Irish or American broker?

StyleKillah

Hi everyone,
I done some research, I saved up my first €1000 and I'm ready to invest it and buy some shares. I want to buy shares that give out a strong dividend that I can reinvest and I settled on KO and PG. Since the shares are american and I plan to invest for the time being in the American share market which broker should I go with? I plan to invest these long term (Probably for another 30 years) although I'll be continually adding to my portfolio so I'd like to have an online function.

I'd like to do it online and not have to do it over the phone. I'm deciding between irish broker Goodbody or American firms such as Fidelity.

Also I'm currently with AIB. For the shares I plan to invest and hold, am I better off going into the bank and purchasing shares at the counter? Can that be done for American shares and will offer me dividend reinvestment plans?

I'd like to hear what services you guys use and what your experience is with them. I'm so excited to begin this journey but I want to be cautious about it!

Good evening!

scamalert

just quick copy from google random search worth thinking about first:

It costs €85 to buy €1,000 worth of shares from Cantor Fitzgerald, including commission of €55 and a €30 contract charge. You must pay Cantor an annual fee of €120 for execution-only accounts.

this example is just random broker that ive found on google-but i do think that all of above costs apply for most,thus first thing find out what are all the costs,since 1000 wont get you much thus you might as well be going into (-) straight away and any profits would barely cover your costs if at all,thus you would need to add cash to expand and keep afloat before seeing anything for years to come.

That said ive done very limited share trading and not US so others might have more knowledge of costs involved.

goathe

Goodbody would charge you 32 euro for those trades, plus E19.05 per trade in american shares. Plus stamp duty, thats E61.05 for a E1000 trade - thats 6% of what you're planning to invest.
Their annual holding fee is E26 including VAT, so they would be cheaper to Cantor Fitzgerald there aswell.
As for other Irish brokers, they'd only be more expensive, in general, but I'd have little experience of whether that might come with greater benefits in terms of customer service, etc.

American brokers would be vastly cheaper, but they'll tax your dividends at a higher rate, and may have other hidden fees and charges for foreign investors.

Goodbody used to be owned by AIB, so I imagine transferring money between the two would be easy.

Whoever you end up with, good luck

Cute Hoor

If you plan to only buy US shares then you would be mad imo to go with an Irish broker, as explained above their fees are massive compared to US brokers, and you would probably get done on exchange rates as well. Here is a comparison list of US brokers, some of these (e.g. TDAmeritrade) will take Irish clients, some (e.g. TradeKing) won't. Most of the US brokers do not have any ongoing maintenance charges - just your buy and sell costs. Looking at the MB Trading website, they appear to take Irish clients, they are about to merge with Tradeking, probably the cheapest out there at $4.95 per trade. Robinhood don't charge any fees, but not available to Irish clients - yet.
https://the-international-investor.com/comparison-tables/online-discount-stock-brokers-comparison-table

Good luck!

Cute Hoor

goathe wrote: »

American brokers would be vastly cheaper, but they'll tax your dividends at a higher rate

I presume the tax payable on dividends is the same irrespective of where your broker is based?

StyleKillah

Right, I do plan to re-invest those dividends but I'm afraid by going with a US stock broker I'm going to be taxed twice. Is that the case? Or will I be taxed twice either way. I assume by investing in American shares they'll want a cut of what I make then so will the Irish? Thanks for the replies everyone! I'm so excited to begin investing but I want to do it all right. How would you pay stamp duty (Am I legally obliged to pay duty) if I go with a US broker?

Also, are my shares secure with brokers? What happens if they go bankrupt or get closed down? I know Goodbody has been around since like 1900 so I'm nearly confident that they would be safe. I was just imagining if I ever got to the point I was investing thousands and making solid investments to hear that the firm is being liquidated! Are there insurance policies in place?

Emailed TD Ameritrade:

"Thanks for reaching out. Regrettably, TD Ameritrade is unable to open new accounts for applicants with mailing or physical addresses in Ireland. This is a result of a thorough legal review of established regulations in this country, among many other countries. We appreciate your interest in opening an account and wish you the best in your investment needs."

What's folks opinion on Degiro?

Keep the replies coming!

Cute Hoor

StyleKillah wrote: »

Emailed TD Ameritrade:

"Thanks for reaching out. Regrettably, TD Ameritrade is unable to open new accounts for applicants with mailing or physical addresses in Ireland. This is a result of a thorough legal review of established regulations in this country, among many other countries. We appreciate your interest in opening an account and wish you the best in your investment needs."

Very interesting - does the left hand know what the right hand is doing, seems from this you can

https://invest.tdameritrade.com/grid/p/accountApplication

Sabre Man

How about Degiro?

https://www.degiro.ie/

StyleKillah

Sabre Man wrote: »

How about Degiro?

I'm seriously looking into it but there isn't much info online about it which makes me cautious.

27cyrix

StyleKillah wrote: »

I'm seriously looking into it but there isn't much info online about it which makes me cautious.

I'm with DeGiro for about two weeks. good customer services. very low fee.

received one dividend this week, only 15% dwt, not sure about irish tax.

if you start with small amount of money, you can also try etoro.

etoro does not have any upfront fee, but have a bit higher spread, if you only invest a little money, spread is better than broker fee imo.
you can invest in share as little as 50$ which means you can buy fractions of share.
They also give you dividend. i've received many times.

note: the etoro link above is my refer-a-friend link you and I will get 100 deposit bonus

StyleKillah

Sorry guys, quite a bump but I've yet to invest cash although I have a bigger lump sum ready to go but I'm making sure I do everything right. Funnily enough my Google Finance test Portfolio grew 15% since last August so maybe I did miss out on growth not investing soon enough but fail to prepare and prepare to fail.

If anyones curious about being taxed twice because your using a US stockbroker, I don't believe so judging by Investopedia:

investopedia .com/ask/answers/06/nonusresidenttax.asp

And we do have a double taxation treaty with the USA so I believe you pay 0% tax on dividends in the USA and pay the usual amount in euro when you file with revenue:

davyselect .ie/customer-services/faq-deal-us-stocks.html

Feel free to correct me if i'm wrong!

Anyway I succumbed and ended up asking an accountant for advice whether to use an American or Irish stockbroker but judging by my own research, I'll probably be using an American! I'll update the thread after consulting.

If your unsure and may want to invest with an Irish stockbroker, Goodbody still seems to be the best bet despite the annual holding fee at €60 up from €26 although their prices are now comparable to others on the market of Rip off Ireland.

Also I did open a TD Ameritrade account, W8-BEN accepted and all. The left certainly does not know what the right is doing although I'll double check before my first transaction.

I'm still considering Degiro & may use it for investing in the ASX and South Asia markets as it'd be FX suicide converting currencies twice.

More about how American dividends are taxed:

irishtimes .com/business/personal-finance/q-a-dominic-coyle-claiming-back-tax-on-us-dividends-1.2466136

Sabre Man

I'm with Degiro about 9 months. Most of my holdings are US shares. For the amount you are thinking of investing you'd pay just over €1 in commission for buying €500 worth of KO and PG shares.

StyleKillah

Sabre Man wrote: »

I'm with Degiro about 9 months. Most of my holdings are US shares. For the amount you are thinking of investing you'd pay just over €1 in commission for buying €500 worth of KO and PG shares.

Have you had any problems with dividends? There seems to be a discrepancy with how they are paid out on the platform from other boards users. And does Degiro offer DRIP?

scamalert

out of interest is it possible to get demo accounts with them companies,just to test platform and see options-charts etc.

Also while speaking of shares what % of dividents one can get per year for say 1k account,now i know question is broad since depends on company how it does,so just ballpark number,also never heard of google portfolio is is smth like suggested demo just to see test your skills,or are there more tools to monitor.

Since did forex few years back,now its costs are low,and money can be made on it,since over the last years options include some shares and most indexes but biggest trip up is leverage which leads to bust easily thus if impulsive trader can lose cash in minutes and volatility doesnt make it easy,while shares in my opinion are long term investment that doesn't need much attention,but from limited experience trying them,its a lot of homework to be done on picking companies and knowing how they might do,since remember getting dividends but amount was like 0.5% on 100e worth of shares.

StyleKillah

scamalert wrote: »

out of interest is it possible to get demo accounts with them companies,just to test platform and see options-charts etc.

Also while speaking of shares what % of dividents one can get per year for say 1k account,now i know question is broad since depends on company how it does,so just ballpark number,also never heard of google portfolio is is smth like suggested demo just to see test your skills,or are there more tools to monitor.

Since did forex few years back,now its costs are low,and money can be made on it,since over the last years options include some shares and most indexes but biggest trip up is leverage which leads to bust easily thus if impulsive trader can lose cash in minutes and volatility doesnt make it easy,while shares in my opinion are long term investment that doesn't need much attention,but from limited experience trying them,its a lot of homework to be done on picking companies and knowing how they might do,since remember getting dividends but amount was like 0.5% on 100e worth of shares.

I really like Google Finance because it's easy to use and keeps track of transactions including stock splits etc. Also you can set it to dollars but then enter the cash in euros and it takes care of FX. Although not sure how accurately as I haven't done it properly yet and go through the loops and bounds of wiring money over. Google Finance is a lot like Yahoo Finance, I just find it a wee bit easier and you can compare how your portfolio is performing against S&P 500 + NASDAQ etc very easily.

Till now I've been using it as a way to demo my investments and my portfolio grew 15% against S&P 500 which was at 10% but that's only been for a year. But when you truly start investing you can use Google Finance as a tool to keep track of your portfolio along side the tools on the trading platform. You can even enter transaction fee.

ONE CAVEAT, it doesn't reinvest dividends, it puts it into cash so you need to manually go in there and make the changes yourself.

Last thing about Google Finance, if you already have a share portfolio up and going you can import all your transactions with a CSV file or enter it manually if you remember the historical prices you paid for your past shares.

I know about Forex and spread betting and I think if your very comfortable with risk and it's true disposable income and you don't like gambling then it's worth it. I'm not comfortable with that risk. I want my money to work hard but not that hard so I'm investing in long term passive income streams. And it's easy enough, I don't worry whenever the media gets anxious about the stock market, I only ever checked the portfolio every few weeks but anyways.

As for dividends I used that €1000 to invest in 4 different companies but when I properly invest I'll be putting in €1000 PER company just to make it worth while with fees and I had the extra year to save the cash up.

But from my Google Finance portfolio take this as example. (NOT RECOMMENDING INVESTING IN SAID COMPANY, just showing how dividends work)

Coca Cola:

Bought 10 shares at $393.80 (that includes the transaction fee of $10) Last August. Now worth $447.00 (447 when I calculated this but since changed).

Sep 11, 2015: 0.33 x 10 = $3.3
Nov 27, 2015: 0.33 x 10 = $3.3
Mar 11, 2016: 0.35 x 10 = $3.5

$10.11 from dividends for 3/4 of the year.

total growth: $53.2 + $10.11 from dividends = $63.31 for 3/4 of the 2015/2016 year.

Growth with dividends: 16.07%

So thats pretty good growth and I'm still waiting on my 4th dividend to make it a full year of investing. So I'm assuming my next payment will be $3.4 making my total dividends for the year $13.51 which puts it at a 3.4% dividend yield.

If anyone believes my calculation is wrong, jump in and correct me!

If you sold the shares, the profit of $53.2 will be subjected to Capital Gains tax and regardless if you sell or not, the dividends of $13.51 will be subject to your 20% income tax (or 40% margin). Assuming $13.51 from what I understand 15% goes to the US government and 5% goes to the Irish government if your in the 20% bracket. I believe even if you re-invest the dividends your subjected to income tax but that's the game of life.

RE: Demo accounts, I believe TD Ameritrade has some sort of function like that. I know a lot of spread betting and forex you can run demos.

And on a personal note, it's quite shocking that I'm finding taxes harder to understand than the stock market. Not that I'm very knowledgeable but I'm sweating bullets comprehending the revenues articles.

EDIT: As of Today, Google Finance is saying my portfolio growth from August 25 2015 to June 26 2016 has been +12.48% against the S&P 500 at +7.62%, Nasdaq at +4.01% and Dow Jones at +9.64%

scamalert

well checked out google portfolio might do some demo just to see how it works looks nice to just get feel for interested companies.As for tax /revenue while its as i understand automatically taken from your US account,but know when was trading forex never bothered to declare any income,since whatever amount was withdrawn it wasnt much more then i put in total,thus didnt have consistent results.Know some people do declare such profits,but unless you manage to live off it and its constant flow that you can produce monthly withdrawals,which is hard to say not having at least few years experience that would be my last worry-not saying dont pay tax,but if you'll grow your portfolio once trading it will be a while once you can show profit that needs attention.

Sabre Man

StyleKillah wrote: »

Have you had any problems with dividends? There seems to be a discrepancy with how they are paid out on the platform from other boards users. And does Degiro offer DRIP?

There is no DRIP option at the moment as far as I am aware.

yeyeye

Hi, thanks for this thread I just posted one similar! I'm looking to invest in US companies as well, some great opportunites in the market my portfolio on google finance has grown by 57% since I started it in January so i feel as i am missing out!! Just curious are they're any decent Irish stockbrokers or should i just deal with a US based broker?

peege

StyleKillah wrote: »

Also I did open a TD Ameritrade account, W8-BEN accepted and all. The left certainly does not know what the right is doing although I'll double check before my first transaction.

I'm still considering Degiro & may use it for investing in the ASX and South Asia markets as it'd be FX suicide converting currencies twice.

More about how American dividends are taxed:

irishtimes .com/business/personal-finance/q-a-dominic-coyle-claiming-back-tax-on-us-dividends-1.2466136

I am trying to do the same thing at the moment. i want to buy shares to hold for 20-30yrs and reinvest the dividends. American stockbrokers will reinvest the dividends for free using DRIPS. Could you answer some of these questions please?

Have you experienced any problems with TD Ameritrade?
is it possible for an Irish citizen/ resident to open an account?
How did you lodge money into the account? Do you need an American bank account?

Cute Hoor

peege wrote: »

Have you experienced any problems with TD Ameritrade?

I use Ameritrade (infrequently now) and have never had an issue with them.

peege wrote: »

is it possible for an Irish citizen/ resident to open an account?

Yes
https://invest.tdameritrade.com/grid/p/accountApplication

peege wrote: »

How did you lodge money into the account? Do you need an American bank account?

You don't need a US bank account.
Your Irish bank will do the transfer for you (at a cost).
I think TD Ameritrade require that the funds come from a 'real' bank, would be much cheaper if they would accept funding from Revolut or CurrencyFair but I don't think they do, worth checking with them though.