Southern Europe Mirage?
Dual working couple in Corporate jobs, 5M NW living in LCOL/MCOL, thinking in moving to Southern Europe.
Current situation:
- $700k of equity in primary home, about $350K of Debt on the that home which is worth close to $1.1M/ 3 rentals with about 1M of equity which I should sell, and the rest is essentially invested in VOO.
- In the last 3 years I got promoted to C level of a medium sized company, now make around $500K a year and my spouse makes $250k, probably I have a raise of $75K/year raise coming this year.
- Current spend level is about USD200k/year already with some extensive international travel, and one month per year in spain/portugal.
- Just for fun, we are now demolishing our current home, spending 900k building a new home, which I estimate will add $500K of equity once completed.
The plan is to move to Spain or Portugal and dial back on the hours and stress, but I still find something meaningful to do while there, maybe some boards of large corporations, etc.
I am a bit shocked with the cost of living will be there for our situation, my overview:
- A nice 3/4 bedroom in a nice part of Lisbon/Madrid is 1 to 1.5M Eur
- International schools add 50k euro per year, this will only be for a couple of years, but still a significant expense.
- Except for these 2 expenses the rest is cheap, so maybe another 40k eur in COL with some travelling within europe.
- I thought it would be cheaper to live there, but wanting a nice apartment and the constraint of international schools keeps fixed costs high until the youngest finishes high school.
Next year Net worth probably will reach $6M, but even with that I feel this is way too close to be able to hang my boots. I really fear the sequence of negative returns with valuations being so high. I keep defaulting that I should be able to make it using a 3 or 4% rule of about 50% of my investable assets since prices will come down.
Anyone with the same issues, what advise do you have?
What do you guys think?