2Yr·

ETF accumulators versus distributors - here's the answer!

As a supplement to today's Vanguard post, a very good comparison video from Finanztip, in my opinion, is already 3 years old, but still valid! Apart from the old allowance of €801, nothing has changed.

A post to bookmark, and whenever you are faced with the decision between accumulating and distributing - watch the video as a refresher! Then finally the eternal compound interest discussions, tax deferrals, advance lump sums and dividends.

The conclusion up front: If the dividends are regularly reinvested, a distributor has no disadvantage compared to an accumulator, both receive approximately the same net payout in the end.

The main difference is:

The accumulator is a "carefree package without expense" in contrast to the distributor, where you reinvest the dividends again and again.

Financial tip: https://youtu.be/eAY6iZ6mlyw

Vanguard Post: https://app.getquin.com/activity/lMJYvsxvOT?lang=de&utm_source=sharing

#Thesaurierer
#ETF
#Ausschütter
#Dividenden
#reinvestieren

22 Comments

SharkAce@SharkAce

2Yr

You can also reinvest the dividends in another position and beat the accumulator if necessary :) For example, reinvest the dividends from the All World in Google and speculate that Google will perform better than the All World.

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TomTurboInvest@TomTurboInvest

2Yr

@SharkAce that is definitely an option! Over a long investment horizon, the strategy may well change in sub-areas, and then you have the freedom to invest elsewhere with the returns 👍

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SharkAce@SharkAce

2Yr

@TomTurboInvest Absolutely, that's why I'm currently doing it that way :D The additional expense is manageable, because you don't have to put the dividend into a new share every time. You just reinvest it in shares that you already have in your portfolio and one of them will have a decent price at the moment (currently probably more than one position haha).

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Jonas Reichert@Jonas9221

2Yr

@SharkAce And then fly off the handle if things get even worse.

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SharkAce@SharkAce

2Yr

@Jonas9221 well what is called fly on the face. If you invest it not exactly in risk stocks, the loss should be manageable. Should Microsoft, Alphabet and co -50% in the period make the ETF will not be much better, because these companies are very highly weighted😂 clearly you can lose in the end against the ETF but so has at least the chance to beat him 🤷🏽‍♂️

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Jonas Reichert@Jonas9221

2Yr

@SharkAce The probability of losing to him - especially if you want to stay in the market for more than 1-2 years - is extremely high...

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SharkAce@SharkAce

2Yr

@Jonas9221 in the long term, yes, but we are only talking about short periods of time (4 months), so that the dividend received and reinvested by the next payout generates more than it would have done with the ETF.

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TomTurboInvest@TomTurboInvest

2Yr

@SharkAce It was precisely this approach that saved my performance in 2022. This was the only way I could leave the year with a plus.

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Jonas Reichert@Jonas9221

2Yr

@SharkAce Ok. Sure - in the short term it can of course work!

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Mr.T@360

2Yr

Thanks!lgebookmarkt. Suggestion will be followed 🙂

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Tobias Schuck@Schuckinator

2Yr

Interesting to what result you get in the end :) I currently have the distributing variant because the feeling of regular returns keeps me in line. Certainly not only for me a helpful support to not sell prematurely in falling prices :)

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TomTurboInvest@TomTurboInvest

2Yr

@Schuckinator Dividends are a good lifeline in bear phases

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Kevin E.@KevinE

2Yr

@Schuckinator From my point of view, it also makes sense to have more freely disposable capital - from a certain dividend amount onwards. For me, it's currently around €200 from investment income. As a rule, these also go into the savings quota. But I'm flexible and can use it before Christmas for gifts or for unexpected repairs to the car, for which I don't want to touch the nest egg.

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Tobias Schuck@Schuckinator

2Yr

@KevinC I plan to invest the dividends in individual stocks when the payments become somewhat higher. Quasi the ETF continue to save normally as an anchor in the portfolio and then build up a widely diversified portfolio with the income. But until then it is still a long way 😁

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Cäptain Price@RicePrice

2Yr

Sounds very good and then how is it when I loan my portfolio at the bank? Is that possible? If so, there are no taxes on a pledge? Or am I now wrong?

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TomTurboInvest@TomTurboInvest

2Yr

@RicePrice Unfortunately, I have no idea, I have not yet done. But up to a certain % rate you will be able to deposit your securities account as collateral. Fees are usually a matter of negotiation for financing.

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Cäptain Price@RicePrice

2Yr

@TomTurboInvest yes what I have found out depending on diversified Protfoilio of 60 - 80% loanable. Thus I would sell the rest and save even more taxes. This is my question that is still open to me, but goes only from 100000 € and the higher the more the interest amount that you have to pay only quarterly. It would be good if you can sell this to the bank.

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Steffen@MyDepotUpdate

2Yr

Very important topic. Thanks for sharing !🎉

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Bingpot@theflyingsquirrel

2Yr

Question to all: I plan the tax allowance already otherwise later timesauszuschöpfen, makes then still distributing more sense or then rather reinvesting with ETFs, what do you think? so purely yield-technically seen

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TomTurboInvest@TomTurboInvest

2Yr

@theflyingsquirrel what do you mean by later? As far as I know, the unused tax allowance expires at the end of the year, you can't accumulate the unused one... but I'm not a tax expert and certainly not for DE

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Mario Fritzsche@Simple_Rick

2Yr

According to the latest knowledge, it is so that the flat tax rate accrue to the accumulating ETFs, or not!

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TomTurboInvest@TomTurboInvest

2Yr

@Simple_Rick if you mean the advance lump sum in DE, then for 2023 yes, payable at the beginning of 2024. this is always dependent on the interest rate. in AT, income equivalent to distributions is always taxable.

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