How to invest 750k for my parents
Hello dear community!
As mentioned in the title, I am helping my parents wisely invest their assets of around €750,000 for retirement. The goal is to grow part of it by investing in the stock market. Here are some initial facts about my parents:
- Both are 59 years old.
- Both are employed.
- Plan to work until retirement age (67 years).
My parents have worked hard all their lives but have hardly invested any of their money. Instead, they’ve always kept it in a savings account. The exception is a DEKA fund based on the EURO STOXX 50. Recently, my mother consulted with a financial advisor at the Sparkasse (🤮). After seeing the suggestions she was given, I had to step in and save her.
I introduced my parents to the basics of ETFs, and together, we concluded that they should take control of their finances themselves. However, while I know how to build wealth during the accumulation phase (as I am doing myself), I’m not very experienced in managing already accumulated wealth.
Here’s how their current assets are allocated:
- Approximately €80,000 in a DEKA fund.
- Approximately €20,000 in some bond funds.
- Approximately €490,000 in cash.
- Real estate purchased 10 years ago for €160,000 (likely worth €320,000 today, but this increase in value is not included in the €750,000 total).
They wish to purchase another property in the coming years, for which approximately €250,000 should always remain liquid. This amount will be split between two savings accounts. This leaves around €240,000 available for investment in the stock market.
My plan is to gradually invest these €240,000 in large tranches via a savings plan over the next 12 months into the FTSE All-World. Additionally, about 5% of the amount (€12,000–€15,000) could be invested in gold. My parents want to deal with their finances as little as possible, and in my opinion, this would be the simplest and best way to prevent their money from sitting idle in a savings account.
What do you think about this approach?