I want to start investing money, as low risk as possible, but with a percentage growth of at least 4% over 10 - 15 years.

I won't need this money until then so can handle locking it away or risking a crash, if money will recover 5 years later etc.

This is part of an early retirement plan I have. I am not rich and have only an average income, but have little expenditure due to careful planning.

Footnote, not sure if relevant. I do have a mortgage, but it only has 14 years left on it. Property value is $158184. I am 29 years old and would like a net worth of 400 - 500k by 40 years ideally.

I live in Europe, but am using us dollars to make the question as universal as possible.


If your goal is to have a 400K net worth, in 11 years, and you invest 2144 the entire time you will need a rate of return of at least 6.4%. This is assuming that you have zero net worth now and it does not consider your house. Obviously the house will be worth some amount, and the mortgage balance will go down. However, it cannot really be calculated with the details provided.

It seems like your risk tolerance is low. You may want to head over to Bogleheads.org and look into their asset allocation model. They typically site about a 7% compounded growth rate which will more than meet your goals. They probably have information for European investors that map to the funds that we use here in the US.

Keep in mind, during this time you will likely receive raises, if you start out assuming you will hit the 400-500k mark, and stick to the plan, you will likely blow that goal away.

Also keep in mind the three legs to wealth building: giving some, spending some, and investing some. Your question is addressing the investing portion make sure you are also enjoying your money by spending some on yourself; and, others benefit from your prosperity. Giving to causes you deem worthy is a key component to wealth building that is often overlooked by those interested in investing.

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    How does giving money away help build wealth? I believe generosity is a virtue, but I've never heard someone suggest that it helps build wealth. – Hart CO Oct 17 '17 at 14:42
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    There is a book on my to read list called the Paradox of Generosity. It is a scholarly study of giving and wealth building. Beyond that I can only talk about my personal experience. This advice came from emulating very wealthy friends. When you start giving wisely, more money just pours in, your relationships improve, and you have a better outlook on life. – Pete B. Oct 17 '17 at 14:51
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    Hi Pete, could you elaborate on the giving part any more? This was a great answer so thanks very much. – Cloud Oct 17 '17 at 15:08
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    Sure @Cloud, glad I could help. I would designate a percentage of your income to giving. That could be to your local church, a food bank, animal causes, or a health research facility. We personally do at least 10%, but you may want to start less and make goals to increase. Some of our recent giving included a family who the dad died in an accident and did not have life insurance. A young mother who has cancer, and of course our local church. How much did our gifts help the recipients? Not much. How much did it help us? Profoundly. Try it out, giving helps you more than the recipient. – Pete B. Oct 17 '17 at 16:44
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    Phase 1: give wisely, phase 2: ???, phase 3: profit? – chepner Oct 17 '17 at 18:29

I want to start investing money, as low risk as possible, but with a percentage growth of at least 4% over 10 - 15 years.

...I do have a mortgage,

Then there's your answer. You get a risk-free return of the interest rate on your mortgage (I'm assuming it's more than 4%). Every bit you put toward your mortgage reduces the amount of interest you pay by the interest rate, helping you to pay it off faster.

Then, once your mortgage is paid off, you can look at other investments that fit your risk tolerance and return requirements.

That said, make sure you have enough emergency savings to reduce cash flow interruptions, and make sure you don't have any other debts to pay.

I'm not saying that everyone with a mortgage should pay it off before other investments. You asked for a low-risk 4% investment, which paying your mortgage would accomplish. If you want more return (and more risk) then other investments would be appropriate. Other factors that might change your decision might be:

  • Tax benefits/impacts
  • Early repayment fees
  • Employer matches (for 401(k)s in the US)
  • investment horizon (you mentioned retirement so I'm assuming many years)
  • I was looking for something a bit more detailed. Even if I follow your advice, what do I do with the excess money? Keep it in a bank? What about when the mortgage is paid off. My interest rate is 3.5% and there are early repayment fees. – Cloud Oct 17 '17 at 13:57
  • A property is not risk free. House prices fall and rise just like any other market. – Cloud Oct 17 '17 at 13:57
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    No but paying the mortgage is risk-free. Meaning you will "earn" exactly 4% (i.e. the rate on your mortgage) each time you pay extra by paying less interest going forward. With a risky investment you might earn 15% or you might lose 10%. That's what "risk-free" means in terms if investments. – D Stanley Oct 17 '17 at 14:00
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    Early repayment fees suck. – Hart CO Oct 17 '17 at 14:44
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    @HartCO Good point - will add. – D Stanley Oct 17 '17 at 15:08

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