Congratulations, great milestone! I have a question, your five ETF positions have a lot of overlap, which could save costs, why did you choose this allocation?
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@Olaf1789
Hello Olaf,
Thank you!
I know about the overlaps. You're welcome to tell me how I could save costs, I'm just not sure if that's possible 😉
The division is easy to explain.
I started with the Spider MSCI ACWI IMI until it reached around 150k. My wife opted for the distributing HSBC MSCI World. Since she wanted an accumulator after all, she switched to Xtrackers. In the end, she switched to the Vanguard FTSE All-World and filled it up to 150k.
The two previous ETFs were always in the black and we had no savings allowance left over for a cost-neutral swap.
We are currently both saving in the Ishares MSCI ACWI until it also reaches the size of the other two flagships.
Hello Olaf,
Thank you!
I know about the overlaps. You're welcome to tell me how I could save costs, I'm just not sure if that's possible 😉
The division is easy to explain.
I started with the Spider MSCI ACWI IMI until it reached around 150k. My wife opted for the distributing HSBC MSCI World. Since she wanted an accumulator after all, she switched to Xtrackers. In the end, she switched to the Vanguard FTSE All-World and filled it up to 150k.
The two previous ETFs were always in the black and we had no savings allowance left over for a cost-neutral swap.
We are currently both saving in the Ishares MSCI ACWI until it also reaches the size of the other two flagships.
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@Wealth-Accelerator I would concentrate on one of them due to the large overlaps, whether the money buys Nvidia in one ETF or Nvidia in five ETFs doesn't matter, but then you pay 5x the ETF fees. I'm not a professional and I'm still a long way from half a mil, but I just noticed this point. Maybe calculate a swap or leave 4 and save 1. Just my thoughts on this.
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@Olaf1789
A swap would cost me a five-figure sum and is not an option for me. And you're right that it doesn't matter whether you buy NVIDIA in one ETF or another.
But where I don't think you're right is in the costs.
Assuming an ETF costs 0.2% TER.
Then, if I have 500,000 in this ETF, I pay 1,000 euros a year in fees.
If I have 5 ETFs with 100,000 euros each, I pay 5x200 euros in fees. So the same amount.
And I also look at transaction costs.
I never invest in overlapping ETFs at the same time.
And I think there are a few more advantages. The decisive one for me is the legislation that has been in force in Germany for a year now regarding exit taxation.
Since this change, ETFs into which more than 500,000 euros have been paid are taxed on departure.
Of course, this limit can be lowered at any time. That's why I'm keeping my distance.
This also makes it easier to save without transferring a custody account. This is because the FIFO principle applies to the sale of units. If I then sell the last ETF I saved in first, I have a significantly increased tax deferral effect in the oldest ETF.
So you see, I have a fairly good overview of what I'm doing. But there is always room for improvement.
Thank you and good luck 👋🏼
A swap would cost me a five-figure sum and is not an option for me. And you're right that it doesn't matter whether you buy NVIDIA in one ETF or another.
But where I don't think you're right is in the costs.
Assuming an ETF costs 0.2% TER.
Then, if I have 500,000 in this ETF, I pay 1,000 euros a year in fees.
If I have 5 ETFs with 100,000 euros each, I pay 5x200 euros in fees. So the same amount.
And I also look at transaction costs.
I never invest in overlapping ETFs at the same time.
And I think there are a few more advantages. The decisive one for me is the legislation that has been in force in Germany for a year now regarding exit taxation.
Since this change, ETFs into which more than 500,000 euros have been paid are taxed on departure.
Of course, this limit can be lowered at any time. That's why I'm keeping my distance.
This also makes it easier to save without transferring a custody account. This is because the FIFO principle applies to the sale of units. If I then sell the last ETF I saved in first, I have a significantly increased tax deferral effect in the oldest ETF.
So you see, I have a fairly good overview of what I'm doing. But there is always room for improvement.
Thank you and good luck 👋🏼
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•@Wealth-Accelerator Yes, those dear taxes ;) Seems like you know what to do, I'm looking forward to your next few years 😁
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