Degiro or Rabo- for first timer

Marshall987

Hi

I am 27 and looking to start investing. Looking to start with €2000 a year.

I am self employed if that matters, This is my first time investing so looking for the best place to go with my money.
Rabo seems the easiest for beginners
Only heard of Degiro on boards
Also Irish life seems similar to Rabo with different fees.

All advice would be greatly appreciated on where to sign up to.

Cheers

Francie Barrett

Marshall987 wrote: »

Hi

I am 27 and looking to start investing. Looking to start with €2000 a year.

I am self employed if that matters, This is my first time investing so looking for the best place to go with my money.
Rabo seems the easiest for beginners
Only heard of Degiro on boards
Also Irish life seems similar to Rabo with different fees.

All advice would be greatly appreciated on where to sign up to.

Cheers

Rabo is pretty user friendly, and would allow you to drip feed funds with let's say €200 a month as per your requirement. However, the fund choices are very limited and the annual management fees are high (up to 2%), you can also be hit entry/exit fees - which in this day and age are ridiculous.

Degiro on the other hand is much cheaper, offers much greater choice, although it isn't suited to drip feeding on an annual basis. To minimize costs, you'd really want to by buying chunks in at least €1000 blocks.

Have you any idea what you want to invest in?

Sabre Man

I'd recommend buying exchange traded funds (ETFs) through DeGiro rather than paying Rabo's fund fees.

Marshall987

Francie Barrett wrote: »

Rabo is pretty user friendly, and would allow you to drip feed funds with let's say €200 a month as per your requirement. However, the fund choices are very limited and the annual management fees are high (up to 2%), you can also be hit entry/exit fees - which in this day and age are ridiculous.

Degiro on the other hand is much cheaper, offers much greater choice, although it isn't suited to drip feeding on an annual basis. To minimize costs, you'd really want to by buying chunks in at least €1000 blocks.

Have you any idea what you want to invest in?

Hey Francie

Thanks a lot for the quick response.

Is there an advantage/disadvantage to drip feed rather than putting it in bulk.

Like I could put a thousand in to one straight away and then put the other thousand over the course of the year in monthly payments or I could do monthly from the start?
Which would be best method of going about it... Thanks

I have no idea what I want to invest in but I have been reading that a mix of stocks/ bonds is best and been in my 20's the majority been stocks as it gives me time to correct any losses.
Most of the stuff I have been reading are American so they are going on putting 2,000 in for ten years at 7% would be a good place to be.

I'm not looking to take it out in five years or anything like that I'd like to keep on building it up and have the option to take it if it's the last resort.

Thanks again

Marshall987

Sabre Man wrote: »

I'd recommend buying exchange traded funds (ETFs) through DeGiro rather than paying Rabo's fund fees.

Thank you man.

Appreciate it will check it out later when I get home.

newacc2015

Marshall987 wrote: »

Thank you man.

Appreciate it will check it out later when I get home.

Look at the different threads on ETFs here. Some are taxed differently in Ireland

Grecco

For the amount of money your talking about its not worth the hassle. Plus you will have to declare your share holdings in your self employed tax returns.
If it was me I`d open an account with Coinbase or Kraken and buy a few Bitcoins (BTC) and Ether (ETH)

Francie Barrett

Marshall987 wrote: »

Is there an advantage/disadvantage to drip feed rather than putting it in bulk.

Like I could put a thousand in to one straight away and then put the other thousand over the course of the year in monthly payments or I could do monthly from the start?
Which would be best method of going about it... Thanks

Drip feeding a monthly amount into Rabo is the easiest, hassle free way to go about things. You tell them how much want to contribute a month, tell them the fund you wish to purchase, provide the direct debit details, and Rabo will allocate the money automatically. Management/entry/exit fees are painful though, and for that reason alone I would not recommend Rabo.

Marshall987 wrote: »

I have no idea what I want to invest in but I have been reading that a mix of stocks/ bonds is best and been in my 20's the majority been stocks as it gives me time to correct any losses.
Most of the stuff I have been reading are American so they are going on putting 2,000 in for ten years at 7% would be a good place to be.

I'm not looking to take it out in five years or anything like that I'd like to keep on building it up and have the option to take it if it's the last resort.

Thanks again

http://www.revenue.ie/en/about/publications/exchange-traded-funds-guidance-note.pdf

You need to be careful about buying ETF's. The tax treatment for them in Ireland can be punitive.

topper_harley2

Tax treatment of Rabo's unit linked funds are the same as ETFs...8 year rule etc.

newacc2015

Degiro now have 700 commission free ETF's. I just seen it on their site today

Frogdog

+1 for Degiro. I only invest small amounts into ETFs and shares, and so their low fees have been great.

Wheety

I signed up to Degiro and tried to transfer money to my account. They have emailed me and said the bank account doesn't match the account details I gave them when signing up. I'm nearly sure it was the same account.

They're looking for me to email them a scan of my passport, screenshot of my bank account details etc.

Has anyone else had this?

I'll reply to them tomorrow but I'm not comfortable sending that info by email.

Frogdog

Ya I had the same issue once when I mistakenly transferred money from my current account instead of my joint savings account, which is the account I set up my Degiro account with.

I just ignored the email, and once the funds were back in my current account I transferred from my joint account with no issues.

Wheety

Frogdog wrote: »

Ya I had the same issue once when I mistakenly transferred money from my current account instead of my joint savings account, which is the account I set up my Degiro account with.

I just ignored the email, and once the funds were back in my current account I transferred from my joint account with no issues.

Did you ask for your money to be returned?

newacc2015

Wheety wrote: »

I signed up to Degiro and tried to transfer money to my account. They have emailed me and said the bank account doesn't match the account details I gave them when signing up. I'm nearly sure it was the same account.

They're looking for me to email them a scan of my passport, screenshot of my bank account details etc.

Has anyone else had this?

I'll reply to them tomorrow but I'm not comfortable sending that info by email.

Degiro have an office in Dublin. I spoke to them on the phone and they were happy to resolve any issues I had with payments

AdMMM

Francie Barrett wrote: »

http://www.revenue.ie/en/about/publications/exchange-traded-funds-guidance-note.pdf

You need to be careful about buying ETF's. The tax treatment for them in Ireland can be punitive.

Am I correct in thinking that for a US domiciled ETF, I'm looking at declaring income tax yearly on any dividends paid and just CGT on any disposals? Do I still have to worry about taxable events every eight years?

For tax purposes, are dividends considered income upon being issued, or upon being withdrawn/reinvested? I plan on drip feeding funds so I'd imagine dividends will be very small initially...

Frogdog

Wheety wrote: »

Did you ask for your money to be returned?

I did, and there was no problem sending it back.

slow_drinker

AdMMM wrote: »

Am I correct in thinking that for a US domiciled ETF, I'm looking at declaring income tax yearly on any dividends paid and just CGT on any disposals? Do I still have to worry about taxable events every eight years?

For tax purposes, are dividends considered income upon being issued, or upon being withdrawn/reinvested? I plan on drip feeding funds so I'd imagine dividends will be very small initially...

it doesnt matter whether you buy an etf dividend fund which distributes or reinvests , you pay income tax either way

topper_harley2

AdMMM wrote: »

Am I correct in thinking that for a US domiciled ETF, I'm looking at declaring income tax yearly on any dividends paid and just CGT on any disposals? Do I still have to worry about taxable events every eight years?

For US domiciled EFTs, there is is no eight year rule crap. Eight year rule is only applicable to UCIT ETFs.

slow_drinker wrote: »

it doesnt matter whether you buy an etf dividend fund which distributes or reinvests , you pay income tax either way

Im not sure this is correct.....how would you pay tax on dividends you dont receive? For example, I have some accumulating funds in Degiro currently. The total values goes up and down. There has never been a dividend paid. How would I know what to declare to revenue?

robp

slow_drinker wrote: »

AdMMM wrote: »

Am I correct in thinking that for a US domiciled ETF, I'm looking at declaring income tax yearly on any dividends paid and just CGT on any disposals? Do I still have to worry about taxable events every eight years?

For tax purposes, are dividends considered income upon being issued, or upon being withdrawn/reinvested? I plan on drip feeding funds so I'd imagine dividends will be very small initially...

it doesnt matter whether you buy an etf dividend fund which distributes or reinvests , you pay income tax either way

I don't think this is true, because its not reinvested. There simply is no income. If income tax was due on accumulating UCITS ETFs dividends it would imply that income tax is also due on all the dividends accumulating in Irish Life funds, which of course is not the case.

Grecco

Grecco wrote: »

For the amount of money your talking about its not worth the hassle. Plus you will have to declare your share holdings in your self employed tax returns.
If it was me I`d open an account with Coinbase or Kraken and buy a few Bitcoins (BTC) and Ether (ETH)

Declare that you have them or declare any gains at disposal or dividend from during ownership?

AdMMM

topper_harley2 wrote: »

Im not sure this is correct.....how would you pay tax on dividends you dont receive? For example, I have some accumulating funds in Degiro currently. The total values goes up and down. There has never been a dividend paid. How would I know what to declare to revenue?

Dividends Paid would appear under transactions and would also appear in your Cash Funds as opposed to your portfolio.

That's where my question arose over whether or not these dividends are liable for income tax while no action has been taken with them i.e. they have not been withdrawn or reinvested into funds.

My initial feeling is that they are liable for tax regardless of whether you have withdrawn, re-invested or simply left them to accumulate in your account.

topper_harley2

AdMMM wrote: »

Dividends Paid would appear under transactions and would also appear in your Cash Funds as opposed to your portfolio.

That's where my question arose over whether or not these dividends are liable for income tax while no action has been taken with them i.e. they have not been withdrawn or reinvested into funds.

My initial feeling is that they are liable for tax regardless of whether you have withdrawn, re-invested or simply left them to accumulate in your account.

But the underlying ETFs are accumulating....they physically do not pay a dividend so I dont see how anything would appear in your cash fund. I have 3 accumulating ETFs for over a year now and have nothing related to dividends in the transactions tab.

Having read this (http://help.stockopedia.com/knowledgebase/articles/298398-can-etfs-reinvest-dividends), its even more confusing.

"EU domiciled ETFs can reinvest the received dividends/interests, without distributing them.".....ok they dont distribute, so no tax on dividends.
but then
"It's also important to be aware that capitalisation ETFs will still incur tax on a notional dividend if there is income that could be distributed (they are no different to accumulation fund share classes in this respect)."......which implies you are correct and there is a tax. However, how do you figure out a "notional dividend"

This is another reason I gave up on ETFs. They sound simple, then you drill into them and its a minefield of unknowns and questions!

topper_harley2

topper_harley2 wrote: »

.......

This is another reason I gave up on ETFs. They sound simple, then you drill into them and its a minefield of unknowns and questions!

Brilliant for pensions though imo

jive

topper_harley2 wrote: »

But the underlying ETFs are accumulating....they physically do not pay a dividend so I dont see how anything would appear in your cash fund. I have 3 accumulating ETFs for over a year now and have nothing related to dividends in the transactions tab.

Having read this (http://help.stockopedia.com/knowledgebase/articles/298398-can-etfs-reinvest-dividends), its even more confusing.

"EU domiciled ETFs can reinvest the received dividends/interests, without distributing them.".....ok they dont distribute, so no tax on dividends.
but then
"It's also important to be aware that capitalisation ETFs will still incur tax on a notional dividend if there is income that could be distributed (they are no different to accumulation fund share classes in this respect)."......which implies you are correct and there is a tax. However, how do you figure out a "notional dividend"

This is another reason I gave up on ETFs. They sound simple, then you drill into them and its a minefield of unknowns and questions!

Have you invested in any US domiciled ETFs through DeGiro?

And yes, on the face of it EU ETFs look great (accumulating dividends, lovely) but with no offsetting losses and the 8 year gross roll-up they are a total non-runner if you ever want to make actual money from your investments.

topper_harley2

jive wrote: »

Have you invested in any US domiciled ETFs through DeGiro?

And yes, on the face of it EU ETFs look great (accumulating dividends, lovely) but with no offsetting losses and the 8 year gross roll-up they are a total non-runner if you ever want to make actual money from your investments.

No I havent invested in US ETFs. Well not as yet anyway. I'm not sure if I even will to be honest. Im thinking that my pension (contributions maxed for age) is already 80-9% invested in equities.....hence investing my post tax savings into equities as well doesn't sound very diversified.

Instead, Im concentrating on building a large deposit for house, and once its bought I intend on redirecting my "ETF money" into overpaying the mortgage. In this way I get a risk free, guaranteed 3-4% tax free return on my money (based on current rates). I'll save myself years off mortgage and tens of thousands in interest.

Buying house is about 3 years away so Im going to put current lump sum into State Savings 3 or 4 year bond until I need it for deposit. Thats what Im thinking at moment anyway.

Sebastian Dangerfield

I'm in a similar boat - Ive had money with Rabo for a while but have bought some ETF shares with DeGiro to try it out.

One question if anyone can help - when I log into DeGiro my position shows a value for about 10 seconds that shows a profit, before resetting to a lower value. As far as Im aware Ishares only price once a day - does anyone know what causes the immediate change in price?

cromelex

All etf are by definition exchange traded. That means their price will change every second as market prices vary (during market hours).

Francie Barrett

cromelex wrote: »

All etf are by definition exchange traded. That means their price will change every second as market prices vary (during market hours).

He might be getting confused with the NAV, that is usually calculated once, at the end of the day?

Sebastian Dangerfield

Exactly - the same price is listed all day under "Portfolio", that is the NAV the transfer agent issues. When I log in though, a higher price appears for 10 seconds, then it defaults to a lower value. The one it resets to only updates once daily, Im just curious as to what that first number I see is