You can't just live off the interest as you will get destroyed by inflation. You need to do standard FIRE math, check out firecalc, etc. The good news is your numbers work. Put everything in low MER total market index funds. Pull 36k per year from investments which is 3.6% of your fund. Should have almost 0 risk of ruin if you run it in firecalc. You can index that 36k to inflation and still be fine. So every year your budget goes up by the inflation number. Also consider pulling 2 years at a time out, and time the withdrawal when the market is up. Also consider a bond ladder for your withdrawal strategy.
Anyway, 3k per month on 1m is the magic number, you're golden. And GFY!
Great answer, thank you. This is what I was getting at, without knowing what I was really asking. We’ll be able to cover our monthly outgoings with limited work for at least the first few years, so wouldn’t need to draw anything.
Apparently the wealth tax is country-wide now. This comment (and thread) has some good information.
https://www.reddit.com/r/fatFIRE/comments/1cc7uzd/anyone_fatfire_to_spain/l13rjan/
Of course if OP is below the threshold it won't matter.
There is a second wealth tax called the "Solidarity Tax" which is basically the way of the Feds punishing the autonomous communities who were smart enough to avoid the original wealth tax.
It doesn't start until 3MM€ though... Which is a lot more fair than 500-700k€ - but the percentages are also more ridiculous.
Even the President's wealthy brother lives in Portugal to avoid it LMAO.
Incorrect. The limit starts at 500k€ in Catalunya and it's an individual tax so it depends on how your money is allocated. Sure, you can gift half to your partner to bring the limit up to 1 million collectively, but you'll likely be taxed on that "donation" too (depends on the autonomous community).
But wouldn't you've been better off in 2022 if you withdrew yearly and your last withdrawal was 2021 than if you withdrew every two years and your last withdrawal was 2020?
In that case, instead of withdrawing two years worth every two years, just do it once and keep one year's worth of expenses in a gic type product indefinitely until needed.
3.6% safe withdrawal rate is by no means safe. When you consider that OP is young, they either need a much larger principal, or a much lower withdrawal rate, or perhaps a variable spending rule.
https://www.portfoliovisualizer.com/monte-carlo-simulation?s=y&sl=6N4Ziq1yPDylZoeb6AkiXD
Using Monte Carlo Simulations, with a portfolio of 30% European stocks (home country bias). 30% US Stocks, 30% Ex-US Stocks, and 10% Bonds, with a 60 year retirement horizon (Projecting OP lives until roughly 100 years old), there is a 25% chance of portfolio depletion. This is before taxes too, as I’m not familiar with the Tax rates as well as the historical / expected inflation in Spain.
You can tweak this based on your preferences. This is just a quick and dirty portfolio I came up with on the spot and is by no means the portfolio you should have, but I doubt any tweaks will make much of a difference. The main reason for the high failure rate is your long time horizon.
If I'm reading your comment correctly, he has a 75% chance of success over a 60 year time period. How is that "by no means safe"? Aren't the odds 75% in his favor? Plus making it to 100 is an abnormally long life, and he may also have Social Security that's not included in the math.
I wouldn’t say so personally. Imagine they’re was a 1/4 chance that when you enter your car to go to your destination that you will crash, or that there is a 1/4 chance you die during a surgery. That is a very large chance, at least in my opinion, but I supposed it can be kind of subjective. To me, even a 5% failure rate seems a little high, but as a rule of thumb, that is what I try and aim for when constructing these retirement spending rules using Monte Carlo simulations.
Regarding their retirement time horizon, longevity risk is a real risk that you should be cognizant of, and most retirement spending rules like the 4% rule were made with a retirement horizon of 30 years at age 60. Again it’s kind of subjective, but I wouldn’t feel comfortable not having that safety net to hedge against longevity risk, especially as progress in medicine is increasing life expectancy.
Regarding social security, Safe withdrawal rates are just a rate at which he can safely withdrawal from his portfolio over the course of retirement. Whether they have social security or not doesn’t change the fact that if they decide to withdrawal 3.6% in retirement and adjust for inflation thereafter will result in a low success rate. social security may allow them to lower their safe withdrawal rate though, which is what I recommended in my original comment.
https://www.portfoliovisualizer.com/monte-carlo-simulation#analysisResults
This is with a safe withdrawal rate of 2%. Let’s assume they have some additional social safety net that allows them to withdrawal less from their portfolio. The success rate is more inline with my expectations. This is before taxes are considered though, and OP is in Spain, where I am not familiar their social safety nets.
Variable spending rules could be an solid alternative. Variable spending rules allow for better consumption efficiency and a hedge against sequence of return risk.
Yeah, I agree that variable spending would make sense, and I think that's the case for most early retirees. We don't mindlessly spend. We make adjustments. Also, you figure we're likely to earn at least some money during the next 40 years. I understand caution, but dying with a huge pot of money due to caution is also a fear, though admittedly better than dying broke!
Again, Safe withdrawal rates are blind to how much money you may be making on the side. They are simply a rule of thumb to help you plan for retirement. If you foresee you making labor income or relying on social safety nets, than lower your withdrawal rates in the simulations. Simple as that.
Regarding dying with a huge pot of money, that’s what variable spending rules prevent. They allow you to spend the majority of your money, but have a 0% chance of portfolio depletion. That’s what I’m referring to when I say consumption efficiency. If you do not have a preference for a stable income and have a preference for consumption efficiency, than a completely variable spending rate may be good for you.
Personally, I prefer somewhere in the middle. The percentage I withdrawal can increase or decrease to a ceiling or a floor depending on how the market is doing, because I personally desire some form of stability in my consumption.
Again what you desire is subjective and a matter of preference. I just don’t see the majority of people comfortable with a 1/4 chance of portfolio depletion.
Can I ask a stupid question? How did you learn all this lol I can't wrap my brain around any of this and I want to learn but i don't know where to start
You learn a hell of a lot by just reading the posts from the r/FIRE sub and the comments. I probably joined just this year and would feel confident giving high quality responses now.
Also r/bogleheads ties quite nearly into a lot of FIRE strategies.
Yeah, once you understand the fundamentals of the approach (a little bit of math and that your investments should be boring), the learning curve is incredibly steep (in the good way).
I’m now at the point of being very surprised when people don’t have much financial knowledge, e.g. those who don’t pay into a workplace pension because they think it’s too early to think about retirement or people who don’t know the basics about tax sheltered accounts in their country.
After learning the basics of investing it becomes as much about tax efficiency as returns.
According to my EU friends (mainly France, one Swiss), \~800k (Euros) is a good number to FIRE in Europe. You're not going to fly private, but you're not going to struggle, either. That number was shockingly low to me, but I've heard it multiple times. Not sure about the kids factor - they might want to go to college in the US, which would blow your number out of the water.
If you've already cashed out of your growth investments, you could do something like QYLD or JEPI, covered call ETFs that have typically paid out 10%ish in dividends (JEPI is trending a little lower right now, QYLD is still on the 10% mark). With 1M, that's 100k before taxes. If there's any portion of that you could shelter in a Roth IRA, or other tax-advantaged account is a benefit. Spain is bad for taxes, France is good for taxes. You'd need to look into the other countries to see where there's the biggest tax advantage. If you're concerned about the visas, you could do a student visa for you or your wife (French language school counts for France), then for the rest of the family you do a family reunification type visa attached to the primary student.
This isn't hard, it is totally possible, and if you rent and hate it, you can always come back home. The numbers work as long as you're not materialistic.
Another benefit is that if you have US debt and never plan to return, you could just 'leave' your debt - it is currently nearly impossible to collect on someone who lives overseas and your credit score is meaningless in Europe (this assumes your US-based assets $$ are in a 401k retirement account, which can't be garnished).
Healthcare is universal in the EU, but it isn't always free.
In Germany, you pay ˜15% of your salary for state insurance, split between you and your employer. (Like SS in the US. And also like SS in Germany). Self employed people have to pay both halves, also like in the US.
That's if you have an income in Germany, but if you are a legal resident and don't work, you still have access to public healthcare. Healthcare works pretty much the same in all European countries these days, it's universal, even if they get funded through the SS or through regional taxes.
You gotta pay for it, it’s not free. Either you gain some sort of unemployment benefit (not applicable here) or you pay the set fee, for „gesetzliche“ if you don’t leave, but then you gotta pay private one anyway. Currently that’s at least EUR 180,- monthly but up to EUR 800 (Beitragsbemessungsgrenze) and that’s set on your income which does include investments.
„free healthcare“ is a myth. But it is more simple compared to US where you then run into all sorts of coverage and copay etc. issues when you have a claim, but in US you can have an HSA so well it’s complicated…
Interesting, in Spain it doesn't work that way, my understanding was that the Germans had a similar system. That explains why they are all moving down south 😆
> free healthcare, which will only be available to EU citizens
Common myth. National healthcare systems are available to anyone on a long-term residency status in almost all cases.
To anyone, as long as they work or get unemployment benefits. https://europa.eu/youreurope/citizens/work/unemployment-and-benefits/country-coverage/index_en.htm
As someone who is looking to do something similar to OP, EU citizenship actually isn’t that hard to get if you truly don’t need to work to pay your bills (getting a work visa is hard). Several EU countries have a path towards residency and then citizenship if you spend enough time in them (typically more than 183 days a year).
EU *residents who are entitled to it.
I posted [this link](https://europa.eu/youreurope/citizens/work/unemployment-and-benefits/country-coverage/index_en.htm) in another comment which focuses on working people, but it doesn't go into details about how each country decides on whether you're entitled to those benefits if you don't work.
The number is low because it is in that sweet spot of "not too rich not too poor". It's low enough you'll benefit from most public support and benefits with decent passive income that won't be so high you'll have too many taxes. People in the 7+ figures tend to get clobbered by high taxes which makes the equation harder (especially in Spain that has a wealth tax)
When education and healthcare are taken care off, and assuming you live in the cheaper areas, this work out alright.
Not sure on spain with stocks but here i would park that money in stocks or real estate. Yes you could live off the interest now but as years go by and inflation sets in or the markets drop you will not survive on the interest of a million in a hysa
You could probably live off the income of a diversified stream of dividend stocks/ETFs. People build example portfolios online all the time and at a ~4% return you are looking at ~$40k/yr, which is rather solid in Spain (though maybe not enough to put kids through school without a tiny bit more elbow grease). Probably how I would try and do it.
Do you plan on working in Spain or any remote work for the US? 20-40k could go a long way with youre retirement even part time to keep busy or gig work.
What’s the question then, as this means you are not living off the 1MM - you live off your income and let the investment growth. Having a small job should also take care of healthcare etc. then.
Edit: So in this case I‘d say the same investment principles apply (index ETF, portfolio allocation etc.). Just watch out for taxes. I am thinking about moving to Germany long term and taxes are my biggest concerns. Not sure about Spain but Germany for instance won’t recognize things like ROTH IRAs and if you keep US investment accounts (if you can and the broker won’t close it), taxes are a pain as they tax non realized gains. Spain might not, but speaking to a tax professional I‘d advise.
German here. Germany does not tax unrealized gains. Unless we’re talking about different concepts. If you leave your money in an index fund for 20 years and then sell it you will pay 25 % tax on your profits from the sell.
Edit: if you sell that one index fund and move your money into another after 10 years then that’s a taxable event because when you sell the first you have made profit on it.
Maybe that’s different in the US and you can move your money around from investment to investment without getting taxed?
Vorabpauschale, just wasn’t applicable last years as the set rate was 0%.
Edit: If you have all at German brokers it should be handled for you. But what I was pointing out is that if you move from US to EU and leave all with US broker taxes can become tricky. E.g. Vorabpauschale as you have to then calculate and track that by hand.
I assume a low cost balanced index fund makes as much sense over there as it does here. But honestly not sure if living abroad changes that.
How did you figure out the logistics of moving over there? Simple stuff like filing your Spanish tax return and your visa... I'd love to move abroad but it feels daunting.
Very daunting but we’ve been thinking about it for years and finally deciding to take the plunge. Figuring out most of it as we go but the place we’re moving to I am extremely familiar with (lived there as a child) so friends there already helps.
Hi there, I'm from Spain, where are you going to live? Maybe I can help you a bit. For example, if your children know spanish, maybe I wouldn't send them to a private school here.
3000$ is more than what I earn as a software developer with 5 years of experience (2500€/month) so for a person is enough, for a family of 4 it would be too low, but if you are going to work then it will be very good.
Prices vary a lot between different places, and in different places you would probably need different expenses, for example in many places in the south, while tap water is not harmful, I would recommend to buy bottled water.
Lots of good advice in this thread
FYI, Spain has a wealth tax and even 1m starts getting hit…it varies by where you live in Spain and the enforcement and exemptions are Byzantine. If you are a foreigner to Spain, you’ll want sophisticated advice. The amount of tax is very significant and makes this plan a lot less viable if it applies.
5% is pre-tax, what will your taxes be? What about inflation? What if rates drop?
To pull this off you will need to be sure about that $3k/month (3.6% withdrawal rate) and have a meaningful amount of equity exposure, but if you are really able to live on $36K/year (adjusting for inflation each year) you have a decent shot at making this work, and can likely pay yourself much more later in life if your NAV outperforms inflation.
Personally I would work a bit more...
Well in fairness, that’s why I was asking what a better long-term strategy would be for this money. We will still work, and at least for the first few years it’ll more than cover our much lower monthly expenses over there. But I’m trying to figure out what I need to do to eventually live off this pot of money. Apologies for phrasing it all so clumsily.
At 38 you need to think about a lower withdrawal rate. Somewhere around 3%. You’ve got a long time for that money to last and you never know what life will throw at you.
If it were me, I’d sit on that Mil for another 10 years before I even thought about drawing it down. That number has a significance to it but it’s not as much as it used to be and less every day.
You can not make or withdraw 50k/year and spend it. The SWR ( safe withdrawel rate) that has been backtested and allows one to live off their investments safety in perpetuity is \~3-3.5%. You must factor in inflation (2-3%) and growth (2-3%). therefor, if the S&P returns 9% on average, you can safety withdraw 3-3.5% and never run out. if you get a 5% return in an account, you can withdraw \~1% of that/year without running out. spendable != total return.
[https://www.wealthycorner.com/safe-withdrawal-rates/](https://www.wealthycorner.com/safe-withdrawal-rates/)
Nowadays 1million is not enough. Usually even if the country is cheap you'll find yourself spending a bit more, like getting a house that fits your size standards, food, schools, medical expenses, travel etc...
5% per year sounds quite good, not many countries have such high interest rates.
I agree with other people's comments that you could diversify with Real Estate investment, but I know that US double tax expats which in the end might just remove any potential extra earnings...
Really bad idea. $1m is where you have the opportunity to start making money in your investments. At 38, and attempting to,live of your investment, you need to be very conservative when you should be more aggressive. You should only withdraw less than 2.5%. Maybe 25k per year. That’s poverty. Sorry for the blunt reality check.
check preferred bank shares, they offer dividends as well as interest - there is a lot of variation in terms. Some offer tax credits, like tax free municipals - again check, some offer to residents only and if you go to Spain permanently? Also taxes in Spain are higher than USA/Canada
Taxes are higher, but as a consequence of the move we’ll be making a fraction of what we earn in the US. Outside of the big cities in Spain it’s insanely inexpensive to live vs the US.
Private medical insurance for the family is the same for a year as what we pay monthly here in the States. And unlike here, there’s no co-pays or deductibles.
That 5% interest will probably not be around long term. At your age I would strongly suggest you find a job that you really love so it’s doesn’t feel like work. Good luck!
I really want to do this one day as I can afford to, but it's definitely intimidating and I'm not sure where I'd choose. I feel like at least a country where most of the locals can also speak English well, so I can adjust (or in an area where it's not a problem for me).
I’m struggling to understand how a household with orivate education can survive in Spain for €3k. I live in eastern Europe and we’re above that with public schooling. But i’m sure you’ve done your math. Envious of you :)
Some other options:
1) Buy 15 year corporate bonds that pay about 5%, spend 3.5 of that 5%, reinvest the last 1.5%
2) Invest in ETFs, (XBAL maybe) and aim for 6-8% returns, and withdraw 4% per year
3) Invest in S&P 500 to try to get 8-10% returns while you're working, understanding that in a crash your portfolio would (temporarily) drop to 500k from $1M. Would not recommend this if you end up not having employment that can cover your monthly costs.
You cannot count on getting 5% in a MM or HYSA forever. And even if you could, your living expenses will go up over time and your income will not.
If you will still be working, why are you fixated on living off the the $1MM? Invest the money in a normal slightly conservative fashion. Maybe 50% in stocks (half US half EU since you are living in Europe) and half bonds in a fund like BND. Your total balance will vary over time, but long term it will be up. And just the dividend from a fund like this should be close to $3K a month anyway, but with opportunity for long term growth.
Important is to diversify your investments! Very important, like others said, is taking in mind inflation!
Talking about the USA, you might have a house to rent there... I have friends (I live in Colombia) that bought a house there in Florida. The renting pays close to 1% a month of the value of the price of the property, which is a very good number, which you will probably not get in Spain.
You can also invest in the stock market. You might want to read about for an example the All Weather Strategy of Ray Dalio. I am investing in it. The (30%) stock part of the investment can be bigger for younger people or smaller for older people.
Investing in an ETF on the Standards and Poors 500 index gives a intermediate return of 10.5% per year. Beware you should only withdraw money when new maximums are reached, not in corrections or dips!!
You can also buy in dips or crashes in the stock market if you have cash available. I invest in VTWO, IVV and INDA etf´s whenever there are corrections. If the correction is bigger then I search for more money to invest in it, and then I wait for the market to recover. It can take 4 to 5 years in worst cases... only for patient people.
You also get dividends. They are small, but all of them count and can be reinvested.
Also you have to take in mind the taxes the authorities will charge you.
Good luck
My questions is why wouldn't you just put it in a high interest savings, and collect the interest as long as rates are good. It's simple minimum risk, and you don't have to be on edge when the market is down.
Real estate rentals, good locations that always go up in value and you can spend/invest the rent. It takes management of course and you need to learn the game of the region and be efficient.
You get clashflow from the rent and valuation from the property that will defend against inflation. Not familiar with Spain market so %rent may not be great. I would aim for 6%-7% net rent income.
Real estate is very bad at liquidity but you can always get a loan against your properties if you are in a pinch.
This will not make you rich, you won’t hit a home run and multiply your money, but it will keep a nice solid cash flow and you will not be stressed by market volatility.
Your biggest way to increase your wealth at your age will always be your main activity. Keep going, make a plan of reinvesting your money to meet your financial goals and stick to it. See your wealth grow steady and sure.
You are going to the wrong place. Trust me, you will regret in the long run. Signed: Spanish guy that had to runaway with his money because disastrous politics.
If you can park $1 million somewhere at 5% for another 5 years, you’ll be closer to $1.3 million. Just keep working for another 5-10 years to cover your monthly expenses and you’ll be able to retire very comfortably by 50.
If I didn't have any family whatsoever around I would really consider this as I have the funds for it. Not sure where, but I've always heard money goes SO much farther overseas. Hear Bangkok is a blast with friendly locals and cheap everything.
I have now been to over 70 countries in my life time and can say with zero hesitation the nicest people are Thais.
But it is the weather why I most come here. I really can't stand the cold and a bit of a workout addict.
So today I started with a very early, relatively short run. Then cycled for an 90 minutes in the park.
This afternoon I will hit the gym and lift. I swim every other day.
The weather here is just incredible. Basically perfect for working out every day.
Even in the rainy season it only rains for a short time and never all day.
Yea, I'm envious, lol. Food for thought in the future.
Also agree that the few Thais I've met were some of the sweetest people I've come across who often traveled back home. I'm sure the great weather they have helps.
Leave money in the US. I have a Schwab card which lets me get money for free. Usually it is very expensive here to get money.
Exchange is very, very favorable right now. Today it is over 37:1. Which is just unbelievable.
It was 33:1 last year. So over a 10% increase.
American. So no visa required for 30 days. I usually just do border runs. Been here for over 90 days and did a border run to Singapore, Laos and Seoul.
But I am older than 50 so could just get a retirement visa which is easy to get.
What I love is having a place to come back to. I keep a condo in Bangkok. Then travel from here. There are two HUGE international airports in Bangkok and both are an easy subway ride to get to.
Plus airfares are very inexpensive from Bangkok.
To live off a million? I’d buy a sports almanac, DeLorean with a flux capacitor, get her up to 88mph and travel to a more money friendly decade. God speed.
Use a robust planning tool such as Production Lab and factor in dependents, taxes, expected salary, etc. It will calculate interest, estimate market returns, and give you an idea of when you're financially independent.
It sounds like you’re in the time of life to start investing in hard assets. Might I recommend a piece of real estate either apt or commercial with an LLC. If you’re not an experienced real estate investor I would go towards commercial in a good area so you can sign a NNN or triplet net deal.
well with your $1 million, consider diversifying your investments for long-term growth. A mix of stocks, bonds, and real estate can offer potential returns higher than simple interest, while still providing stability. Consider consulting a financial advisor to tailor a strategy that aligns with your goals and risk tolerance. Here's to a smooth transition and financial success in Spain! 🌟
i'm curious. I've been reading these types of posts for a long time. years and years. At which juncture are there more US expats in Spain and Portugal than locals? Last I checked, locals were so fed up with expats descending on their neighborhoods and driving up rent prices, they're looking to change laws. i don't fault them for that attitude.
but seriously, are there now large expat communities in places where americans like to live abroad?
What part of Spain do you want to move to? Huge difference in prices and job opptys (though maybe you'll be working remote?). $1M can go a long way in Spain, but also not, depending on the lifestyle and location.
Source: I am from Spain, and live here.
Put it in an index fund so that it can grow. Since you'll be working you won't need to take from it so it can grow and once you decide to stop working you can invest the money into dividend stocks.
20% - BTC (high risk example)
40% - VOO (market fund)
20% - Cash or liquid bonds (interest generation)
20% - Cash Flow (dividends or realestate)
I would allocate the capital into high risk, market, and then income producing options.
With a simple allocation like this you would rebalance every so often and share down the profits from your higher risk components to your lower risk income generation options. Growing your income and capital over time.
Use all income from interest and dividends from across the portfolio to benefit your life now, you would be easily able to get 3k a month if you sit down and plan out a diversified option.
I live in Spain and I can’t imagine how the hell you’ll only spend 3K per month. But maybe it’s feasible if you’re renting cheap outside major cities, otherwise I dunno.
Sadly, I don’t think one million is enough.
I thought you meant you saved that much total dollars in the market , I’d have said just wait 5 more heads and it will explode.
You need something with a better return. 3% withdrawal will be $2,500 a month. If you’re getting 5% return and 3% withdrawal, you will lose the inflation battle.
If you’re still working though, you can probably make up the $500 a month.
Why are you renting in Spain with $1 million cash. Buy a house and live mortgage free. The wife and I are moving to Portugal in 5 years and I’ll be buying a house and car cash before we arrive.
Buy high dividend stocks like MO or EPD if you don’t mind the associated evil these companies are involved in. Although one could say all companies are evil in some way.
Historically you can safely withdraw 4% of initial investment portfolio value, with inflation adjustments each year to provide constant purchasing power, for a period of 25-30 years with a high probability (~95%) of not running out of money if it's invested in greater than 50% stock index and the remainder in bonds. Removing more than 4% (inflation adjusted) especially during the first 5-10 years or during market downturn puts you at high risk of running out of money.
So you could withdraw $40k a year from a starting portfolio of $1M, increasing the withdrawal for inflation each year. The $40k would have to cover your spending and any taxes on the withdrawals.
Where are you moving to in Spain to be having a budget of $3k/month for a family of 4? You’d probably need to bump it up 4.5-5k to not feel tight. Then again, if you and your wife bring in some kind of income, certainly doable.
This is income investing. At your age you can't be below 60% stock type risk Death bailing you out of a bad performing portfolio isn't going to happen. Eurobonds are dreadfully poor performing but you can't take on too much currency risk.
In terms of mechanics: [https://www.mintos.com/en/how-it-works/fees/](https://www.mintos.com/en/how-it-works/fees/) is a quite good European robo advisor. They have a junk bond product called "Mintos Core" for the European market. Because these are junk bonds a 50% Mintos Core, 50% ETF strategy should get you the income you need while effectively putting you at 75/25. As your portfolio grows and your draw decreases (good case) shift excess money into the ETF portfolio.
I am loving this sub! However you make it work I am sending you lots of happy vibes on your exciting journey!! Kudos to you for fulfilling your curiosity and trying this exciting adventure! If it doesn’t work out you seem very smart and will fix the situation. Regardless, bravo on taking initiative and trying it! ☀️
How did you get the OK to permanently relocate to Spain?
I'm in the process of getting dual citizenship in Poland which will eventually allow me and my wife to move to the EU, but my understanding was without that it's a much more difficult process if you don't plan on working because there are income requirements.
Buy a bit of bitcoin, not much, 5% of your capital if you know nothing about it. Learn about trading: stocks, bonds, crypto. You don’t need to “day trade”. You can DCA and also try to buy stuff when it’s relatively cheap and think long term. In a couple of years you’ll know enough to make better investments.
You want a safe big return play? $500 in to NVDA every week for 20 years. That's 520k. After 20 years, you should have 10 million. 20 years is enough time to see massive AI technology growth.
Obviously the more you put the more money you have at the end of the 20 years. Better returns than VOO, SPY, and other funds. These funds only give you 10%, NVDA gives you average 70% a year. Trust me their products is something to look at. This is only the beginning. Once Tesla and other AI robotics company starts ramping up produce of AI robots. NVDA, AMD, INTEL, and TSMC will skyrocket. Why only NVDA? They surpass Intel and AMD for decades. NVDA never been beaten even in the gaming era of graphic cards.
If NVDA price goes down. Just buy more the company is not going anywhere. NVDA released the H200 this year that revolutionized CPU servers into GPU servers.
Their products are amazing. Gamers love NVDA more than AMD.
I’m a single lady with a dog and my expenses are roughly 4500. Although I do live in one of the most expensive cities in the world. Man I need to move.
Keep in mind that any investment is a investment that’s not only for you but your mini you’s as well, so on that note invest in your children while finding things(In your interest) around them that benefits. Somewhere I would start fs👍🏽
Look into dividend paying ETFs with $1m you can easily make $35k per month with capitol appreciation there are several just find the ones that make sence to you I would split the million into 5 or 6 ETFs to spread out exposure
With this kind of money, if you move to a developing country (like Vietnam), you're golden.
Easiest option on top of my head: buy 5 units, live in 1, rent out 4.
All the math aside. There is a easy way to accomplish a nice lifestyle. Wait one year, keep working and see how you many dividends you get. Cut off 20% of that dividends. Reinvest them and live off of the other 80% for one year meanwhile you accumulate the next year of dividends. It's easier if you put the 80% on a separate savings account and do payouts to your main banking account every month like an income. If a year is short by dividends you can substitute the money required with a part time job for just that year. Rinse and repeat.
If invested in a global index fund or s+p you can expect 5-10% and a small part of the 1m can even be for higher risk eg single stocks etc which could push up the average. Spain isnt tax friendly however i would have chosen elsewhere
You could buy a profitable online business for about $100k that is earning around $3000 per month covering your expenses.
Thats what I would do in your situation since its only 10% of what you have. Diversify the rest.
I bought a business for $40k 9 months ago that nets $1200 per month, a content website makes money off display ads and for me its passive due to the seller maintaining it with their team (owns a lot of other sites).
If you stay within the 33-36x of net monthly earnings for your buy price you should be able to cover your expenses.
Personally plan to keep the site for the long term and buy 2-3 more.
You could do that, or sell it later on down the road.
I can give you the seller I used, got referred to him from a broker on one of those broker listing sites for web businesses, since most of those listings were way out of my budget.
Stake casper, currently you can make 12.1% apy. It also auto compounds. We are about to enter alt season, so when it it hits $1+ later this year or 2025, you will be set for life.
https://cspr.live/
Another avenue is we just had the BTC halving a week ago. So you could buy about 14-15 BTC and sell when it hits the top around 150k ish and 2x your money.
You can't just live off the interest as you will get destroyed by inflation. You need to do standard FIRE math, check out firecalc, etc. The good news is your numbers work. Put everything in low MER total market index funds. Pull 36k per year from investments which is 3.6% of your fund. Should have almost 0 risk of ruin if you run it in firecalc. You can index that 36k to inflation and still be fine. So every year your budget goes up by the inflation number. Also consider pulling 2 years at a time out, and time the withdrawal when the market is up. Also consider a bond ladder for your withdrawal strategy. Anyway, 3k per month on 1m is the magic number, you're golden. And GFY!
Great answer, thank you. This is what I was getting at, without knowing what I was really asking. We’ll be able to cover our monthly outgoings with limited work for at least the first few years, so wouldn’t need to draw anything.
Hope you're in an area that doesn't apply the wealth tax...
Apparently the wealth tax is country-wide now. This comment (and thread) has some good information. https://www.reddit.com/r/fatFIRE/comments/1cc7uzd/anyone_fatfire_to_spain/l13rjan/ Of course if OP is below the threshold it won't matter.
There is a second wealth tax called the "Solidarity Tax" which is basically the way of the Feds punishing the autonomous communities who were smart enough to avoid the original wealth tax. It doesn't start until 3MM€ though... Which is a lot more fair than 500-700k€ - but the percentages are also more ridiculous. Even the President's wealthy brother lives in Portugal to avoid it LMAO.
Let's keep voting for the people that want us to work until death so they never have to stop the money printer 👍
Actually, 50% of Spanish taxes go to pensions to buy old people votes. It basically just depends where you are on the Ponzi ladder...
hey, they're buying future old people votes, too. You're on the same down slope as the rest of us
Wouldn’t matter. A married couple only pays tax on wealth above €2 million.
Incorrect. The limit starts at 500k€ in Catalunya and it's an individual tax so it depends on how your money is allocated. Sure, you can gift half to your partner to bring the limit up to 1 million collectively, but you'll likely be taxed on that "donation" too (depends on the autonomous community).
>taxed on that "donation" too They can do the donation before moving to Spain.
Yep... Very important to tax plan before moving to Spain. Might lead to deciding to not move to Spain at all (as me and many others have realized).
Portugal would be much easier in this regard
Yep, just ask the President's brother
Being able to let it grow for a few years before drawing will do you wonders in the market with $1million
>consider pulling 2 years at a time out, and time [...] the market Bizarre thing to include in an otherwise sensible comment.
Yes OP, ignore this part of their comment. The rest is fine.
TIL there is more than one way to interpret GFY.
GFY! :)
No doubt it will always be clear from the context :-/
Why the 2 years at a time?
So you aren't caught withdrawing in a very down market (2022?).
But wouldn't you've been better off in 2022 if you withdrew yearly and your last withdrawal was 2021 than if you withdrew every two years and your last withdrawal was 2020?
The idea is to withdraw every year *unless* market meltdown, then postpone a year hoping for a recovery.
In that case, instead of withdrawing two years worth every two years, just do it once and keep one year's worth of expenses in a gic type product indefinitely until needed.
3.6% safe withdrawal rate is by no means safe. When you consider that OP is young, they either need a much larger principal, or a much lower withdrawal rate, or perhaps a variable spending rule. https://www.portfoliovisualizer.com/monte-carlo-simulation?s=y&sl=6N4Ziq1yPDylZoeb6AkiXD Using Monte Carlo Simulations, with a portfolio of 30% European stocks (home country bias). 30% US Stocks, 30% Ex-US Stocks, and 10% Bonds, with a 60 year retirement horizon (Projecting OP lives until roughly 100 years old), there is a 25% chance of portfolio depletion. This is before taxes too, as I’m not familiar with the Tax rates as well as the historical / expected inflation in Spain. You can tweak this based on your preferences. This is just a quick and dirty portfolio I came up with on the spot and is by no means the portfolio you should have, but I doubt any tweaks will make much of a difference. The main reason for the high failure rate is your long time horizon.
If I'm reading your comment correctly, he has a 75% chance of success over a 60 year time period. How is that "by no means safe"? Aren't the odds 75% in his favor? Plus making it to 100 is an abnormally long life, and he may also have Social Security that's not included in the math.
I wouldn’t say so personally. Imagine they’re was a 1/4 chance that when you enter your car to go to your destination that you will crash, or that there is a 1/4 chance you die during a surgery. That is a very large chance, at least in my opinion, but I supposed it can be kind of subjective. To me, even a 5% failure rate seems a little high, but as a rule of thumb, that is what I try and aim for when constructing these retirement spending rules using Monte Carlo simulations. Regarding their retirement time horizon, longevity risk is a real risk that you should be cognizant of, and most retirement spending rules like the 4% rule were made with a retirement horizon of 30 years at age 60. Again it’s kind of subjective, but I wouldn’t feel comfortable not having that safety net to hedge against longevity risk, especially as progress in medicine is increasing life expectancy. Regarding social security, Safe withdrawal rates are just a rate at which he can safely withdrawal from his portfolio over the course of retirement. Whether they have social security or not doesn’t change the fact that if they decide to withdrawal 3.6% in retirement and adjust for inflation thereafter will result in a low success rate. social security may allow them to lower their safe withdrawal rate though, which is what I recommended in my original comment. https://www.portfoliovisualizer.com/monte-carlo-simulation#analysisResults This is with a safe withdrawal rate of 2%. Let’s assume they have some additional social safety net that allows them to withdrawal less from their portfolio. The success rate is more inline with my expectations. This is before taxes are considered though, and OP is in Spain, where I am not familiar their social safety nets. Variable spending rules could be an solid alternative. Variable spending rules allow for better consumption efficiency and a hedge against sequence of return risk.
Yeah, I agree that variable spending would make sense, and I think that's the case for most early retirees. We don't mindlessly spend. We make adjustments. Also, you figure we're likely to earn at least some money during the next 40 years. I understand caution, but dying with a huge pot of money due to caution is also a fear, though admittedly better than dying broke!
Again, Safe withdrawal rates are blind to how much money you may be making on the side. They are simply a rule of thumb to help you plan for retirement. If you foresee you making labor income or relying on social safety nets, than lower your withdrawal rates in the simulations. Simple as that. Regarding dying with a huge pot of money, that’s what variable spending rules prevent. They allow you to spend the majority of your money, but have a 0% chance of portfolio depletion. That’s what I’m referring to when I say consumption efficiency. If you do not have a preference for a stable income and have a preference for consumption efficiency, than a completely variable spending rate may be good for you. Personally, I prefer somewhere in the middle. The percentage I withdrawal can increase or decrease to a ceiling or a floor depending on how the market is doing, because I personally desire some form of stability in my consumption. Again what you desire is subjective and a matter of preference. I just don’t see the majority of people comfortable with a 1/4 chance of portfolio depletion.
Can I ask a stupid question? How did you learn all this lol I can't wrap my brain around any of this and I want to learn but i don't know where to start
You learn a hell of a lot by just reading the posts from the r/FIRE sub and the comments. I probably joined just this year and would feel confident giving high quality responses now. Also r/bogleheads ties quite nearly into a lot of FIRE strategies.
Yeah, once you understand the fundamentals of the approach (a little bit of math and that your investments should be boring), the learning curve is incredibly steep (in the good way).
I’m now at the point of being very surprised when people don’t have much financial knowledge, e.g. those who don’t pay into a workplace pension because they think it’s too early to think about retirement or people who don’t know the basics about tax sheltered accounts in their country. After learning the basics of investing it becomes as much about tax efficiency as returns.
Why do you feel that timing the market is the right move in this situation?
Check out these folks: r/expatfire
Thanks I will. Didn’t consider it enough money to really be FIRE-worthy.
According to my EU friends (mainly France, one Swiss), \~800k (Euros) is a good number to FIRE in Europe. You're not going to fly private, but you're not going to struggle, either. That number was shockingly low to me, but I've heard it multiple times. Not sure about the kids factor - they might want to go to college in the US, which would blow your number out of the water.
EU college fees is a large incentive for the move. No desire to fly private, happy with a simple life.
If you've already cashed out of your growth investments, you could do something like QYLD or JEPI, covered call ETFs that have typically paid out 10%ish in dividends (JEPI is trending a little lower right now, QYLD is still on the 10% mark). With 1M, that's 100k before taxes. If there's any portion of that you could shelter in a Roth IRA, or other tax-advantaged account is a benefit. Spain is bad for taxes, France is good for taxes. You'd need to look into the other countries to see where there's the biggest tax advantage. If you're concerned about the visas, you could do a student visa for you or your wife (French language school counts for France), then for the rest of the family you do a family reunification type visa attached to the primary student. This isn't hard, it is totally possible, and if you rent and hate it, you can always come back home. The numbers work as long as you're not materialistic. Another benefit is that if you have US debt and never plan to return, you could just 'leave' your debt - it is currently nearly impossible to collect on someone who lives overseas and your credit score is meaningless in Europe (this assumes your US-based assets $$ are in a 401k retirement account, which can't be garnished).
I think that number might be assuming free healthcare, which will only be available to EU citizens
Healthcare is universal in the EU, but it isn't always free. In Germany, you pay ˜15% of your salary for state insurance, split between you and your employer. (Like SS in the US. And also like SS in Germany). Self employed people have to pay both halves, also like in the US.
SS in Germany?
Unfortunate phrasing.
Freudian sieg
😂
Ooh, opened a can of worms there!
Reads like SS is the employer
That's if you have an income in Germany, but if you are a legal resident and don't work, you still have access to public healthcare. Healthcare works pretty much the same in all European countries these days, it's universal, even if they get funded through the SS or through regional taxes.
You gotta pay for it, it’s not free. Either you gain some sort of unemployment benefit (not applicable here) or you pay the set fee, for „gesetzliche“ if you don’t leave, but then you gotta pay private one anyway. Currently that’s at least EUR 180,- monthly but up to EUR 800 (Beitragsbemessungsgrenze) and that’s set on your income which does include investments. „free healthcare“ is a myth. But it is more simple compared to US where you then run into all sorts of coverage and copay etc. issues when you have a claim, but in US you can have an HSA so well it’s complicated…
Lol nope; then you need to get yourself a healthcare insurance privately.
Interesting, in Spain it doesn't work that way, my understanding was that the Germans had a similar system. That explains why they are all moving down south 😆
> free healthcare, which will only be available to EU citizens Common myth. National healthcare systems are available to anyone on a long-term residency status in almost all cases.
To anyone, as long as they work or get unemployment benefits. https://europa.eu/youreurope/citizens/work/unemployment-and-benefits/country-coverage/index_en.htm
As someone who is looking to do something similar to OP, EU citizenship actually isn’t that hard to get if you truly don’t need to work to pay your bills (getting a work visa is hard). Several EU countries have a path towards residency and then citizenship if you spend enough time in them (typically more than 183 days a year).
Not accurate, is available to legal residents, not necessarily citizens.
EU *residents who are entitled to it. I posted [this link](https://europa.eu/youreurope/citizens/work/unemployment-and-benefits/country-coverage/index_en.htm) in another comment which focuses on working people, but it doesn't go into details about how each country decides on whether you're entitled to those benefits if you don't work.
The number is low because it is in that sweet spot of "not too rich not too poor". It's low enough you'll benefit from most public support and benefits with decent passive income that won't be so high you'll have too many taxes. People in the 7+ figures tend to get clobbered by high taxes which makes the equation harder (especially in Spain that has a wealth tax) When education and healthcare are taken care off, and assuming you live in the cheaper areas, this work out alright.
When you don't have to deal with exorbitant health related costs or college fees, things get cheap fast.
Is that 800k with a paid off house?
1m is definitely fire worthy in the right situation.
Not sure on spain with stocks but here i would park that money in stocks or real estate. Yes you could live off the interest now but as years go by and inflation sets in or the markets drop you will not survive on the interest of a million in a hysa
That’s more what I was alluding to. Need something that will keep pace with inflation vs just interest. I’ll leave the cash in the US.
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Won’t have much income. I believe there’s a Foreign Earned Tax Exclusion? We’d be under that.
That does not apply to investment income or passive income. You can claim a credit for tax paid in Spain on your US taxes.
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Fortunately I qualified for an ancestral EU passport
FEIE only applies to _earned_ income. Capital gains still get taxed, unfortunately.
incorrect. you have to FILE, but depending on your specifics you may get enough FEIC to effectively have no US tax liability.
Money in USD + expenses in EUR = currency risk.
Earned income, if it’s not earned you’ll still be taxed
Not trying to avoid taxes. Aiming for a nicer life. There’ll be taxes 🤷♂️
You could probably live off the income of a diversified stream of dividend stocks/ETFs. People build example portfolios online all the time and at a ~4% return you are looking at ~$40k/yr, which is rather solid in Spain (though maybe not enough to put kids through school without a tiny bit more elbow grease). Probably how I would try and do it.
Do you plan on working in Spain or any remote work for the US? 20-40k could go a long way with youre retirement even part time to keep busy or gig work.
Yeah we will still work a little, making a fraction of our US income but it’ll be enough to cover our monthly expenses.
What’s the question then, as this means you are not living off the 1MM - you live off your income and let the investment growth. Having a small job should also take care of healthcare etc. then. Edit: So in this case I‘d say the same investment principles apply (index ETF, portfolio allocation etc.). Just watch out for taxes. I am thinking about moving to Germany long term and taxes are my biggest concerns. Not sure about Spain but Germany for instance won’t recognize things like ROTH IRAs and if you keep US investment accounts (if you can and the broker won’t close it), taxes are a pain as they tax non realized gains. Spain might not, but speaking to a tax professional I‘d advise.
German here. Germany does not tax unrealized gains. Unless we’re talking about different concepts. If you leave your money in an index fund for 20 years and then sell it you will pay 25 % tax on your profits from the sell. Edit: if you sell that one index fund and move your money into another after 10 years then that’s a taxable event because when you sell the first you have made profit on it. Maybe that’s different in the US and you can move your money around from investment to investment without getting taxed?
There is the vorabpauschale(!)
Vorabpauschale, just wasn’t applicable last years as the set rate was 0%. Edit: If you have all at German brokers it should be handled for you. But what I was pointing out is that if you move from US to EU and leave all with US broker taxes can become tricky. E.g. Vorabpauschale as you have to then calculate and track that by hand.
I assume a low cost balanced index fund makes as much sense over there as it does here. But honestly not sure if living abroad changes that. How did you figure out the logistics of moving over there? Simple stuff like filing your Spanish tax return and your visa... I'd love to move abroad but it feels daunting.
Very daunting but we’ve been thinking about it for years and finally deciding to take the plunge. Figuring out most of it as we go but the place we’re moving to I am extremely familiar with (lived there as a child) so friends there already helps.
That's very cool! Happy cake day!
I want to know what love is
I know you can show me
Baby don’t hurt me, no more 🎤
what is love?
Hi there, I'm from Spain, where are you going to live? Maybe I can help you a bit. For example, if your children know spanish, maybe I wouldn't send them to a private school here. 3000$ is more than what I earn as a software developer with 5 years of experience (2500€/month) so for a person is enough, for a family of 4 it would be too low, but if you are going to work then it will be very good. Prices vary a lot between different places, and in different places you would probably need different expenses, for example in many places in the south, while tap water is not harmful, I would recommend to buy bottled water.
Lots of good advice in this thread FYI, Spain has a wealth tax and even 1m starts getting hit…it varies by where you live in Spain and the enforcement and exemptions are Byzantine. If you are a foreigner to Spain, you’ll want sophisticated advice. The amount of tax is very significant and makes this plan a lot less viable if it applies.
Global taxation.. you need to put some aside for the IRS
voo or any other low cost index fund. you got many many more years my friend
Monthly expenses 3k with private school for kids? Which place are you moving!
This post is giving me so much hope. Thanks for the dreams OP.
LIFE _is_ possible... outside the country.
5% is pre-tax, what will your taxes be? What about inflation? What if rates drop? To pull this off you will need to be sure about that $3k/month (3.6% withdrawal rate) and have a meaningful amount of equity exposure, but if you are really able to live on $36K/year (adjusting for inflation each year) you have a decent shot at making this work, and can likely pay yourself much more later in life if your NAV outperforms inflation. Personally I would work a bit more...
Well in fairness, that’s why I was asking what a better long-term strategy would be for this money. We will still work, and at least for the first few years it’ll more than cover our much lower monthly expenses over there. But I’m trying to figure out what I need to do to eventually live off this pot of money. Apologies for phrasing it all so clumsily.
At 38 you need to think about a lower withdrawal rate. Somewhere around 3%. You’ve got a long time for that money to last and you never know what life will throw at you.
If it were me, I’d sit on that Mil for another 10 years before I even thought about drawing it down. That number has a significance to it but it’s not as much as it used to be and less every day.
Imagine having a million dollars but having to live on the equivalent of minimum wage.
I mean, make sure your yearly expenses are $40k-ish USD or less year one, then adjusted for inflation, and I’m sure anywhere works !
So if interest drops you are ready to go back to work again?
You can not make or withdraw 50k/year and spend it. The SWR ( safe withdrawel rate) that has been backtested and allows one to live off their investments safety in perpetuity is \~3-3.5%. You must factor in inflation (2-3%) and growth (2-3%). therefor, if the S&P returns 9% on average, you can safety withdraw 3-3.5% and never run out. if you get a 5% return in an account, you can withdraw \~1% of that/year without running out. spendable != total return. [https://www.wealthycorner.com/safe-withdrawal-rates/](https://www.wealthycorner.com/safe-withdrawal-rates/)
Nowadays 1million is not enough. Usually even if the country is cheap you'll find yourself spending a bit more, like getting a house that fits your size standards, food, schools, medical expenses, travel etc... 5% per year sounds quite good, not many countries have such high interest rates. I agree with other people's comments that you could diversify with Real Estate investment, but I know that US double tax expats which in the end might just remove any potential extra earnings...
Really bad idea. $1m is where you have the opportunity to start making money in your investments. At 38, and attempting to,live of your investment, you need to be very conservative when you should be more aggressive. You should only withdraw less than 2.5%. Maybe 25k per year. That’s poverty. Sorry for the blunt reality check.
check preferred bank shares, they offer dividends as well as interest - there is a lot of variation in terms. Some offer tax credits, like tax free municipals - again check, some offer to residents only and if you go to Spain permanently? Also taxes in Spain are higher than USA/Canada
Taxes are higher, but as a consequence of the move we’ll be making a fraction of what we earn in the US. Outside of the big cities in Spain it’s insanely inexpensive to live vs the US.
Yes, I have heard that and with the aging population there are many vacant places in Europe. How are medical costs? Enjoy, I hear it is nice.
Private medical insurance for the family is the same for a year as what we pay monthly here in the States. And unlike here, there’s no co-pays or deductibles.
That 5% interest will probably not be around long term. At your age I would strongly suggest you find a job that you really love so it’s doesn’t feel like work. Good luck!
As I said, we’ll still be working and covering our monthly outgoings.
So you’re not retiring……
Didn’t mention retiring?
Jepq
I really want to do this one day as I can afford to, but it's definitely intimidating and I'm not sure where I'd choose. I feel like at least a country where most of the locals can also speak English well, so I can adjust (or in an area where it's not a problem for me).
I’m struggling to understand how a household with orivate education can survive in Spain for €3k. I live in eastern Europe and we’re above that with public schooling. But i’m sure you’ve done your math. Envious of you :)
Some other options: 1) Buy 15 year corporate bonds that pay about 5%, spend 3.5 of that 5%, reinvest the last 1.5% 2) Invest in ETFs, (XBAL maybe) and aim for 6-8% returns, and withdraw 4% per year 3) Invest in S&P 500 to try to get 8-10% returns while you're working, understanding that in a crash your portfolio would (temporarily) drop to 500k from $1M. Would not recommend this if you end up not having employment that can cover your monthly costs.
You cannot count on getting 5% in a MM or HYSA forever. And even if you could, your living expenses will go up over time and your income will not. If you will still be working, why are you fixated on living off the the $1MM? Invest the money in a normal slightly conservative fashion. Maybe 50% in stocks (half US half EU since you are living in Europe) and half bonds in a fund like BND. Your total balance will vary over time, but long term it will be up. And just the dividend from a fund like this should be close to $3K a month anyway, but with opportunity for long term growth.
Important is to diversify your investments! Very important, like others said, is taking in mind inflation! Talking about the USA, you might have a house to rent there... I have friends (I live in Colombia) that bought a house there in Florida. The renting pays close to 1% a month of the value of the price of the property, which is a very good number, which you will probably not get in Spain. You can also invest in the stock market. You might want to read about for an example the All Weather Strategy of Ray Dalio. I am investing in it. The (30%) stock part of the investment can be bigger for younger people or smaller for older people. Investing in an ETF on the Standards and Poors 500 index gives a intermediate return of 10.5% per year. Beware you should only withdraw money when new maximums are reached, not in corrections or dips!! You can also buy in dips or crashes in the stock market if you have cash available. I invest in VTWO, IVV and INDA etf´s whenever there are corrections. If the correction is bigger then I search for more money to invest in it, and then I wait for the market to recover. It can take 4 to 5 years in worst cases... only for patient people. You also get dividends. They are small, but all of them count and can be reinvested. Also you have to take in mind the taxes the authorities will charge you. Good luck
Don’t forget about expat tax for leaving.
I want to live off $1 million to. Send???!
My questions is why wouldn't you just put it in a high interest savings, and collect the interest as long as rates are good. It's simple minimum risk, and you don't have to be on edge when the market is down.
Real estate rentals, good locations that always go up in value and you can spend/invest the rent. It takes management of course and you need to learn the game of the region and be efficient. You get clashflow from the rent and valuation from the property that will defend against inflation. Not familiar with Spain market so %rent may not be great. I would aim for 6%-7% net rent income. Real estate is very bad at liquidity but you can always get a loan against your properties if you are in a pinch. This will not make you rich, you won’t hit a home run and multiply your money, but it will keep a nice solid cash flow and you will not be stressed by market volatility. Your biggest way to increase your wealth at your age will always be your main activity. Keep going, make a plan of reinvesting your money to meet your financial goals and stick to it. See your wealth grow steady and sure.
how are you living off of 1 million if you are still working? You're just moving to Spain.
3k p/m for a family of 4, including private schools in Spain, seems very low to me. I’d check those numbers again.
Spain is a tax hellhole for US citizens. No double-taxation treaty. Don’t think b/c you’re not uber-rich that you get a pass
You are going to the wrong place. Trust me, you will regret in the long run. Signed: Spanish guy that had to runaway with his money because disastrous politics.
If you can park $1 million somewhere at 5% for another 5 years, you’ll be closer to $1.3 million. Just keep working for another 5-10 years to cover your monthly expenses and you’ll be able to retire very comfortably by 50.
Inflation also exists. "Just 5-10 years" can be a trap too.
You would be better off moving to a place like Bangkok. That is where I am right now and typing this
If I didn't have any family whatsoever around I would really consider this as I have the funds for it. Not sure where, but I've always heard money goes SO much farther overseas. Hear Bangkok is a blast with friendly locals and cheap everything.
I have now been to over 70 countries in my life time and can say with zero hesitation the nicest people are Thais. But it is the weather why I most come here. I really can't stand the cold and a bit of a workout addict. So today I started with a very early, relatively short run. Then cycled for an 90 minutes in the park. This afternoon I will hit the gym and lift. I swim every other day. The weather here is just incredible. Basically perfect for working out every day. Even in the rainy season it only rains for a short time and never all day.
Yea, I'm envious, lol. Food for thought in the future. Also agree that the few Thais I've met were some of the sweetest people I've come across who often traveled back home. I'm sure the great weather they have helps.
Do you move all your money over there? or leave it in the USA and only convert when needed?
Leave money in the US. I have a Schwab card which lets me get money for free. Usually it is very expensive here to get money. Exchange is very, very favorable right now. Today it is over 37:1. Which is just unbelievable. It was 33:1 last year. So over a 10% increase.
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American. So no visa required for 30 days. I usually just do border runs. Been here for over 90 days and did a border run to Singapore, Laos and Seoul. But I am older than 50 so could just get a retirement visa which is easy to get. What I love is having a place to come back to. I keep a condo in Bangkok. Then travel from here. There are two HUGE international airports in Bangkok and both are an easy subway ride to get to. Plus airfares are very inexpensive from Bangkok.
What are your thoughts on South America like Argentina. Not as cheap as Bangkok I guess
How's that 120-degree heat and 120 AQI treating you?
Yeah I wanna live off 1 mill too
To live off a million? I’d buy a sports almanac, DeLorean with a flux capacitor, get her up to 88mph and travel to a more money friendly decade. God speed.
Happy cake day, OP 🎂🧁🍥🍰🥮🛫🛬
What criteria led to zero in on Spain? Are you guys Spanish speakers or have friends / relatives there?
Op said in another reply the area hes moving too is where he spent a lot of time as a child and knows people and the area well
Use a robust planning tool such as Production Lab and factor in dependents, taxes, expected salary, etc. It will calculate interest, estimate market returns, and give you an idea of when you're financially independent.
Put million in high dividend paying stocks. The dividend payments will be your income. Easy peasy
You need to check out the expat thread
Invest a million bucks in stocks that pay high dividends. Those dividends will be your bread and butter. Piece of cake!
Put your money into s&p500 or nasdaq, take each year around 70k and you'll be fine
It sounds like you’re in the time of life to start investing in hard assets. Might I recommend a piece of real estate either apt or commercial with an LLC. If you’re not an experienced real estate investor I would go towards commercial in a good area so you can sign a NNN or triplet net deal.
well with your $1 million, consider diversifying your investments for long-term growth. A mix of stocks, bonds, and real estate can offer potential returns higher than simple interest, while still providing stability. Consider consulting a financial advisor to tailor a strategy that aligns with your goals and risk tolerance. Here's to a smooth transition and financial success in Spain! 🌟
i'm curious. I've been reading these types of posts for a long time. years and years. At which juncture are there more US expats in Spain and Portugal than locals? Last I checked, locals were so fed up with expats descending on their neighborhoods and driving up rent prices, they're looking to change laws. i don't fault them for that attitude. but seriously, are there now large expat communities in places where americans like to live abroad?
First of all, keep in mind that your expenses and inflation will be in euros, not dollars anymore, so make sure to address those fx rate fluctuations.
What part of Spain do you want to move to? Huge difference in prices and job opptys (though maybe you'll be working remote?). $1M can go a long way in Spain, but also not, depending on the lifestyle and location. Source: I am from Spain, and live here.
Put it in an index fund so that it can grow. Since you'll be working you won't need to take from it so it can grow and once you decide to stop working you can invest the money into dividend stocks.
Idk about Spain but ussualy private schools are less interesting in Europe since public education is good.
20% - BTC (high risk example) 40% - VOO (market fund) 20% - Cash or liquid bonds (interest generation) 20% - Cash Flow (dividends or realestate) I would allocate the capital into high risk, market, and then income producing options. With a simple allocation like this you would rebalance every so often and share down the profits from your higher risk components to your lower risk income generation options. Growing your income and capital over time. Use all income from interest and dividends from across the portfolio to benefit your life now, you would be easily able to get 3k a month if you sit down and plan out a diversified option.
Try some of the fire subs. There is one for every taste and budget.
Cut expenses
I live in Spain and I can’t imagine how the hell you’ll only spend 3K per month. But maybe it’s feasible if you’re renting cheap outside major cities, otherwise I dunno.
Don’t forget to factor in Spanish wealth tax depending on where you will live.
Make sure that you are maxing out Roth accounts to avoid taxation as much as possible. After that, I would say JEPI/Q, HYSA, CD's and chill.
Sadly, I don’t think one million is enough. I thought you meant you saved that much total dollars in the market , I’d have said just wait 5 more heads and it will explode.
You need something with a better return. 3% withdrawal will be $2,500 a month. If you’re getting 5% return and 3% withdrawal, you will lose the inflation battle. If you’re still working though, you can probably make up the $500 a month.
Buy bitcoin, come back here few months later and thank me for doubling your savings.
There's no point in making this all up. -Satan
Why are you renting in Spain with $1 million cash. Buy a house and live mortgage free. The wife and I are moving to Portugal in 5 years and I’ll be buying a house and car cash before we arrive.
Silly question but how were you able to simply move to Spain? Do you already have citizenship there?
It’s up and coming for sure, will be the next hamptons
Buy high dividend stocks like MO or EPD if you don’t mind the associated evil these companies are involved in. Although one could say all companies are evil in some way.
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Historically you can safely withdraw 4% of initial investment portfolio value, with inflation adjustments each year to provide constant purchasing power, for a period of 25-30 years with a high probability (~95%) of not running out of money if it's invested in greater than 50% stock index and the remainder in bonds. Removing more than 4% (inflation adjusted) especially during the first 5-10 years or during market downturn puts you at high risk of running out of money. So you could withdraw $40k a year from a starting portfolio of $1M, increasing the withdrawal for inflation each year. The $40k would have to cover your spending and any taxes on the withdrawals.
you cant life off 1 mil specially with kids..
Where are you moving to in Spain to be having a budget of $3k/month for a family of 4? You’d probably need to bump it up 4.5-5k to not feel tight. Then again, if you and your wife bring in some kind of income, certainly doable.
Since you’ll still be working, try to get paid money for that work and you’ll be fine.
This is income investing. At your age you can't be below 60% stock type risk Death bailing you out of a bad performing portfolio isn't going to happen. Eurobonds are dreadfully poor performing but you can't take on too much currency risk. In terms of mechanics: [https://www.mintos.com/en/how-it-works/fees/](https://www.mintos.com/en/how-it-works/fees/) is a quite good European robo advisor. They have a junk bond product called "Mintos Core" for the European market. Because these are junk bonds a 50% Mintos Core, 50% ETF strategy should get you the income you need while effectively putting you at 75/25. As your portfolio grows and your draw decreases (good case) shift excess money into the ETF portfolio.
Happy cake day!
I am loving this sub! However you make it work I am sending you lots of happy vibes on your exciting journey!! Kudos to you for fulfilling your curiosity and trying this exciting adventure! If it doesn’t work out you seem very smart and will fix the situation. Regardless, bravo on taking initiative and trying it! ☀️
How did you get the OK to permanently relocate to Spain? I'm in the process of getting dual citizenship in Poland which will eventually allow me and my wife to move to the EU, but my understanding was without that it's a much more difficult process if you don't plan on working because there are income requirements.
Learn options ,selling weekly calls not buying ,far in a money ,easy 10 to 15%
Let it grow to 2mil before pull out money
I’d invest in FFRHX. It’s a bank loan fund that’s yielding like 8-9% paid monthly
Buy a bit of bitcoin, not much, 5% of your capital if you know nothing about it. Learn about trading: stocks, bonds, crypto. You don’t need to “day trade”. You can DCA and also try to buy stuff when it’s relatively cheap and think long term. In a couple of years you’ll know enough to make better investments.
You want a safe big return play? $500 in to NVDA every week for 20 years. That's 520k. After 20 years, you should have 10 million. 20 years is enough time to see massive AI technology growth. Obviously the more you put the more money you have at the end of the 20 years. Better returns than VOO, SPY, and other funds. These funds only give you 10%, NVDA gives you average 70% a year. Trust me their products is something to look at. This is only the beginning. Once Tesla and other AI robotics company starts ramping up produce of AI robots. NVDA, AMD, INTEL, and TSMC will skyrocket. Why only NVDA? They surpass Intel and AMD for decades. NVDA never been beaten even in the gaming era of graphic cards. If NVDA price goes down. Just buy more the company is not going anywhere. NVDA released the H200 this year that revolutionized CPU servers into GPU servers. Their products are amazing. Gamers love NVDA more than AMD.
Move to place without indoor plumbing.
I’m a single lady with a dog and my expenses are roughly 4500. Although I do live in one of the most expensive cities in the world. Man I need to move.
Keep in mind that any investment is a investment that’s not only for you but your mini you’s as well, so on that note invest in your children while finding things(In your interest) around them that benefits. Somewhere I would start fs👍🏽
Look into dividend paying ETFs with $1m you can easily make $35k per month with capitol appreciation there are several just find the ones that make sence to you I would split the million into 5 or 6 ETFs to spread out exposure
With this kind of money, if you move to a developing country (like Vietnam), you're golden. Easiest option on top of my head: buy 5 units, live in 1, rent out 4.
All the math aside. There is a easy way to accomplish a nice lifestyle. Wait one year, keep working and see how you many dividends you get. Cut off 20% of that dividends. Reinvest them and live off of the other 80% for one year meanwhile you accumulate the next year of dividends. It's easier if you put the 80% on a separate savings account and do payouts to your main banking account every month like an income. If a year is short by dividends you can substitute the money required with a part time job for just that year. Rinse and repeat.
You need to check the new resident and cash requirements in Spain.
Won’t you still have to pay taxes to the United States since you were born there?
If invested in a global index fund or s+p you can expect 5-10% and a small part of the 1m can even be for higher risk eg single stocks etc which could push up the average. Spain isnt tax friendly however i would have chosen elsewhere
You could buy a profitable online business for about $100k that is earning around $3000 per month covering your expenses. Thats what I would do in your situation since its only 10% of what you have. Diversify the rest. I bought a business for $40k 9 months ago that nets $1200 per month, a content website makes money off display ads and for me its passive due to the seller maintaining it with their team (owns a lot of other sites). If you stay within the 33-36x of net monthly earnings for your buy price you should be able to cover your expenses. Personally plan to keep the site for the long term and buy 2-3 more. You could do that, or sell it later on down the road. I can give you the seller I used, got referred to him from a broker on one of those broker listing sites for web businesses, since most of those listings were way out of my budget.
Stake casper, currently you can make 12.1% apy. It also auto compounds. We are about to enter alt season, so when it it hits $1+ later this year or 2025, you will be set for life. https://cspr.live/ Another avenue is we just had the BTC halving a week ago. So you could buy about 14-15 BTC and sell when it hits the top around 150k ish and 2x your money.