Author Topic: Investment strategy after house sale?  (Read 968 times)

Linea_Norway

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Investment strategy after house sale?
« on: August 20, 2018, 07:26:39 AM »
Hi.

I would like to hear your ideas on how to invest after our house sale.

To make calculations easy, I divide my local currency by 10, which puts it more or less in the correct ballpark.

Current assets:
300.000 USD in index funds.
  30.000 USD on bank account with 2% interest. There is no higher % available.
800.000 USD invested in a clown house. We hope to sell it for a higher price, but I am not sure we will get it.
  80.000 USD invested in a cabin that we intend to keep.
2 old cars.
2 pension funds that we can't touch until 2040.

We plan to sell the house in 2019 or 2020 to free up money to use for FIRE. I need roughly 700.000 USD generating 4% per year to start FIRE in 2020. We will also need to buy a place to live in, or rent a place. I intend to buy another house in the future that costs between 150.000 - 400.000 USD.
Our yearly spending budget during FIRE is set to 50.000 USD a year. We will need to generate this amount from 2019/2020 until 2040. From 2040 both of us will receive a pension that should cover our needs.

My plan is to keep the current stash in index funds.
Half of the sales sum for the house should be reserved for buying another house within few years. I think we should it in bonds until we need it, because I don't want it to go down in value during a crash.
The other half should perhaps be put in index funds, with an exception of 2-3 years of savings. Those savings should be our source of income in case of a stock market crash. Should this be on a high interest account? Or are bonds also reliable?
Should I put much more money in bonds? My bank recommends 30-40% in bonds. Do bonds keep their value or can they also loose a lot of value on short term?

talltexan

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Re: Investment strategy after house sale?
« Reply #1 on: August 20, 2018, 07:44:17 AM »
I don't know a lot about the local bond market in your country.

However, it sounds as though you are within 24 months of retirement. Having a stake in bonds makes sense because you are at a very fragile period should the market nose-dive.

Linea_Norway

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Re: Investment strategy after house sale?
« Reply #2 on: August 20, 2018, 11:42:49 AM »
I don't know a lot about the local bond market in your country.

However, it sounds as though you are within 24 months of retirement. Having a stake in bonds makes sense because you are at a very fragile period should the market nose-dive.

The closest thing to bonds I have found in Norway is "Rentefond" (interest funds). I think it is a combination of loans provided to countries and big companies, all with a minimum credit rate that is pretty good.

talltexan

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Re: Investment strategy after house sale?
« Reply #3 on: August 21, 2018, 07:25:48 AM »
Based on your username, are you in Chile?

The economic forecast for Chile is excellent over the next few years, including 3.6% real GDP growth (http://www.oecd.org/economy/chile-economic-forecast-summary.htm). Do you have a strategy for increasing your income? It's possible that one more strategic job change can add additional income and ease your cash flow situation.

Linea_Norway

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Re: Investment strategy after house sale?
« Reply #4 on: August 21, 2018, 10:48:12 AM »
Based on your username, are you in Chile?

The economic forecast for Chile is excellent over the next few years, including 3.6% real GDP growth (http://www.oecd.org/economy/chile-economic-forecast-summary.htm). Do you have a strategy for increasing your income? It's possible that one more strategic job change can add additional income and ease your cash flow situation.

@talltexan, this was probably meant to be written somewhere else. I am not in Chili and my user name doesn't suggest it.

EvenSteven

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Re: Investment strategy after house sale?
« Reply #5 on: August 21, 2018, 11:08:34 AM »
Quote
Based on your username, are you in Chile?

Because Norway is chilly?

talltexan

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Re: Investment strategy after house sale?
« Reply #6 on: August 22, 2018, 09:37:33 AM »
Yeah, I really messed up, saw someone with "Andean" in the username and thought you were them.

But if you're looking for foreign countries in which to invest, Chile is a decent one!