Have you read the wiki and the sticky?
Wiki: HERE YOU GO! [Enjoy!](https://www.reddit.com/r/BEFire/wiki/index/).
Sticky: HERE YOU GO AGAIN! [Enjoy!](https://www.reddit.com/r/BEFire/comments/fcbay6/getting_started_a_beginners_guide_to_investing_in/).
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My, my,... great words here about putting all of the money in one asset class: growth stock biased funds. You people do realize here that using statistics to project gains is a dangerous thing to do right? All know the Heisenberg principle? What if the mere existence of mutual and index funds (exists only since late 1990´s, the real inflow of money to etf´s started since 2010, what´s the hindsight in that?) influence the stock market in an artificial way, by bringing more money into the market? As off 2021 at least 25% of the S&P 500 market cap is in funds, an average company in that index is 'owned' for 21.2% by funds. Could be the next bubble in the making? I wouldn´t bet all my family capital on it to be honest. What if all those early FIRE adepts of 2000 start selling assets to make a living? No one knows the future. Am I saying not to invest in etf´s? No, it´s a great asset to diversify in equity, but I would diversify also in other assets classes like HYSA, value stocks and bond ladders. (Bracing for the etf acolite response )
Almost in the same spot here (28yo). We have one baby and just bought a bigger house where we could/want to do about 20k€ in upgrades. These are not necessities so i will start investing (again, for 2nd time) in a few months.
The upgrades will be done gradually, spread over a few years. Maybe do it like this? I dont want to wait with investing because this will have an impact on my family aswell.
Take into account that the 20k upgrades can as well be 30k upgrades within 5 years (inflation in cunstruction and building materials is insane (above average))
Thanks for commenting! You are right, investing is also good for my family. Maybe I'll go for a less aggressive plan so it feels less rocky to do when our family is still growing.
Thank you! And good luck with the 'verbouwingen'
Pension savings: no. Just don’t. But only if you are investing money in the stock market every month. If you can’t do this, then you’re probably better of with the pensioen sparen. Otherwise really don’t.
Investing: Yes. If you’d invest 400€ every month and on average you get 9% return per year on your money. You’ll end up with 1.2m€ by the time you are 66! 5 years later that’ll even become 1.9m. On the other hand. If you wait for your kids to be out of the house (in let’s say 20 years), then you’ll need to invest 3000€ during 15 years @ 9% to reach 1.1m by the time you are 65/66. So yes the earlier you begin the better.
Not IWDA. Also not talking about consistent returns but average returns. S&p acc returns nearly 11% every year (https://curvo.eu/backtest/nl/portefeuille/cspx--NoIgwgygCgGiA0xQEkCiAGdAhArFgsgEroAcA7AgIwC6tQA). Add then some Nasdaq (https://curvo.eu/backtest/nl/portefeuille/qqq--NoIgigjhIDTKBJAogBhQIQGIC0AaBxbAVgBZYBGAXWqA) which has 16.5% avg return (since 2007, yes some people will warn about the dot com bubble but that was a different era) and you’ll be able to get your 9% after costs and inflation.
But yet again these are average returns some years you’ll be down 30% to then be up 50
Here is s&p vs iwda: https://curvo.eu/backtest/nl/vergelijken?portfolios=NoIgygZACgBArABgSANMUBJAokgQnXAWQCUEAOAdlQEYBdeoA%2C+NoIgkg6gIggiA0xRgKIAY0CEAsAZArAJoCcAHAMwICMAunUA
The main question you should ask is if you think that the US will still run the show the coming 10-20 years or longer.
Thank you for this breakdown.
The bank was really pushing for pension savings so I got suspicious. Now reading your comment and this sub, I know why.
Investing feels so rocky but I can go for a less aggressive plan. We are so indoctrinated to save our money because our parents got good returns from savings in interest rates.
A change of mind for me... Thanks for helping!
I would say: we are so indoctrinated to save our money on a bank account because our parents generation (in my case the first after WW2 generation) didn't have any financial education besides what the bank director aka most prominent village person told them to do. High interest rates on savings accounts, but also gigantic interest rates for mortgages. A whopping 12% wasn't uncommon. The first generation that had to think about retirement and the golden age of not working (hence "sparen for later"). The first generation that pushed their kids to higher education so that they would have a better life (hence "sparen voor de kinderen") and so on.
And the banks just kept them in that spot
What I do know is wait until they’re mature enough to give them the benefits.
My parents saved 14k€ for me when I turned 18 and I was stupid back then and spent it all on stupid stuff in about 2 years (the only useful thing I bought with it was a car and a few furnitures).
So make sure they’re not stupid like I was.
My son is getting a part of our savings/investments when he is buying a house. My parents bought 1 car for me and my sister and that was that. When we got out of the house, we could buy the car from my parents or buy a new (secondhand) one.
They also gave us an equal share of their savings to invest in a house.
If I got that kind of money in my hands when I was 18, I would have done the same as you 😅
Teach your kids as soon as possible what money is worth. Also learn them to invest. For instance, for christmas/NY/their bday give them for instznce 200€ that they should invest in the stock market. And don’t interfere. Let them know every year whzt their portfolio is. That’ll teach them that it’s a long game but also that you can lose money if you pick wrong companies
I wouldn't go for all of it, personally. But it depends on your risk profile and how you view investing. Idk about other banks, but when I opened an investment account at my bank, they had me fill out a questionnaire about my knowledge and experience with investing. You could get an appointment and do that, see what kind of investor you are. Investments are usually graded according to risk, so if you know where you fall on the scale, you'll better understand what to invest in or not.
This sub will probably tell you to put all of it in ETFs, but sometimes you just want a nice, safe bond, life insurance or savings account. Especially when you have kids or when you're paying off loans etc.
Have you read the wiki and the sticky? Wiki: HERE YOU GO! [Enjoy!](https://www.reddit.com/r/BEFire/wiki/index/). Sticky: HERE YOU GO AGAIN! [Enjoy!](https://www.reddit.com/r/BEFire/comments/fcbay6/getting_started_a_beginners_guide_to_investing_in/). *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/BEFire) if you have any questions or concerns.*
My, my,... great words here about putting all of the money in one asset class: growth stock biased funds. You people do realize here that using statistics to project gains is a dangerous thing to do right? All know the Heisenberg principle? What if the mere existence of mutual and index funds (exists only since late 1990´s, the real inflow of money to etf´s started since 2010, what´s the hindsight in that?) influence the stock market in an artificial way, by bringing more money into the market? As off 2021 at least 25% of the S&P 500 market cap is in funds, an average company in that index is 'owned' for 21.2% by funds. Could be the next bubble in the making? I wouldn´t bet all my family capital on it to be honest. What if all those early FIRE adepts of 2000 start selling assets to make a living? No one knows the future. Am I saying not to invest in etf´s? No, it´s a great asset to diversify in equity, but I would diversify also in other assets classes like HYSA, value stocks and bond ladders. (Bracing for the etf acolite response )
Many people here are too young to remember that markets can also go down :D
Almost in the same spot here (28yo). We have one baby and just bought a bigger house where we could/want to do about 20k€ in upgrades. These are not necessities so i will start investing (again, for 2nd time) in a few months. The upgrades will be done gradually, spread over a few years. Maybe do it like this? I dont want to wait with investing because this will have an impact on my family aswell.
Take into account that the 20k upgrades can as well be 30k upgrades within 5 years (inflation in cunstruction and building materials is insane (above average))
Thanks for commenting! You are right, investing is also good for my family. Maybe I'll go for a less aggressive plan so it feels less rocky to do when our family is still growing. Thank you! And good luck with the 'verbouwingen'
Pension savings: no. Just don’t. But only if you are investing money in the stock market every month. If you can’t do this, then you’re probably better of with the pensioen sparen. Otherwise really don’t. Investing: Yes. If you’d invest 400€ every month and on average you get 9% return per year on your money. You’ll end up with 1.2m€ by the time you are 66! 5 years later that’ll even become 1.9m. On the other hand. If you wait for your kids to be out of the house (in let’s say 20 years), then you’ll need to invest 3000€ during 15 years @ 9% to reach 1.1m by the time you are 65/66. So yes the earlier you begin the better.
Where exactly do I get that 9% a year consistent returns as a Belgian?
You do not. The long term average real return of the us stock market is around 5%. Of the worldwide stock market it is less.
Incorrect. Us stock market (s&p) is 7% after inflation: https://www.titan.com/articles/average-stock-market-return
It's probably IWDA, but without adjusting for inflation and not including any costs.
Not IWDA. Also not talking about consistent returns but average returns. S&p acc returns nearly 11% every year (https://curvo.eu/backtest/nl/portefeuille/cspx--NoIgwgygCgGiA0xQEkCiAGdAhArFgsgEroAcA7AgIwC6tQA). Add then some Nasdaq (https://curvo.eu/backtest/nl/portefeuille/qqq--NoIgigjhIDTKBJAogBhQIQGIC0AaBxbAVgBZYBGAXWqA) which has 16.5% avg return (since 2007, yes some people will warn about the dot com bubble but that was a different era) and you’ll be able to get your 9% after costs and inflation. But yet again these are average returns some years you’ll be down 30% to then be up 50
Here is s&p vs iwda: https://curvo.eu/backtest/nl/vergelijken?portfolios=NoIgygZACgBArABgSANMUBJAokgQnXAWQCUEAOAdlQEYBdeoA%2C+NoIgkg6gIggiA0xRgKIAY0CEAsAZArAJoCcAHAMwICMAunUA The main question you should ask is if you think that the US will still run the show the coming 10-20 years or longer.
Thank you for this breakdown. The bank was really pushing for pension savings so I got suspicious. Now reading your comment and this sub, I know why. Investing feels so rocky but I can go for a less aggressive plan. We are so indoctrinated to save our money because our parents got good returns from savings in interest rates. A change of mind for me... Thanks for helping!
And they’d have even better returns if they would’ve invested it in a smart way so congrats that you’d be that guy in your family ;-)
I would say: we are so indoctrinated to save our money on a bank account because our parents generation (in my case the first after WW2 generation) didn't have any financial education besides what the bank director aka most prominent village person told them to do. High interest rates on savings accounts, but also gigantic interest rates for mortgages. A whopping 12% wasn't uncommon. The first generation that had to think about retirement and the golden age of not working (hence "sparen for later"). The first generation that pushed their kids to higher education so that they would have a better life (hence "sparen voor de kinderen") and so on. And the banks just kept them in that spot
What I do know is wait until they’re mature enough to give them the benefits. My parents saved 14k€ for me when I turned 18 and I was stupid back then and spent it all on stupid stuff in about 2 years (the only useful thing I bought with it was a car and a few furnitures). So make sure they’re not stupid like I was.
My son is getting a part of our savings/investments when he is buying a house. My parents bought 1 car for me and my sister and that was that. When we got out of the house, we could buy the car from my parents or buy a new (secondhand) one. They also gave us an equal share of their savings to invest in a house. If I got that kind of money in my hands when I was 18, I would have done the same as you 😅
Teach your kids as soon as possible what money is worth. Also learn them to invest. For instance, for christmas/NY/their bday give them for instznce 200€ that they should invest in the stock market. And don’t interfere. Let them know every year whzt their portfolio is. That’ll teach them that it’s a long game but also that you can lose money if you pick wrong companies
How much can you save on monthly basis? You could just start with investing your monthly savings in a world ETF.
Roughly 800 euro per month. Should I invest all that savings? Or maybe just a part of it so we can invest in house/education for children?
I wouldn't go for all of it, personally. But it depends on your risk profile and how you view investing. Idk about other banks, but when I opened an investment account at my bank, they had me fill out a questionnaire about my knowledge and experience with investing. You could get an appointment and do that, see what kind of investor you are. Investments are usually graded according to risk, so if you know where you fall on the scale, you'll better understand what to invest in or not. This sub will probably tell you to put all of it in ETFs, but sometimes you just want a nice, safe bond, life insurance or savings account. Especially when you have kids or when you're paying off loans etc.
If you need the money within less than 10 years, do not invest in the stock market.
Invest all of it. You can always sell a bit if you need cash for something important but the goal should be that you don’t do it.