[toomuchtodo]

Own your home, keep a small emergency savings account (~10k EUR), invest outside the bloc (VT, VTI, VEMAX). You've got robust social safety nets, any returns are gravy. Some currency risk is unavoidable.

(educational purposes only, not investing advice, pay a pro a fixed fee for an hour or two of time)

[csomar]

> You've got robust social safety nets

Depends which EU country he is living in (though he said Europe). Italy pension system is hazardous. Greece is in the EU too, by the way.

[toomuchtodo]

Asking because I don't know: what are the odds Germany and France by way of Brussels bail those folks out?

[imtringued]

Germany will never run an trade deficit out of a stupid sense of pride, it's completely irrational, so 99%.

Just think about it. If Greece needs x billion € to pay its debt off the most logical way to deal with the problem would be to just buy a huge amount of Greek products rather than send x billion € directly.

[csomar]

My guess is, they'll help it like they did with Greece (maybe a bit more generous) but they'll have to pay a big part of the bill (ie: austerity)

[legulere]

But if the asset bubble bursts and your home loses most worth.

[poooogles]

>But if the asset bubble bursts and your home loses most worth.

Luckily the primary function of a home is to provide shelter. You don't have to worry about being out on the street if you're unemployed (pending you can afford local taxes).

[pjc50]

Sibling comment gets it: regardless of everything else, you must "consume" housing, either as a capital good or in rent. Home ownership insulates you from shocks to the rental market.

It's possible that the house price falls by 10%. It is very, very unlikely that rents will crash by 10%; they're sticky, at best you'll see a very slow slide over years.

[est31]

Yes, you must consume housing. But if you can't pay off your mortgage in a reasonable time frame (10-15 years), "owning" it doesn't give you any security, at least against sudden job loss. If house prices crash and you lose your job, you might be kicked out of your rented apartment, but that's it. At least here in Germany, if you were in the same situation as home owner, you'd lose your house and have to pay back the debt resulting from the lower house prices (unless you file for bankruptcy).

[cesarb]

> But if you can't pay off your mortgage in a reasonable time frame (10-15 years), "owning" it doesn't give you any security, at least against sudden job loss.

If you're still paying your mortgage, do you really own your home?

[wallacoloo]

> If you're still paying your mortgage, do you really own your home?

You own your home in this scenario just as much as the entity on the other side of the equation owns the income stream from your mortgage.

A mortgage is a collateralized loan. You agree to give up ownership of your collateral if you fail to meet the terms of you contract. So yes, you own the home now, subject to constraints.

Ownership is almost always subject to some constraints. Nobody says “do you own your home even though you can be taken out of it (and jailed) if you refuse to pay taxes on it?” even though that’s arguably a more extreme condition upon your ownership. While I am sympathetic to conversation about the broader meaning of ownership, this “mortgage => !ownership” thing is a tired meme.

[WanderPanda]

You're right the bank owns your life, your ability to create value. What a terrible place to be in

[Deukhoofd]

> Own your home

Easier said than done.

[pjc50]

If you don't own your home, that is a far higher priority than trying to protect a comparatively tiny sum of savings from inflation hitting the dangerous heights of 5%.

Far more important is keeping your salary up with inflation, since for most people 1y salary > savings.

[imtringued]

Yes, you have to switch jobs frequently to get those inflation adjusted raises.

[BelenusMordred]

> keep a small emergency savings account (~10k EUR)

Hopefully you don't mean in a bank? If history is any guide that's useless with capital controls initiated before the public even gets whiff of it, see Greece and Cyprus 2008. A bolted-down safe in your house seems to be the caveat on such a statement. Money in the bank simply isn't yours and far too many people don't realise this.

[breakfastduck]

At least in the UK you are insured up to 80k, so keeping 10k in a bank is perfectly safe. You will not lose it if the bank crashes.

That advice you're giving there is actually kind of dangerous & misleading.

[WanderPanda]

I don't like these kind of "insurances". It is very probable that when multiple banks go belly-up this could lead to serious inflation. You will get your money back in nominal terms, but what will you be able to buy from it? I even think that we should somehow count these "insurance" to the central bank balance sheet. If shit hits the fan the cb will sure as hell monetise the government debt needed to guarantee these amounts.

[Traster]

A small emergency savings account isn't there to insulate you against a sovereign debt crisis. It's there to insulate you if you lose your job and need a few months to pay your mortgage while you find a new one.

[Uberphallus]

Most of Europe has enough unemployment benefits to get you by for more than a few months, though, sometimes years. It better stay invested.

[pjc50]

The Cyprus confiscation had a threshold which was much higher than your hypothetical 10k.

It's still wise to at least consider the possibility of a bank failure, qv Northern Rock.

Grandparent comment's advice about keeping an overseas investment is wise, too; as a Brit I've not regretted having US investments.

[throw0101a]

> It's still wise to at least consider the possibility of a bank failure, qv Northern Rock.

Most industrialized countries have insurance of bank deposits up to a certain point. So even if the bank goes poof your savings are still safe.

It would simply be prudent to have money in more than one bank (or credit union), as if something bad happens then things may get chaotic in the short term.

A second account also helps with IT problems:

* https://en.wikipedia.org/wiki/2012_RBS_Group_computer_system...

* https://www.theguardian.com/business/2019/aug/27/natwest-and...

[toomuchtodo]

If you're paranoid or live in a country where your risk tolerance dictates such a course of action, sure, keep notes on hand.