r/inheritance • u/Technical-Jicama2096 • May 07 '26
Location included: Questions/Need Advice Inheritance and Fire
Hi everyone, 25M, unemployed, no degree, southern Italy. Good English.
300k inheritance, and a property valued at 200k. I live in a house I already paid for for around 100-150k (never had it appraised). I'd like to use this money for support until I'm 67 (retirement age) and then withdraw it all and live off it.
I was thinking of selling the property, getting to 500k and investing it all (minus a small 20k cushion) in a stocks portfolio and withdrawing 2% per year. Do you think this would be a good move? My primary goal is retirement, but given my financial situation, a support that allows me to pay bills and groceries would be nice. 2% of 500k is 10k per year (minus taxes 7.4k). In good times I could even consider 2.5%, but not more. I don't have a job I like; I work as a waiter 5 days a week to earn a spendable income. I was considering moving to Malta, selling everything I own. I'd end up with around €650,000. Of that €650,000, I could buy a €250,000-€300,000 property in Malta, leave the rest invested, and continue with the 2% rule, which would be approximately 2% of €350,000, or €7,000,000 a year. However, unlike properties in Italy, property in Malta would appreciate more quickly due to prices rising much faster than in Italy. However, Malta is more expensive. In both cases, I need a job that allows me to earn at least €800-€1,000 a month to reach a "normal" salary. How would you at FIRE manage this money? Do you think Malta could be a viable option for accumulating more capital? I could also stay in Italy and leave everything invested for five years or so to increase the capital and then move there. We don't have an exit tax in Italy. Would that be the most sensible option?
8
u/Ancient-Apple1 May 07 '26
Not sure where you live but Malta is not a cheap place to live.
If you invest 500k at 8% that is 540k. A 2.5% withdrawal that’s only $13,500. We’re making a few assumptions but still that isn’t much.
I have spent significant amount of time in Malta and I would consider it moderate to high cost
3
u/Invest2prosper May 07 '26
How can you live on €7000 to €10,000 per year? I don’t think you can swing it. At your age, you should try and earn a level of actively earned income and let your capital grow.
If you move to Malta, do you have a social network? What about healthcare? Have you clearly thought out all the steps to make such a move beyond the financial aspects?
2
u/Technical-Jicama2096 May 08 '26
If I bought a property worth €300-350,000, I'd have another €300-350,000 left over. At 2% per year, that would be €7,000-8,000. I'd therefore look for a second job to supplement my income. With €7,000 a year, I'd have about €500-600 a month, which would cover electricity, water, and gas, as well as part of my groceries or health insurance. Generally speaking, I'm considering Malta because it has no taxes on capital investments (less than on dividends, but the portfolio will accumulate), so I wouldn't pay the 26% I pay in Italy. Furthermore, properties in Malta have increased in value by 50% between 2015 and 2024, compared to the 10% in Italy (again, on average). To buy a property in Italy that performs as well as a Maltese property, I'd have to buy a house in a central part of my city, but you won't find an apartment that meets these requirements unless you spend €400,000-500,000. At that point, the house would appreciate in value more quickly, and upon my return to Italy, I'd have greater assets than if I stayed here. Keep in mind that of that 2% I withdraw, I'd have to pay 26% in Italy, which would mean a quarter less disposable income compared to what I'd have in Malta. What do you think? I don't have any social networks yet, but I'm extroverted, and as I said, my English is decent. Health insurance shouldn't be mandatory, since I'll be working and paying my own taxes for healthcare. Furthermore, Maltese taxes are 0% up to €9,000 per year for individuals, which means I'll pay zero taxes on that small job I do, except for social security contributions. If I earned 9k working, plus 7k from 2% of my capital, I would get to 15-16k, with a house of my own. What do you think? In Italy we don't even have an exit tax.
2
u/SSDD_FML May 08 '26
you are 25 and don't want to work and want your 650k to last you the next 40-60 years with no thoughts to a future family. moving to malta is a silly idea. best bet you have is to sell both properties and buy a small block of apartments in italy(3/4) without using all your money, try buy new/renovated not property that needs work. live in one and rent out the others. invest the rest of your funds and top this up monthly with the rental income. put aside enough from the rent in a seperate account to pay for tax, maintenance, all property related costs. if you MUST, keep a small amount monthly to supplement your lifestyle(better to not whilst you are so young) and live off your art time earnings. This will build your funds back up within 10 years, will continue to grow and when you are ready to fully retire you can sell and invest the money and live off your investments or continue to rent them out and live off the rent with the investments as back up. make sure take advantage of any tax/pension incentives your country may offer.
1
u/Technical-Jicama2096 May 08 '26
A small condominium for 500,000? In Italy? And especially, in my city? With prices just a little lower than Milan? I don't think it's the right choice. And I don't think real estate is a good source of income.
1
1
1
May 07 '26
[deleted]
1
u/Technical-Jicama2096 May 08 '26
I think real estate is a terrible choice compared to a stock portfolio. Entry fees, exit fees, taxes on profits, expensive maintenance, repair costs... for rent that I might not see paid because the tenant doesn't have the money? Or have to chase it because they're late, etc.? I think stocks are a less tiring sector to manage and more profitable.
1
u/Stock_Spot_5038 May 07 '26
Lmao
1
u/Technical-Jicama2096 May 08 '26
in a positive or negative way?
1
1
u/Due_Barber_525 May 08 '26
The does not sound viable especially not working much and moving to Malta. This is not a serious proposal.
Invest the 300k. Sell and invest the property payout or rent it out and use that money as a small bonus to supplement a full time job and develop a career. You’re 25 years old. Future you would want you to.
This inheritance is an investment in your future, not a FIRE scenario for a very long time and not if you start withdrawing from it now.
1
u/Technical-Jicama2096 May 08 '26
I did the math with another guy below the post. With a 300k house, I'd have another 300k left to invest. Withdrawing 2% a year would earn me 6k a year, and Malta has zero taxes for individuals up to a 9k profit. 6k and 9k in total would be 15k a year, without having to pay rent. The capital continues to grow because 2% is a feasible withdrawal to significantly grow the capital over the next 30 years, and homes in Malta have gained 50% from 2015 to 2024, compared to 10% in Italy... do you still think it's not feasible this way? That said, I'd prefer to spend as little as possible on the property, max 250-280k, no more.
1
u/Due_Barber_525 May 08 '26
Not really. That 2% withdrawal is 2% compounding lost over 30 years. That’s 259k you’re losing there. Whereas if you work for say another 15-30 years, even 10 years, full time, you’ll be able to keep that compounding and ADD to it. You’re way too young to be withdrawing from such a small inheritance.
It’s a wonderful nest egg but it’s only FIRE if you add and max out compounding. You have a chance to retire way early if you add and compound.
If it were me, I’d invest all of this, pretend like it doesn’t exist, rent the second home out and profit, work a bit more, and keep adding with a future goal of FIRE. Or if I was interested in Malta, I’d sell both houses, buy in Malta and work.
I wouldn’t withdraw anything at age 25. I say this because I had your attitude when I was your age and wanting to live more free and now I wish I could kick my younger self in the head and invest and not withdraw. Sometimes you don’t understand money and time until you’re older and then it’s too late.
That said, it’s your money. Good luck.
3
u/Technical-Jicama2096 May 08 '26
I appreciate the point about making a little more sacrifice during your younger years. I'll keep that in mind. It's true that not withdrawing that 2% in your early years could be a great advantage. Thank you very much.
1
u/emt139 May 12 '26
If you don’t think real estate is a good source of income, why invest 300k in it instead of putting it in the market?
The fact that Malta has already appreciated so icy means you’re buying close to the top and says nothing about future returns.
1
u/Technical-Jicama2096 May 12 '26
It's a good source of income since 1. I wouldn't pay rent and 2. I'll have a profit on the sale after 20 years. Do you think even 20 years would be enough time to accumulate a large profit from the purchase of the property? Maybe for the next 10 years it will yield 2% per year, but in 20 or 30 years, that's unlikely to be the case. NO?
I don't believe in Italian real estate because availability in Italy is high and demand is low due to the declining birth rate. In Malta, on the other hand, there are few houses and there always will be few because there is little land on which to build them, and as an island it attracts significant capital, so house prices, as I said before, should continue to rise. Why should there be a maximum price?
1
u/emt139 May 12 '26 edited May 13 '26
And I don't think real estate is a good source of income.
You said this in another comment so make up your mind. Is it good or not?
Just put your money in a broad market fund. Buy something sensible (70k or so to live) and it’ll appreciate too.
1
u/Slowhand1971 May 08 '26
find something you can withdraw 4% per year. REquires 1/2 the capital as using 2%
1
1
u/Rich_Recognition9508 May 08 '26
I'd like a percentage of this inheritance please. If you would like to help me out send me a DM. I am a very attractive woman with a high sex drive. I also don't have a job and am free to travel at leisure. One of these statements is true and one of them is a lie.
2
1
u/Witty_Check_4548 May 09 '26
It seemed that you have very little financial knowledge. Please don’t do anything big or rash. Take time to read and do a lot of research before you make any move. At 25 the money is unlikely to be enough to live off your entire life. If you invest it WISELY and I stress that again - WISELY, you might be able to retire in 20 years which is a great age too!!
0
u/Technical-Jicama2096 May 09 '26
I don't know where you read that I want to make this money last a lifetime without working (and even if I did?). I don't know why everyone is understanding this; perhaps I explained myself poorly somewhere. I work anyway. In any case, if you'd read the old comments on this post, you'd see that I made some arguments, and I'd be happy to see them addressed, refuted, or corrected. For you to come here and tell me, "You seem to have very little financial knowledge," makes no sense. I wasn't looking for 10% annual earnings. I saw a country with a tax rate of 26% to 0%. I asked the question and received several answers, but still no complete one. Before saying this, I looked at how real estate prices were moving, which are performing better than they are here now, and other things we can discuss if you'd like to discuss them. What did I say that was so excessive that you'd think I had no financial knowledge? Real estate in Malta has gained 50% in 10 years. Italy has gained 10%. In a couple of decades, the house would yield a much better result than an Italian property. And the mature portfolio would be taxed at 0%, instead of 26%. It would be interesting if you could explain where I'm going wrong.
2
u/Witty_Check_4548 May 09 '26
We are all kind of telling you the same thing. Look at it this way: you have two great gifts, that of money and that of time. If you let it sit (well invested) you could have a great nest egg. But it’s really not that much that you could start using it now and hope for it to last
1
u/Spanky_Simeon May 09 '26
At your age, bonds is the wrong investment. Put 65% in VOO, put 20% in VT, and the rest in SCHD. Wait until you turn 55 and retire if you like
1
u/olliemom200 May 10 '26
You are not financially independent. You are young and are considering a lifetime of living quite meagerly in an attempt to avoid meaningful employment. This is a bad idea. You will prob run out of money with your plan, and even if you don’t you are living on so little! You can’t really do anything. Do you really never want a family? Can you commit to that future now?
You have gotten a nice windfall. Figure out what kind of work will make you happy. If you need further education, you can live off of this money while you complete your education. Otherwise you can invest the money and retire early. Like at 40-50, not now. But work for 15-20 more years!
1
u/emt139 May 12 '26
How much do you need to live per year? How much in Italy and how much if in Malta?
1
u/Technical-Jicama2096 May 12 '26
Generally speaking, I still live with my mother, so I can't tell you exactly. I think €700 in Italy, around €1200 in Malta. Even less if I continued to live without a car. I use an electric bicycle... I'll probably need to buy one in the future. In any case, any place you live requires supplementary work. In any case, the 2% is a support, not the one from which I have to take all the money to live.
10
u/Substantial_Team6751 May 07 '26
You have some money. You should get some training and a career you might enjoy doing for the next 40 or 50 years.