43, guy from Germany

[T3sla]

Hi,

I am a 43 yo guy from Germany.
I always thought about quitting before 65 since I started working with 18. Not because work was (and is) bad, but because I wanted always do so much other things
which I have lack of time during work (hobbies, travel, hike, read, do reasonable honorary office maybe).

For that goal I saved a lot, but not enough to do it right now if not...
Yes, if I not read about cryptocurrency some 6 years ago and invested some k I had as "play mony".
Needless to say, since the crypto rally last year that amount grow up a bit and I sold most of it (some too early, some too late of course) but it is still (I think) enough to go at that 4% wr with frugal lifestyle.

Question is now, how to reach that >4% grow rate, as I did not saved and invested that amount over the years (as most of you I think) but got it nearly instantly as cash on the bank account.
Of course I could invest it in some chunks to e.g. World Index ETF to keep up with the invest and maybe then in the same situation as most of you.
But in that scenario wouldn't it be a lot more about market timing as if I invested over the last years?
Keeping it like it is is not option eighter, I would only get around 1% on bank now.

What would you do?

 

[joeea]

For that goal I saved a lot, but not enough to do it right now if not...

Question is now, how to reach that >4% grow rate, as I did not saved and invested that amount over the years (as most of you I think) but got it nearly instantly as cash on the bank account.

Of course I could invest it in some chunks to e.g. World Index ETF to keep up with the invest and maybe then in the same situation as most of you.
But in that scenario wouldn't it be a lot more about market timing as if I invested over the last years?

What would you do?

Live more frugally, save more.

Invest in a highly-diversified low-cost index fund. Then leave it alone to let it grow. This is the opposite of market timing.

You won't necessarily make up for many years of not investing. But it's the best you can do at this point, and far better than making one big bet (like cryptocurrency) and hoping for the best.

 

[T3sla]

Hello joeea,

thanks for your opinion.

I don't know if I wrote it clear enough, I already own enough to live off off it if I calculate with a 4% withdrawal rate.
But actually most of it not invested.
To find a good, highly-diversified low-cost index fund would not be the main problem, more the question when to invest.

As we know, we are near a all-time high of stock markets and I would call it a bet to invest all at one time (although I would then be in the same situation as one invested it over 20 years and have the same amount today in stock market)

My actual idea is to invest it over the next 12-18 month to get some benefits due to rate fluctuations.

 

[flintnational]

T3sla, welcome to the forum. If I understand your post correctly, you have little experience investing in stocks and bonds (see edit). You made your money recently with crypto-currency. You are asking if now is an appropriate time to invest the money in the stock market.

In my opinion, you should leave the money in the bank account for a few months while you educate yourself on basic investment practices. You should read a few of the books recommended at the Bogleheads site. I would not invest in stocks until I had read several of these books and felt comfortable with basic stock investing concepts.

To answer your specific question, most here will tell you statistically it is not possible to correctly time the market on a consistent basis. Accordingly you should establish your investment asset allocation (split between stocks, bonds, cash) and stay fully invested at all times. Reading some of the recommended books will help you determine an asset allocation.

Regarding investment of a large sum, there are two primary approaches. You can invest all at once or make monthly purchases over some period of time (usually 6 months up to 1 year). But, once again, I would read and understand basic investment techniques before I would do anything.

Edit to add: Rereading your post, you may have experience with stocks and bonds. If so, my last two paragraphs should answer your question.

 

[T3sla]

T3sla, welcome to the forum. If I understand your post correctly, you have little experience investing in stocks and bonds (see edit). You made your money recently with crypto-currency. You are asking if now is an appropriate time to invest the money in the stock market.

In my opinion, you should leave the money in the bank account for a few months while you educate yourself on basic investment practices. You should read a few of the books recommended at the Bogleheads site. I would not invest in stocks until I had read several of these books and felt comfortable with basic stock investing concepts.

To answer your specific question, most here will tell you statistically it is not possible to correctly time the market on a consistent basis. Accordingly you should establish your investment asset allocation (split between stocks, bonds, cash) and stay fully invested at all times. Reading some of the recommended books will help you determine an asset allocation.

Regarding investment of a large sum, there are two primary approaches. You can invest all at once or make monthly purchases over some period of time (usually 6 months up to 1 year). But, once again, I would read and understand basic investment techniques before I would do anything.

Edit to add: Rereading your post, you may have experience with stocks and bonds. If so, my last two paragraphs should answer your question.

Sorry, I should have written that in the first post, I have experience in investing in stock markets since I am 18. Although that does not mean I traded very much but I invested in funds already since that time.
With that crypto-thing I was only lucky I think.


Given that, I have already some money in funds and ETF (also Gold) but of course not that sum that has to be invested now.

And I have no experience in investing in bonds...

 

[HI Bill]

I would try to diversify, not only between broad-based ETFs, but international ETFs, maybe some REITS (I've never owned them, but owned real property instead), and maybe a bond ETF. That way, if one sector or country's equities tank, you have some cushion. I'd also consider holding something like 2-3 years of expenses in a money market fund, so you can access the money market account, rather than selling equities in the event of a down market.

Historically, the US stock market has returned 7%, on average, which is great, as inflation here has only averaged 3%. So, my goal would be to keep earnings slightly ahead of inflation. Not sure about Germany's return or inflation.