What would be the simplest (require the least management) way to get a return of 4 - 6% on savings over a 10 - 15 year period.

I would like the lowest risk possible, I do not need the 'potential' gains to be anything over 4 - 6% but need something that is likely to hit those figures.

I will not need the money as an 'Emergency Fund'.

I would naturally want to pay the least amount of tax possible and do not want to invest in rental properties as that is high maintenance.

I am in Europe and although I don't think this will affect the answer, my savings will be in the region of 1,200 - 1,500 euros per month.

Thanks for reading.

  • 2
    "way to get a return of 4 - 6% on savings over a 10 - 15 year period." in America, at least, lots of people would kill for guaranteed/secure returns like that over the long term. – RonJohn Nov 9 '17 at 18:30
  • @RonJohn there's no mention of "guaranteed/secure returns" in the question, merely "the lowest risk possible" – AakashM Nov 10 '17 at 10:13

I'm assuming you mean 4-6% annually over 10-15 years. If you mean 4%-6% total return over 10 years then this question is easy just find your local country's 10Y bond and that should likely cover it (though barely if you are German).

So 4%-6% annually is not a big stretch but it does require some risk and at least a bit of work. A fire-and-forget good mix would include (using index mutual funds or etfs)

  • Broad European Stock fund
  • Broad ex-European stock fund
  • Broad European Bond fund
  • Maybe a bit of ex-European bonds and European real estate funds (not actual real estate as you mention it is way too much work)

Some internet research and a one-time meeting with a financial adviser who is paid by you (not paid on commission) should help you set the right balance of these index funds and be a good check on what I'm advising.

If you are willing to do a tiny bit more work it's well worth starting with a heavier weight on the riskier stocks and ex-European funds (more currency risk) and then every 2-3 years slowly move into safer stocks and Euro-based funds. With that tiny amount of extra work there you can make it much more likely that you will end within your 4-6% range while taking significantly less risk overall.

| improve this answer | |
  • Some robo-advisors that work in index funds might actually be the easiest way to get the right mix over time (and the fees they charge can be reasonable), but I don't know the robo-advisor space in Europe very well. – rhaskett Nov 9 '17 at 18:47
  • Thanks for the useful answer, I have marked it as the answer. I did mean annually, so thanks for the correct assumption there! The comment against my question seems to disagree with you somewhat, but doesn't provide any evidence, so I will do some real research into Broad European / ex-European Stock funds, as I don't even know what that means at this stage! – Cloud Nov 10 '17 at 7:24
  • @Cloud I can only guess that that commenter thinks you are looking for a risk-free return of 4-6%, which I don't think you are, right? – AakashM Nov 10 '17 at 10:14
  • @AakashM Risk free? There is no such thing. But low risk, yes. – Cloud Nov 10 '17 at 10:23
  • @Cloud obviously we are none of us safe from an asteroid destroying human civilisation. Even so, 'risk-free' is a standard term in investing jargon. – AakashM Nov 10 '17 at 11:14

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.