% of stocks
I don't have any investments yet.
Here in Costa Rica I have an state pension that me and my employer (and future employers) contribute to which it will be available for me at 65 years old and after a certain amount of quotas, these quotas are paid by my salary wages automatically alongside some other accounts that I also contribute in small amounts automatically and will receive after being unemployed or I can hold them until I have my pension.
Current assets
I have my savings in a regular savings account. On this account I have less that $7000 to invest as a lump sum, the other part of my money is for the emergency fund. I also have another account which is my everyday spending money which is my salary minus what I save each month, I save around 30% of my salary. Besides that I have no CD's or hold special kind of accounts.
Future planned investments?
By using BogleBot and reading related books, the Bogleheads wiki and such I have come by the basic portfolio of:
- iShares Core Global Aggregate Bond UCITS ETF USD Hedged Acc (AGGU)
- Vanguard FTSE All-World UCITS ETF (USD) Accumulating (VWRA)
Investment Objectives
My main objective by investing is to retire probably at the age of 60-65 or even earlier if I can afford it. Besides that in the nearest future I would like to have some money saved for a home, probably around 2033-2035. Obviously I think that I'm young and could change my mind or add a new objective in the following years like saving for a big trip, kids maybe, whatever life has for me that I haven't thought about yet, or with more investing knowledge I could have have some new ideas.
About me
I currently think that I can bear risk since I live with my parents, nobody is dependent on me and I work in tech as a software engineer, that enables me to save a healthy amount of money each month and the tech area is growing here in Costa Rica, so there is a nice amount of job positions coming every day for now with mostly stable companies, so there's stability for the moment. Nevertheless I really care about my money and saving in general, I want to invest since I want to get more return for my money rather than letting it sit on my bank account and my bank actually making money with my own money,
I plan to save around $400 per month or less an invest it in a regular way, besides that I plan to invest the lump sum when I'm ready and maybe divided it out throughout the months to see how everything works out since I'm quite new.
I'm paid in USD and most of my cash is in USD, though that could change in the future if my future employers paid me in CRC, but it's common in the tech sector to pay in USD.
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Questions:
1. For an investment objective like saving for a home at their thirties like me. How do people do it?
My guess it that obviously for short or intermediate stints like this you would either buy a MMF, CD's or a short bond fund or bond ETF. Does something like buying iShares Core Global Aggregate Bond UCITS ETF USD Hedged Acc (AGGU) and then selling it at the time that I need be sufficient? I know that internally they have an allocation of short and intermediate maturity dates but I don't know exactly in the real world how do people time this to their objectives or if maybe other instruments would serve me better, or another kind of specific duration ETF's that I've seen.
2. How much DCA?
I have to do wire transfer's from Costa Rica so the commission is between $15 to $30 and besides what Interactive Brokers will charge me as commissions. I don't want to pay a lot of commissions between my broker and my bank every month, so I guess that I could do payments every three months with what I've saved. Is that OK? Will it affect anything? I guess not much but I want to be sure.
3. How much investing is enough?
What I mean is, what I save each month, is it sound to invest it all on different instruments? For example If I want to save for a big travel with my friends or family, do I just take that money from what I save each month and let it sit in my bank account? Or is it more sound if I use short investments like CD's, MMF, short bonds, to hold this kind of money? How much enough is enough?
If anybody has any question please feel free to ask, thanks for your time