TL;DR: Are PEE (company savings), PEA (stocks) and renting the best options in France long-term?
I am single, 26, living rent-free and wondering how I should proceed to ensure my financial stability in the future and having a decent wealth in the future: my goal is to be able not to work and live well, if I want to. I have read a lot on the subject, and here are my conclusions.
Please tell if I missed something important!
I live in France, and currently doing a PhD in Artificial Intelligence and Computer Vision, which is a well-paid (?) field. I have a student debt (~15k€), that should be cleared by the end of the year. Unfortunately, I do not see many options for medium/long-term investments, compared to the US (as the 401(k) or Roth IRA).
Still, the decent options right now seem to be:
- The Livret A, a savings account (0.75% / year, capped at 21k€)
- PEA: European stocks, with much less taxes if the money is retrieved after 8 years (capped at 150k€). Also includes ETF trackers and investment funds (SICAV, OPCVM, ...).
- Buying apartments / houses and renting them.
- On a smaller scale, the PEE (by making use of the abondement: as an example, my company gives 700€ if I put 2000€ in the PEE). The PEE has a very low risk investment (mostly bonds).
However, I have some doubts about other financial products:
- Life insurance: the non-euro funds are too risky (I'd rather buy stocks) and euro-based funds have low performance (2%, decreasing every year) and high fees (0.6%).
- Managed investment funds: too risky - they crashed last year. I'd rather buy stocks myself.
- Ironically, bonds and ETF trackers. The reason is that they seem to have increased (too much?) in popularity recently, while the performance is lower than in the past.
Overall, my short-term plan (3-4 years) is to:
- Invest every month a good chunk of my salary (e.g. 30%+) in stocks of dividend paying, well-known companies (Airbus, Peugeot, AXA, Société Générale...) using a PEA. Reinvest the money earned from dividends.
- Make the most of my PEE and the abondement offered by my company.
- Keep my emergency fund (5k€) and whatever is left in a Livret A.
My medium/long-term plan is to:
- Same as short-term, but with a lower % in stocks. Use a normal trading account if I go above the PEA cap;
- Invest some % of what I earn in ETF trackers.
- Be on the lookout for a good housing opportunity, that can be rented medium-term (it is easier to get good loans for your first home, but you need to wait some time before you can rent it).
Finally, note that I am willing to take (moderate) risks in the short term. I do not exclude the possibility of working abroad, and not interested in short-term stocks selling.
Are the financial products I listed the most appropriate ones in my case?