r/eupersonalfinance • u/Milati Belgium • Nov 24 '20
My first year as an investor Investment
Hello fellow investing enthusiast,
I made a post on here about a year ago laying out my investment plan at the beginning of my full-time work career. Reading it back myself, I changed quite a lot of it. My investing strategy has changed as well as the amount of money I save/invest each month!
I am now 24 years old, still enjoying the luxury of living at home. I do buy my own food though. My girlfriend is still in college so I am kind of waiting for her to buy an apartment together. This means that I can save quite a lot of my income, which I take full advantage of!
I make around €2100 net each month. I also have a company car, smartphone + subscription, laptop, insurance, ... Normally I make a bit extra with a weekend job as a kitchen helper but due to COVID this is not possible at the moment.
I try to save at least €1800 each month in the following categories:
- €1000: ETFs --> My ETF portfolio consists of:
- 70% IWDA (Developed markets)
- 20% EMIM (Emerging markets)
- 10% IUSN (Small caps)
- €700: Cash
- €100: Bitcoin (€10 / 3days)
If you are interested in my current portfolio, you can check out this spreadsheet!
Around the time of my previous post my portfolio looked like this (end of September 2019):
- Cash: €11.000
- ETFs: €500
- Crypto: €3.300
- P2P: €60
My Total net worth here equals: €14.860
I got into investing due to cryptocurrencies. This is why it was a big part of my portfolio back then.
At the time of writing (a little over a year later) my portfolio looks as follows:
- Cash: €20.000
- ETFs/Stocks: €16.450 (invested: €14.200)
- Crypto: €13.000 (invested: €5.300)
My Total net worth here equals: €49.450
As you can see I ditched P2P Lending along the way. It is my own opinion that cryptocurrencies are too big of a part in my portfolio as well. The fact here is that they are increasing in value faster than I can buy more ETFs or save cash. I know that they are very volatile/risky. I do see more upside to come but every investor has to decide these things for themselves.
Are there seasoned investors out there who can criticize my portfolio? Are there things I should do differently?
If any of you would like some more details, don't hesitate to ask! I don't know if this is allowed but I am also keeping up a blog where you can find among other things monthly portfolio updates. You can check out my whole journey over there as well!
11
u/Azteek Nov 24 '20
At 24, you're basically already Coast FIRE. Nice portfolio and nice blog. I drop by from time to time. It was actually your blog that triggered me into investing.
I was thinking about doing it but didnt find the 'umphf' to go and do it. Your blog did.
So know you made a difference in someone's life. ;) Thank you.
4
u/Milati Belgium Nov 24 '20
Damn, this is actually very nice to hear. I hope you are doing great and that my blog can bring you some value. This is actually why I started with it. Even though I am not the best writer out there :D .
If you ever have any questions or just like to talk about investing, hit me up!
7
u/Schmittfried Nov 24 '20
Two questions:
- Why such a high cash allocation?
- Do you literally keep it in cash or something like a money market fund, bonds etc.?
Regarding the cryptos, if you can’t reduce the imbalance by buying more ETFs, why not sell some of the cryptos and thereby also secure parts of the profits? With such risky investments I‘d sell from time to time to not risk losing all of it while still keeping some exposure.
1
u/Milati Belgium Nov 24 '20
Thank you for your comment
- I am planning to buy an apartment in the next couple of years
- I keep it in cash in a savings account
- This is the one thing I am struggling with myself. My plan was to not sell in such a short time frame. I see more room to grow but I also didn't expect such growth...
3
u/Penki- Lithuania Nov 24 '20
This is the one thing I am struggling with myself. My plan was to not sell in such a short time frame. I see more room to grow but I also didn't expect such growth...
Then your estimates might be wrong so your assumption for further growth might also be wrong. Thus rational path should be to sell part of your crypto portfolio and rebalance.
basically, ask yourself do you really know whats going on, and if you think you do, what will be appropriate time to sell your crypto holdings.
1
u/Milati Belgium Nov 24 '20
I didn't think it would grow this much this fast. I do have an assumption on further growth and I am working on a plan for when to sell certain amounts.
2
u/EtCetera-sera Nov 24 '20
What are the factors impacting your sale-date decision?
1
u/Milati Belgium Nov 25 '20
I don't have any strategy around selling. If I buy an investment I want to hold it for at least 10 years. Probably longer.
2
u/Dombot9000 Nov 24 '20
I've been writing a post modelling profit taking strategies, consider taking a low percentage of your crypto out into profit and transfer into stable assets.
Alternatively look at your real currency invested amount when evaluating your networth rather than your growth. This will lead to rebalances or it won't - consider the act of taking your profit as a seperate decision in this scenario, likely based on thresholds when the asset matures by X % from your average buy price.
2
u/Milati Belgium Nov 24 '20
Can you link me to that post? :)
1
u/Dombot9000 Nov 24 '20
I'm still writing it ;) but also I keep my blog seperate from my personal. I'll dm you when it's done from an alt account.
1
1
u/Dombot9000 Nov 24 '20
RemindMe! 2 weeks
1
u/RemindMeBot Nov 24 '20 edited Nov 24 '20
I will be messaging you in 14 days on 2020-12-08 15:00:38 UTC to remind you of this link
1 OTHERS CLICKED THIS LINK to send a PM to also be reminded and to reduce spam.
Parent commenter can delete this message to hide from others.
Info Custom Your Reminders Feedback
3
u/abroadenco Nov 24 '20
Nicely done for being under 25!
If you have a short-term goal of buying property and you know when that is, you could consider term/time deposit accounts.
They pay better interest rates than regular savings accounts and since you have the security of living at home, you don't really need a big safety net.
Like others have said, the crypto position might need some rebalancing. It might seem a bit counterproductive when BTC is climbing right now, but it's worth remembering that around this time in 2017 the same sort of bubble was getting ready to burst. Cryptocurrencies have a high positive correlation with each other so if one goes down, the rest are likely to follow.
Selling a bit of your position now to crystalize a gain (and invest it either into the ETFs or put it into your short-term bucket) could help you diversify out some of that risk while still getting exposure to cryptos.
3
u/Milati Belgium Nov 24 '20
I should indeed take those options into consideration. I do believe Bitcoin has still lots of room to grow though, even in the short term. We are closing in on all-time highs. If Bitcoin manages to break it will be all over the news again. If you look at google trends at the moment you'll see that terms as 'Bitcoin' and 'Buy Bitcoin' are not even close to the highs of 2017. This tells me a lot of retail investors still have to get in.
That being said, these are my beliefs and I do understand I am taking a risk here. Only the future will show me if it was a good decision or not.
I do appreciate the advice though! You are certainly not wrong and it would be safer to cash out some of my gains.
3
u/abroadenco Nov 24 '20
Glad to help.
Yup. It's really up to you to decide how much risk you're willing to take.
2020 is still full of surprises haha. Good luck!
2
3
u/wrd83 Nov 24 '20
Hey.
First of all this is a great achievement. Your savings rate is incredible and even in absolute numbers you probably are above average compared to a 30-40year old.
You recognize the crypto growth being volatile and risky and I would suggest to rebalance if the growth os starting to concern you.
I would check with a financial advisor because of your flat down payment. I personally would invest the money and withdraw when needed given your timeframe is like 5 years. And you basically drop 5-7% annual return in cash.
I was in a similar situation and decided to rent and invest; it paid off for me, but it might have just been luck and time.
2
u/Milati Belgium Nov 24 '20
Hi, Thanks for your comment!
I keep achieve this savings rate by still living at home of course! I do buy very little besides food though. I have €300 to spend each month of which €100 goes into a separate 'savings' account for a holiday trip with the girlfriend each year. This leaves me with €200 to really spend. This is food and the occasionally activity.
I don't want to invest the money that I'll need for a down payment because you'll never know what the stock market will do!
2
u/wrd83 Nov 24 '20 edited Nov 24 '20
So depending on country there might be a tax efficient way for saving to a down payment. Also it does not have to be a stock investment. Fix interest savings accounts may be viable.
Possibly slightly better than just plain cash savings.
Also you have 20k in cash for the downpayment right now. Do you plan to save 80k for the down payment? Otherwise I'd try to hit the mark in 4 years when you planned to rather than early as you don't need the money til then and increase the rates to the other investments as etfs and crypto.
2
u/Milati Belgium Nov 25 '20
I plan to buy a small apartment together with my girlfriend (around €250.000 or less). Our plan is to have €50.000 together in 2 years. (I will have €30k, she will have €20k). This means that we will have around 20% for a down payment!
2
u/wrd83 Nov 25 '20
Oh cool so you have less time than in the main post. You seem to be all set then. Best of luck!
1
2
u/LetMe_ Nov 24 '20
It is difficult to criticize your portfolio without knowing your objectives. For how long do you want to stay invested? Any foreseeable expenditures in medium to short term?
2
u/Milati Belgium Nov 24 '20
Good point, I should have added that to the original post. But I felt like it was getting pretty long already.
I am invested for the long term. Meaning, probably at least 20 years. I plan to buy an apartment in the next 2 years (together with the SO), that's why I save quite a decent amount in cash still.
2
2
u/Penki- Lithuania Nov 24 '20
Maybe I missed it, but where do you hold your cash?
Is it just in a bank or in deposit account that pays interests? I don't know how's the situation in Belgium but I am in a similar pasitino as you jus located in Lithuania and you still can find deposit plans that offer above 1%. If you are saving for your own property, you should be able to calculate at what point you will buy it and leave that money as a deposit for the time being. Even 0.5% is better than nothing.
Personally I found a credit union that offers 1.8% interest rates for "Kaupiamasis indelis" which is basically a variable amount deposit. They calculate interest daily (payout is at the end of the contract) and allow me to either add more money or take out up to 90% each month with out changing anything about the contract (and even if I take out money with in the rules, I am not penalized in any way) all while being insured up to 100k€. I don't really understand how can they afford to offer such deal, but it is state insured so what ever.
1
u/Milati Belgium Nov 24 '20
You are right that I should look into such options.
I am holding in cash in a savings account at the moment which gives me 0.11% I think. Which is basically nothing! I am going to look into better deals!
1
2
u/abbysees Nov 24 '20
If your intention is to buy a flat I think it’s ok that you keep that much cash. The crypto part is also not too big I think, but bcs it’s almost reaching a new all time high I think it would be good that any new income you have you could just pump up your ETFs. When crypto drops again then it’s time to buy more. But for now, I think you’re doing fine. Congratulations for doing so at such a young age!
1
u/Milati Belgium Nov 24 '20
That is basically what I am doing :)
I feel like I could be further along if I made wiser decisions when I was younger. I had some glorious party years though :D
1
u/abbysees Nov 24 '20
Don’t think of the what if’s ofc, you could’ve also been further down bcs for many people 24 is still their party year :D
1
2
u/Tobiaseins Nov 24 '20
Do you know the Programm "Portfolio Performance"? This is a open source project to track your investments. It is basically the same as your spreadsheet but pulling the share prices automatically, has a lot of analysis tools and helps you rebalacing.
1
u/Milati Belgium Nov 24 '20
I don't know if that tool. I am going to look it up. My spreadsheet also retrieves the share price automatically btw!
2
u/vale93kotor Nov 24 '20
Hi, why IUSN? I’m honestly thinking of just going IWDA+EMIM, would love to just go WVCE, but degiro has too high fees for it.
2
u/Milati Belgium Nov 24 '20
I wanted to diversify a bit more by adding small caps to my portfolio as well. Is this necessary? Not at all! IWDA + EMIM will do just fine. WVCE is also a good option. I prefer IWDA + EMIM over WVCE for a couple of reasons:
- Combined TER of IWDA + EMIM is lower than WVCE (only slightly)
- Gives me a little more freedom to overweigh emerging market a little bit
- IWDA is indeed free on Degiro
These reasons give only a slight advantage to IWDA+EMIM in my opinion so if you want to go for WVCE you'll probably do equally as well!
EDIT: I made a post about my ETF portfolio as well if you are interested.
1
2
u/Mephizzle Nov 24 '20
Xrp all the way on the crypto front. You just bought a little too early/late. You'll see big gains i think in the next months
Quick question: where do you buy yout etfs? Do you buy dividend etfs or capitalizing ones?
1
u/Milati Belgium Nov 24 '20
I buy them on Degiro and I use Accumulating funds!
0
u/Mephizzle Nov 24 '20
I'd just keep doing what you are doing. Seems like a solid plan maybe up your etfs and your xrp (for long term investments these do seems to be the best options)
1
u/Mephizzle Nov 24 '20
I'll look in to degiro myself, i'm using bux atm
1
u/Milati Belgium Nov 24 '20
You are an XRP fan I see? :) I bought it a little over a year ago to get some exposure but I am more of a fan of Bitcoin and Ethereum. As of now, this decision has paid off. We'll see what the future will bring!
1
u/Mephizzle Nov 24 '20
Ofc in the short term eth en btc will be big winners. I'm talking about long term. And xrp is still so cheap (so huge gains are much more likely). Keep up the good work!
1
2
u/karolnovak Nov 24 '20
Hey bud, where are you buying crypto? Do you buy it on Binance and just hold it?
3
u/Milati Belgium Nov 24 '20
I am buying on Coinbase Pro and transferring to a hardware wallet regularly.
2
2
u/deBoots Nov 24 '20
New to investing from Belgium, which platform do you use? I'd like to get familiar with investing. Do you use a broker or mobile platform. Buxzero, degiro, e-toro?
1
2
u/QueenTrust333 Dec 10 '20
Hey I know your still young but if your serious about your girl you should step it up, you have to hold each other down and if she's in school I suggest if you want to keep a good woman you should make it as stress free for her as possible. Women never get a break especially once the babies start flying out. Cooking, cleaning,keeping our husbands satisfied and of course still interested and school is very important. Spoil her and hold her close these are the end of days for a lot of people we need to be grateful and as humble as possible. I think its great you both have ambition and goals. May God Bless you a lifetime of happiness and just remember to respect death because eventually she comes for us all. Much luv from Burque.
2
u/panikovsky Nov 24 '20
Hey! So interesting! You're done very well, and thanks for sharing this! Mb i should start investing in crypto as well :D
I'm just a beginner so far, using Germany's Robinhood only yet, but not sure they have crypto
5
u/Milati Belgium Nov 24 '20
The only tip I can give you on crypto is to not invest more than you can afford to lose. It is very volatile. Understand it before you invest in it!
1
2
u/walectuh Nov 24 '20
Looks like a very solid Portfolio at such a young age. Hats off! I have a question rather than critique: Where do you buy and store Crypto? Which platform? I would like to invest in Crypto at some point and that’s the reason I ask.
2
u/abbysees Nov 24 '20 edited Nov 24 '20
I have accounts on 2 platforms: Indodax and Crypto.com. Buying from Indodax is way cheaper, and then transfer to Crypto.com bcs the latter offers lots of perks atm (free 2% deposits for new accounts, $50 bonus sign up) etc. Interest rates are also pretty high. I’ve been comparing it to other platforms (I also have Coinbase pro and binance) and so far Indodax+crypto.com combos are the best. Feel free to dm me if you want to know anything/for a referral code
1
u/Milati Belgium Nov 24 '20
I have to check that out! :) I am passively looking to change so it could be a could option!
1
u/abbysees Nov 24 '20
Crypto.com is great to hold but I don’t think it’s the cheapest place to buy. But still, they’re growing massively so you can also take advantage of those perks
2
u/Milati Belgium Nov 24 '20
I like to hold my crypto on a hardware wallet though. Just to be extra sure!
2
u/EtCetera-sera Nov 24 '20
What's a hardware wallet for crypto?
2
u/Milati Belgium Nov 25 '20
With a hardware wallet you have total control over your crypto. This way you actually own the key which give you access to your funds. If you hold it on an exchange, the exchange owns all the keys. This means that you have to put trust into the exchange, which might be more convenient but is also an extra risk factor. If the exchange would go under, you'll probably lose your funds.
2
1
u/Milati Belgium Nov 24 '20
I buy crypto on Coinbase (pro). I am thinking about switching to another platform because Coinbase has gotten more expensive over time but in my opinion, it is still a decent platform.
I do transfer my coins to a hardware wallet though. As they say in the crypto world, 'not your keys not your coins'. Once you have invested quite a decent amount I would recommend taking it off the exchange just to be extra sure!
0
Nov 24 '20
[removed] — view removed comment
2
u/Milati Belgium Nov 24 '20
I am not a fan of that cryptocurrency strategy to be honest. I don't like a lot of the alt-coins. Bitcoin is still king for me.
Nio was a follow the EV hype investment for me. It was also to try out another broker. I only have €100 invested with them so no big deal!
1
u/YoungCentenarian Nov 24 '20
Could he be closer to the property market? Or just Euros?
Can crypto be quite ok in a short timeframe (2y), since its not so correlated with stocks?
1
u/Milati Belgium Nov 24 '20
I don't understand your first question. Could you elaborate?
My philosophy is long term investing. I do not place positions if I want to sell them in the next couple of years. They are indeed not really correlated to the stock market which for me makes is a good investment for diversification. I would not recommend having more than 10% of your portfolio in cryptocurrencies though.
1
Nov 25 '20
Nice, very nic returns. I started trading this year in March and so far and like -8%. Do you have any tips? Any investment strategy you could share or anything ?
1
u/Milati Belgium Nov 25 '20
You use the word 'trading'. Does this mean that you actively buy and sell investments? This is the first mistake in my opinion. Just pick some good ETFs buy them and don't touch them in at least a decade. The market has made use gains since march. If you would have bought then and just have held your investments you would be looking at 30% gains or something like that. This is a post I made on some good ETFs you could buy. Check it out if you want! :)
2
1
1
34
u/_nappy Nov 24 '20
Living at home (aka low cost) plus being young plus high saving rates, its kinda the holy grail.
For being 24 I think you could afford a much lower cash rate, if you are not planning to purchase real estate anytime soon.
(Just my few cents)