The simplest dividend strategy that always works

You buy / save four dividend-paying dividend ETFs such as:

- iShares EM Dividend, A1JNZ9, 8,0% dividend yield, four distributions / year, 0.65% TER, -3% 5-year performance

- iShares STOXX Europe Select Dividend 30, 263529, 6,4% Dividend yield, four distributions / year, 0.32% TER, +38% 5-year performance

- iShares Asia Pacific Dividend, A0J203, 5,8% Dividend yield, four distributions / year, 0.59% TER, +11% 5-year performance

- iShares UK Dividend: A0HGV6, 5,4% Dividend yield, four distributions / year, 0.40% TER, +19% 5-year performance

> You could just as well take other dividend ETFs with attractive payouts or more than four to increase the number of payouts.

>> When comparing the performance of dividend ETFs, you must of course add the annual distributions. add. Some dividend ETFs only pay out a pathetic 2% to 3% p.a. and then of course had more price performance. << Swipe

15 advantages of this strategy

1) 16 distributions per year is very motivating (especially for beginners). With five different ETFs of this type it would be 20 per year.

2) These distributions are reliable, because if a company/stock cuts or cancels its dividends, it is automatically dropped from the respective index. Other shares move up. Always top of the dividend league in your portfolio.

3) The ETFs mentioned can be invested in free of charge with almost all brokers and banks.

4) By diversifying the many shares in several ETFs, the risk associated with individual shares is avoided.

5) You save a lot of valuable time, as it can be a full-time job to follow all the news, analyses, quarterly reports, annual reports, ratings, etc. of e.g. 20-30 individual stocks. That's what an analyst does. But most people already have a full-time job. Many have a degree, training, family & children, hobbies, duties, do sport, want to travel or have to look after relatives. If you waste countless hours on shares in order to earn a few euros more a year, depending on your position, your hourly wage is often just a few cents. You might as well go to work regularly, including tax.

6) Dividend payouts are often increased so that dividend growth is recorded.

7) The dividends collected are not spent on consumption, but reinvested in the weakest ETF every six months. This gives you even more dividend growth.

8) If you get a pay rise, you also increase the savings plan installments again. This increases dividend growth again.

9) As a result of points 6-8, you will eventually receive a 13th salary from dividends alone.

10) If you stick with it for a few more years, you will then collect five-figure dividends. Then people will arrive and ask how you managed that. It's easy to work out when you'll personally reach that point.

11) Even if you have to cancel your savings plans at some point due to an emergency, you will continue to collect your 16 dividends every year for the rest of your life. And then you pass on these ETFs and your descendants will collect 16 times a year for the rest of their lives. So it's very sustainable.

12) In crises and crashes on the financial markets, you continue to collect your dividends while others mourn their price losses. This gives you peace of mind and prevents "shaky" hands / ill-considered panic selling out of fear.

13) The constant distributions allow you to comfortably utilize your annual allowance without any trading, selling or market timing. It is so simple. Also suitable for junior portfolios.

14) This strategy helps to create a passive income, which then increases the measly German pittance pension very well after decades. The alternative is a deposit bottle pension. No thanks.

15) After a few years, you will become familiar with the phenomenon of collecting double-digit personal dividend yields. More than 10% is quite realistic, as you had much lower purchase prices years ago and the dividends are constantly being increased. It was the same for me a few years ago. I had the aforementioned UK Dividend A0HGV6 and Euro Stoxx 30 Dividend Select 263529 and after only a few years I already received 11% personal annual dividend yield. No overnight money or fixed-term deposit can match that. Unfortunately, I then sold both ETFs to sink the money into Wirecard. Biggest mistake. Please don't be as stupid as me. Thank you.

Maybe a nice post to save with the bookmark at the bottom right

> Another tip: Please check the ETF data directly on the issuer's website. Broker/bank data is often out of date and therefore incorrect.

>> What other advantages does this strategy have? How do you like it? I have explained it to many beginners and they have been very happy with it for years and are making great money without stress and work.

>>> In the podcast "Buy High. Sell Low" episode 17 this ETF strategy is explained in detail with a calculation example. Link in profile description. Link: https://open.spotify.com/episode/0LzAFILz0zNiErh5lCJOvS?si=16oQ7uLXQ3WGGXdfeIvJnA

#etf
#etfs
#ishares
#blackrock
#dividende
#dividenden
#dividend
#sparplan
#juniordepot
#strategie
#traderepublic
#aktien
#aktie

Junior custody account

Investing money for children

Friends,

As I would like to invest something for the future for my three-year-old godson in addition to material gifts, I have looked into the alternatives.

Disclaimer I: I'm not a tax consultant, I googled my knowledge together and used sample calculations etc. based on my own knowledge - so please feel free to challenge me

Disclaimer II: After I finished my research, I have the Post from @freakyfinance
saw . who had already looked at the whole thing in a similar form a year ago (thanks for that). However, there is a different focus there in part, so be sure to read it as well.

Tdlr: Optimal tax savings with a custody account in the child's name, but with very high amounts there may be problems with health insurance and BAfÖG. If you invest in your parents' name, you forgo the tax savings, but have fewer problems with health insurance and BAföG & can give away up to EUR 400,000 per child tax-free. As a "third" person, this is generally difficult - it is better to talk to the parents in advance. If a custody account is invested in a child, then profits should be realized and reinvested in order to minimize the tax burden.

Alternative 1: Custody account investment in own name

A separate custody account is set up with a broker in your own name, into which you can then pay and invest as you wish. After a certain cut-off date, the custody account can then be transferred/given as a gift. However, gift tax is then also payable by the donee, as this is a stranger - according to the law - and applies even to very small amounts (from EUR 20,000). In addition, as you formally have your own securities account, you are also subject to your own taxation; if the saver's allowance has already been used up, the tax gnaws at the longed-for compound interest for the godchild.

The disadvantages clearly outweigh the advantages:

• Gift tax (from EUR 20,000)
• Capital gains tax (if exhausted)
• The custody account only belongs to the recipient after the gift has been made
• If other people wish to make a contribution, they must rely on the goodwill of the custody account holder.

Alternative 2: Parents set up a custody account for the child

In this case, the custody account belongs to the child for legal and tax purposes, and the parents manage it in trust until the child reaches the age of 18. In addition to the saver's lump sum (EUR 1,000), the basic tax-free allowance (EUR 11,604 in 2024) also benefits here, as the child does not yet have any taxable income. In this respect, up to EUR 11,604 of tax-free investment income could be generated per year. A non-assessment certificate must be applied for from the tax office every 3 years. However, the deposit assets are also taken into account when applying for BAföG at a later date; in this case, the entitlement does not apply from assets of EUR 15,000. Furthermore, as soon as the child's annual income (including capital income) exceeds EUR 5,820 (EUR 485 per month), it is no longer covered by the parents' health insurance. Additional information for high performers: a child costs around EUR 110 - 150 per month in private health insurance.

Advantages:

• Tax-saving effect (and therefore faster asset accumulation)
• Custody account belongs directly to child and can therefore be part of financial education
• One face to the customer: one custody account that everyone can transfer to

Disadvantages:

• Parents must have a certain level of financial education
• Complexity: BAföG, family insurance...e.g. mini-job on the side more difficult if higher capital income is already achieved (health insurance company may cancel co-insurance)

Alternative 3: Parents' custody account investment

Similar to 1, except that the parents have set up an additional custody account in their name for the child (it is generally advisable to set up a separate custody account to ensure clear separation). Friends and relatives can then pay into this account and the parents then invest it. The custody account is then transferred on a certain date, whereby - due to the close relationship - up to EUR 400,000 can be gifted tax-free. The disadvantage is that the child's tax-free allowances are not used; however, there is no need to worry about the child being excluded from health insurance due to the high capital income. It can also be advantageous for BAfÖG, as it is not the parents' assets but their income (including capital income) that is taken into account.

Advantages:

• Simplicity
• One custody account that everyone can transfer to
• Tax-free gift of up to EUR 400,000

Disadvantages:

• Parents must have a certain level of financial education
• Capital gains tax (if used up by themselves)
• The custody account only belongs to the recipient after the gift has been made

Where to open the junior custody account:

Finanzfluss recently published a Video in which the best junior custody account providers were presented. The current results of the comparison can be found >hier< to be found. The winners here are currently ING - in particular due to the free ETF savings plan and the minimum savings rate and finvesto, the latter probably due to the affiliate program ;) - Fun, here the costs for the one-off investment are probably particularly low, which could be particularly interesting for taking advantage of tax benefits (keyword profit realization and reinvest), but more on this in the later numerical example. As I personally don't know finvesto, I would open the custody account with ING.

Numerical example I:

Now that we have decided to invest something for our little ones, we need to optimize the whole thing again within the constructs. To make the various options more tangible, I have brought along a few numerical examples:

The following sample calculation is based on the following meta-premises:

• Investment period: 18 years (securities account will be closed when you reach the age of majority)
• Investment amount p.a: EUR 3,000 (child benefit 2023 x 12)
• Base interest rate for advance lump sum calculation: 2.55% (base 2023)
• Investment construct: ACWI ETF ($ISAC & $VWRL ), equity allocation: > 51 %
• Tax exemption for advance lump sum calculation: 30%
• Yield forecast: accumulating ETF = 7 %, distributing = 5 % + 2 % dividend
• Tax rate: 26.375 % (capital gains tax + solidarity surcharge)

Option 1:

Depot to child invested & accumulating ETF / results:

• Deposits: EUR 54,000
• Deposit value: EUR 105,567
• Settled via advance lump sum: EUR 12,668
• Taxable profit on sale: EUR 38,899
• Taxes: EUR 10,260
• Amount paid out: EUR 95,307

Option 2:

Deposit to parents invested & accumulating ETF / results:

• Deposits: EUR 54,000
• Deposit value: EUR 100,914
• Settled via advance lump sum: EUR 12,309
• Taxable profit on sale: EUR 34,605
• Taxes: EUR 9,127
• Amount paid out: EUR 91,787

Option 3:

Deposit to child invested & distributing ETF / results:

• Deposits: EUR 68,105 (reinvestment of the dividend)
• Deposit value: EUR 104,642
• Settled via advance lump sum: EUR 0 (if dividend > advance lump sum = 0)
• Taxable profit on sale: EUR 36,537
• Taxes: EUR 9,637
• Amount paid out: EUR 95,005

Option 4:

Deposit to child invested & accumulating ETF. Profits are realized and reinvested at the end of each year in order to make greater use of the tax-free allowance (trading fee EUR 10 p.a.) / Results:

• Deposits: EUR 105,237 (reinvestment of gains)
• Deposit value: EUR 105,237
• Settled via advance lump sum: EUR 0 (if book profits > advance lump sum = 0)
• Taxable profit on sale: EUR 0
• Taxes: EUR 0
• Amount paid out: EUR 105,237

Conclusion:

As expected, the parent deposit option is the worst, but the discount is smaller than I would have expected. Here you have to assess for yourself whether the insurance against the risk that your child will blow the money on your head at 18 is worth EUR 4,000 - 14,000. Options 1 & 2 are not much different, mainly due to the current base interest rate of 2.55%, which is included in the upfront lump sum calculation at 70%, resulting in a similar tax rate to a 2% dividend ETF. The lower the prime rate, the better the option of the distributing ETF in direct comparison. Option 4 generates the most effort, as profits have to be realized once a year, but this is well remunerated. If this strategy is chosen, it is important to opt for a custody account with low one-off investment fees.

Numerical example II:

Here, the custody accounts are held until the end of the 35th year of life and then liquidated, e.g. for a house purchase. The assumptions as above apply, with the following adjustments:

• Investment period: 36 years
• Investment amount up to the end of 20: EUR 3,000 p.a.
• Investment amount 21-25: EUR 0 (studies)
• Investment amount 26-36: EUR 6,000 p.a. (work & increase in savings rate)
• From 26, you start working and therefore no longer have a basic tax-free allowance.

Option 1:

Deposit to child invested & accumulating ETF / results:

• Deposits: EUR 123,000
• Deposit value: EUR 453,632
• Settled via advance lump sum: EUR 86,334
• Taxable profit on sale: EUR 244,298
• Taxes: EUR 64,434
• Amount paid out: EUR 389,198

Option 2:

Deposit to parents invested & accumulating ETF / results:

• Deposits: EUR 123,000
• Deposit value: EUR 428,196
• Settled via advance lump sum: EUR 81,539
• Taxable profit on sale: EUR 223,658
• Taxes: EUR 58,990
• Amount paid out: EUR 369,207

Option 3:

Deposit to child invested & distributing ETF / results:

• Deposits: EUR 218,735 (reinvestment of the dividend)
• Deposit value: EUR 447,238
• Settled via advance lump sum: EUR 0 (if dividend > advance lump sum = 0)
• Taxable profit on sale: EUR 228,503
• Taxes: EUR 60,268
• Amount paid out: EUR 386,970

Option 4:

Deposit to child invested & accumulating ETF. Profits are realized at the end of each year and reinvested in order to make greater use of the tax-free allowance (trading fee EUR 10 p.a.) until the start of working life (26), thereafter no more profit realization per year. / Results:

• Deposits: EUR 254,718 (reinvestment of profits until 26)
• Deposit value: EUR 468,841
• Settled via advance lump sum: EUR 54,066 (years 26 to 36)
• Taxable profit on sale: EUR 160,057
• Taxes: EUR 42,215
• Amount paid out: EUR 426,626

Conclusion:

The parental custody account option has a more painful effect here, with reductions of EUR 20,000 to EUR 57,000 compared to the other options. The clear winner here is the tax-optimized investment (option 4). The differences between options 1 & 3 are negligible and can swing in one direction or the other if the base interest rate changes.

Special case: transferring a parental custody account to a child:

Of course, you could now come up with the idea of simply giving your own assets to the child at birth and then letting them grow tax-free so that you can use them again later. Especially as EUR 400,000 per parent can be transferred to the child. However, this entails a number of risks, including the fact that a gift from the child to the parents is only possible up to EUR 20,000 per parent. The gift from child to parent would therefore overcompensate for the tax burden saved, making it a loss-making transaction. There may be other options such as buying a property etc. but that would be going too far & I am not a tax expert.

#juniordepot
#etfs
#vorabpauschale
#dividende
#steuer

Why I already rely on the dividend strategy at a young age

Moin,

after @Fabzy doesn't seem to get away from the dividend strategy and has now already published the second or third post about it (sorry, raccoons can't count that well) in which he tries to understand why young people go for a dividend strategy, I would like to publish my view on it. Since we are both almost the same age, I guess our start could be (and is) very similar. Yet, we both follow different strategies. The discussion about dividend strategy or growth strategy or a mix is certainly far from over and yet it is good to talk about it and get to know other perspectives. Hence my contribution today. Perhaps it will then become even clearer why I (and many others) rely on a dividend strategy, even though there is still a lot of time until retirement and returns are being missed.

First of all, I have to get something off my chest:

This is of course my personal opinion and strategy. I make no claim to correctness or perfection, nor to completeness, nor to having found the golden path. I am well aware of the possibility of missed returns. In the end, however, it is not always just about returns and about the highest possible portfolio level at time X, but also and above all about feeling good and about quality of life. @Fabzy tries to find a reason in his article why especially young investors rely on the dividend strategy, although they still have an investment period of easily 30-40 years and thus have the best conditions to take any growth. Irrespective of the fact that he admits that he is an old wizened turtle and I am a young filigree raccoon, the answer to this, as he has also noted himself (among other things), is cash flow.

Foreword

There are virtually an infinite number of variables that lead us to a strategy that is right for us. Of course, education and experience in youth are part of it. Also the possibilities to get information are part of it. A strategy should of course be fixed, but not set in stone. In life, a strategy can change. Also several times. But it should always fit the circumstances of life.

Similar to the well-known raccoon saying everyone is his own pizza baker. While some go for full growth, others prefer to take it easy and bet on supposedly safer shares, while also collecting dividends, which additionally slows down the company's growth.

But in the end, whatever feels best for you is the right thing to do.

Why did I choose the dividend strategy?

In my particular case, there are three points that make me go for a dividend strategy.

Point 1 is safety. I pretty much fell flat on my face at the beginning of investing. Typical fail, as it probably happened to several more people in the beginning, I hope. On the Internet you read about quick money and seemingly a surefire deal. A stock is mentioned, preferably a Canadian penny stock (what a penny stock is, of course, is unknown, but it doesn't matter. Canadian stock exchange, can only be safe). Briefly "researched" and found that the price has made just under 400% in 2 weeks. Many comments available, all agree (this is certainly like the reviews on HolidayCheck). Quick in before it's too late. Well and as luck would have it, that was exactly the top... stop loss? What a nonsense. Much too complicated at the beginning. Besides, this is only a short setback anyway. Well, ignorance is no excuse.

So here's an absolutely important and cautionary note: do your own research, understand the company, and don't just buy anything because it's somewhere on the Internet (including Instagram and getquin). And if you do, then at least set a stop-loss order!

By the way, the investment in question is currently at -92%.

This experience caused me to bet on rather less volatile stocks, but at least on well known names. I had burned my fingers. Of course, growth stocks are in no way comparable to Canadian penny stocks. This is just for the sake of completeness.

Point 2 is motivation. It simply motivates me when I regularly receive dividends in my account. What's more, thanks to savings plans, they increase with each month, so you can see an increase month after month and year after year. It's fun and motivating to keep going. Some don't need this motivation and continue to save even if the deposit value sinks and sinks and sinks and don't worry about it. I am glad for this motivation and needed it even more when I started and the mishap with the Canadian penny stock happened to me.

This brings me to

Point 3 and thus the core of the post:

Cash Flow.

Yes, it is cash flow (and the taxes associated with it) that diminish returns and hurt compound interest. But it's that very cash flow that brings me what I already want today. Financial freedom and additional income.

Of course, Financial Freedom can be defined very broadly and is probably also somehow different for everyone.

For me, this freedom means that I can already buy things today, from money that passively works for me.

What is the goal anyway?

At the beginning, of course, everyone must first ask themselves what their personal goal is. From this, a part of the strategy could be derived.

You could ask yourself the following questions:

• Do I want to close the pension gap?
• Do I want to retire earlier?
• When do I want to start working less or not at all?
• Am I willing to sell shares later?
• At what point do I want financial freedom?
• What does being free mean to me?
• What is needed to achieve this?

Now there are of course different calculations that can be made. How much do I have to save and for how long in order to have the following deposit balance later with this or that return. With it I can generate then depending upon whether with share sales or without share sales so and so long my payouts.

What is my goal now?

My personal goal is on the one hand to at least close the pension gap, rather to overfill it. On the other hand, I would also like to be able to enjoy financial freedom as early as possible, with less volatility than would be the case with growth companies.

I have deliberately not set myself a concrete (i.e. financial) target.

I want to get the maximum possible out of it within my framework, and what comes out extra for retirement is good. If it's even so much that I can retire at 55, then that's all the better.

Roughly speaking, my goal can be divided into the following areas:

• Reduce/close/exceed pension gap
• as little volatility as possible
• Enable a certain degree of freedom already now

So, as you can easily see, my goal is not the maximum possible return. Nor is the ostensible goal to have one or two million on target date X. My goal is simply to generate additional income for retirement while already having a second income within a volatility framework that is as small as possible.

I'm well aware that returns will fall by the wayside, but that's the way it's planned.

How do I proceed to achieve my goal?

Many ways lead to @Barstens garbage can.

As individual as the personal goal is, as individual is the way to get there. You can try to beat the market, you can buy growth stocks, ETFs (and there again umpteen different variations), dividend stocks, dividend growth stocks, or a combination of all, etc. Everybody has to find his own way. The important thing is to stay true to your strategy, but also to question and review it regularly.

I use a combination. Not just one of pizza and banana peel but of dividend growth and higher dividend yield.

There are several reasons for this:

My ETF portfolio will soon be self-sustaining. So if I have to reduce my savings rate because something unforeseen happens, I can still feed my ETF portfolio out of itself with more shares. So despite the fact that the savings rate is going away, the savings rate will continue.

Of course, this is a bit of self-deception, because with an accumulator I also reinvest the dividend, just before I get it into my account.

Nevertheless, it contributes to my well-being (psyche is also an important factor for a raccoon), but at the same time it has another advantage, which I will go into in a moment.

I also have a stock portfolio that consists of stocks with higher dividend yields, solid dividend stocks and dividend growth stocks. I use the higher dividend yield to generate additional income in the first place, thus broadening my portfolio. Of course, the dividend growth stocks don't yield that much yet; their time will come later. They are more or less an investment in the future.

So to diversify in the first place I take a little higher risk, which is balanced by solid dividend stocks (in the overall view).

I am aware that I am not beating the market with this. However, that is also not my intention. I keep the stock portfolio to get different dividends every month. It is simply fun to see so many companies in the portfolio.

All this leads me to the most important reason: Financial freedom.

As described above, this topic is also very individual.

What does financial freedom mean (for me)?

For many (perhaps even most), financial freedom means no longer having to go to work, living on passive income and no longer having to worry about the financial future.

Of course, this requires a high savings rate and/or a frugal lifestyle (or of course a very lucky hand when investing).

For me, financial freedom starts earlier and I would like to broaden it and talk not only about freedom but also about security. This is of course very subjective and someone focused on pure growth stocks will also feel secure or free. Therefore, again: It's very individual and every person is just different.

I set small "goals" for myself and once those are achieved, they are magnified. In doing so, I simply know that I can but don't have to and that is a certain, albeit small, security for me.

As an example: I want to be able to buy 1kg of bananas every week just from dividends so I can pack my pizza. Then the next goal would be an additional 1kg of carrots each week so I can ride a donkey to the supermarket, etc. (🖕🏻)

My goals to start: eating out once a month (right, not just Mäcces). Then have gym membership (more expensive in the village than in the city) paid by dividends. Then have internet and cell phone contract paid, etc.

Knowing that I can theoretically have dividends pay for that in the future is just good.

My car is currently 20 years old. I have a compelling need for it. It's always reliable, but it could just as easily fall apart tomorrow. Knowing that I could then just spontaneously go to a dealership and lease a car while the lease payment is paid by dividends is just comforting.

I could also plan a vacation. Finally to Barsten's Beerbar and the whole trip paid for by dividends. Sure, there would be an annual dividend on it but it would be possible even without that I put aside something from the salary explicitly for vacation.

Next goals: Pay loan installment for the house, replace 450€ job, etc.

So I increase the goals and that allows me just now a certain financial freedom. I have the possibility to use the money for all that. But as long as I don't want (or need) to, the dividends will be re-invested. The security this gives me is: Should my disposable income decrease (rising prices, lower salary due to forced job changes, etc.) and I can only live from salary to salary, then I know that I can still afford certain things here and there through the dividends without any further action. Even without selling shares and thus irretrievably cutting the return.

Summary

The decisive point, and this closes the circle to the initial question, is therefore largely: What is my goal for the future?

As individual as this answer is, so individual is every strategy.

It therefore makes no difference at all whether you pursue a dividend strategy at the age of 20 or are still fully committed to growth at 75. Nobody knows the reasons for this and these are also very difficult, if not impossible, to explain.

My strategy is of course only one of many. Nevertheless, I hope that it @Fabzy is now a bit clearer why one could drive a pure dividend strategy at a young age.

Slow turtles sometimes just need a little longer 😊

Have a great mid-week evening.

#dividende
#dividendenstrategie

My "Dividend every month" share savings plan. In February it was now 72 months ... 6 years 🤩😳

The portfolio stands at around €46,800. The total return (share price + dividend) is almost 39%. With the savings plan, the average annual return over the last 6 years is therefore currently around 11.1% - not bad at all for a savings plan 😅

$MSFT
$AAPL
#dividende
#aktien
#sparplan
#depotupdate

Country weightings in the portfolio

Reading time: approx. 5min (fast), approx. 8min (slow, @leveragegrinding 😛), think so 3min (@DonkeyInvestor 🙉)

In the last few days I have been thinking about the weighting of some regions in my portfolio. There is always a hot debate about how much you should weight the US, Europe, Asia and the rest of the world in your portfolio. Should one have "China stocks" at all or how much USA share is too high?

Especially when it comes to the weighting of US corporations there is a hot debate: for some an overweighting of US corporations is perfectly fine, for others it is a cluster risk. In the MSCI World for example, the USA is weighted at 60%. That is why in the classic 70/30 strategy MSCI World ETF as well as an Emerging Markets emerging markets ETF is added. It gets even more complex if you add a Europe ETF on the STOXX Europe 600 is added.

Something that rarely plays a role in the debate, however, is the fact that this weighting only reflects the countries of origin of the stock corporations. Corporations like Apple $AAPL , Microsoft $MSFT or Google $GOOGL may be U.S. companies on paper, but they generate their sales worldwide. A LVMH $MC may be from Europe, but generates most of its sales in North America and Asia. Toyota $7203 is from Japan, but generates sales worldwide.

I think you see the problem: important to get an impression of your own regional exposure exposure are not the countries of origin of your shares but rather the question of where the sales are generated are generated. I wanted to get to the bottom of this question specifically for my portfolio.

Inventory

In my personal portfolio, the distribution of individual position sizes (as of May 24, 2023) looks exactly like this:

19.3% Apple $AAPL

11.1% Costco $COST

9.9% Allianz $ALV

9.5% VICI $VICI

8.3% United Health $UNH

5.6% Microsoft $MSFT

5.4% Visa $V

4.4% KLA-Tencor $KLAC

4.1% BJ's Wholesale Club $BJ

4.0% Starbucks $SBUX

3.4% Paychex $PAYX

3.3% DEFAMA $DEF

3.1% Air Products & Chemicals $APD

2.9% Rio Tinto $RIO

2.7% McDonald's $MCD

1.4% Greencoat UK Wind💚 $UKW

0.5% Coca Cola $KO

This corresponds to a weighting of 81.4% USA and 18.6% Europe. Mind you, this weighting corresponds to a weighting according to countries of origin of the companies. So do I have a huge cluster risk as far as the USA is concerned? In addition, there are no Asian shares in my portfolio.

Now I have made the effort (in a sweaty manner) to all annual reports of the 17 companies on the corresponding investor relations pages. In some cases, sales are broken down by region. Unfortunately, it is clear that not every company provides the same breakdown. For example Apple breaks down its sales in [1] according to Americas, Europe, Greater China, Japan and Rest of Asia Pacific on. The situation is different for Visawhere in [2] sales are only broken down by U.S. and International is broken down.

After a lot of toing and froing, I finally decided to split into the regions North America, Europe and Asia & Rest of the World to the rest of the world. North America includes the USA, Canada and Mexico. Europe is mainland Europe and Great Britain. The last category then includes China, Japan, South Korea, Australia and everything else.

Just about every company reports the percentage of revenue that is generated in the US. As mentioned in the example of Visa, this is not necessarily useful to find out the share of sales for Europe and Asia if reported according to the principle "USA and the rest of the world".Partly I had to find values with a "good guess" guess. Smaller researches in the net helped me here. The last decimal place is not important here, but rather a correct order of magnitude of the sales distribution.

Result

Before I present the results of my analysis, I would like to say a few words about the methodology. In my calculation, the sales shares of the individual companies are weighted according to portfolio share.

ExampleApple has a 19.3% weighting in my portfolio and generates 18.8% of its sales in Europe. The 18.8% European share is then weighted at 19.3% in my calculation. Apple thus provides for a roughly 3.6% European share in my portfolio.

Without further ado, here is the result of the weighted sales distribution by region in my personal portfolio:

56% North America | 24% Europe | 20% Asia & Rest of World

The difference to the country weightings in my portfolio are therefore:

-25.4% North America | +5.4% Europe | +20% Asia & Rest of the World

Despite an 81.4% weighting of the USA in my portfolio, only 56% of sales are generated in North America and this despite the fact that I have real USA-pure-plays like VICI and BJ's Wholesale, which generate 100% of their sales in the US, are highly weighted in the portfolio. The European share is about 5% larger than the countries of origin of my companies would suggest and despite not having a single Asian company in my portfolio, 20% of the weighted sales are generated in Asia and the rest of the world.

Conclusion

Diversification by country is important. However, in my opinion, too much attention is paid to the countries of origin instead of really looking at where the companies' sales are actually generated. Unfortunately, there is no quick way to find out. The way over the individual investor relations sides of the enterprises is laborious and nevertheless incomplete. Here I would wish for greater transparency from some companies. Exemplary here were above all Apple and KLA-Tencor.

In addition to the pure "sales risk", it is of course still necessary to consider the political- and regulatory risk. I can sleep soundly with the revenue distribution in my portfolio even if it might be a nightmare for others.

What is your opinion on this?

Sources:

[1] Apple Financial Report 2022: https://annualreport.stocklight.com/nasdaq/aapl/221338448.pdf

[2] Visa Financial Report 2022: https://s29.q4cdn.com/385744025/files/doc_downloads/2022/Visa-Inc-Fiscal-2022-Annual-Report.pdf

#dividende
#portfoliofeedback
#dividendendepot

🌬️🍃𝐀𝐤𝐭𝐢𝐞𝐧𝐯𝐨𝐫𝐬𝐭𝐞𝐥𝐥𝐮𝐧𝐠 🌬️🍃

𝑮𝒓𝒆𝒆𝒏 𝑬𝒏𝒆𝒓𝒈𝒚 𝒎𝒂𝒍 𝒂𝒏𝒅𝒆𝒓𝒔!

You asked for it and here is the analysis! I am asking the leadership team, consisting of. @MScottInvesting
@GoDividend
@Divmann
@California_Dreamin
@InvestmentPapa
@christian
@Barsten
@Der_Dividenden_Monteur
@Simpson
@Dr27589
@RealRose
@Klambam@RoronoaZoro
@Zackdela79
@Doe to contact me to transfer my consultant fee. Normally, advance payments are not common. The matter is accordingly urgent!

Greencoat UK Wind PLC $UKW

GB00B8SC6K54

𝗜. 𝗨𝗻𝘁𝗲𝗿𝗻𝗲𝗵𝗺𝗲𝗻𝘀𝗽𝗿𝗼𝗳𝗶𝗹:

Greencoat UK Wind PLC is a closed-end investment company based in the United Kingdom. The company has a diversified portfolio of interests in approximately 40 operating wind farms in the United Kingdom with a total net capacity of 1,289.8 megawatts (MW). The company's portfolio consists of investments in special purpose vehicles (SPVs) that hold certain wind farm assets. [1] [2] The strategy, which specifically targets dividend streams, is also explicitly communicated on the company's website.

Greencoat UK Wind PLC is managed by Greencoat Capital LLP, which owns other investment trusts. Greencoat Renewables PLC is also worth mentioning here. Greencoat Renewables also invests in wind farms in Ireland, Sweden and France. In addition, Greencoat Renewables plans to establish a further foothold in the solar market, which at this point in time is hardly existent. The business model is similar and based on dividend streams.

In the pictures I have added a map showing the wind farms in which Greencoat UK Wind (UKW) is invested.

The company's investment objective: to provide investors with an annual dividend that increases in line with retail price index (RPI) inflation, while maintaining the capital value of the investment portfolio on a long-term real basis through the reinvestment of excess cash flow and the use of debt. [1]

According to NAV Factsheet June 2022:

"The Company's aim is to provide investors with an annual dividend that increases in line

with RPI inflation (7.72p with respect to 2022) while preserving the capital value of its

investment portfolio in the long term on a real basis through reinvestment of excess cash

flow." [6]

So you can already see that UKW is not a typical Green Energy stock. UKW is simply an investment company focused exclusively on wind power in the UK. But which wind turbines does UKW invest in? There are several and the operators are large corporations that you might recognize (list not exhaustive):

-RWE

-EDF

-Orsted

-BayWa

A large portfolio comes directly from RWE. The largest turbine manufacturers in these wind farms are Vestas (44%) and Siemens (23%). [3]

There are different shareholdings by UKW in the wind farms. In the appendix an overview of the wind farms, their operators and the share ratio of UKW. [3]

Wind farms by region according to NAV Factsheet June 2022 and in brackets according to GB 2021 [3]:

-Scotland: 47 (46%)

-England: 37% (38%)

-Northern Ireland: 11% (11%)

-Wales: 5% (5%)

But how exactly does FM generate revenue and profit? Quite simply! As an investment company with corresponding holdings, UKW mainly receives dividends. In addition, the investments and wind farms must be valued annually, which is done using a DCF valuation method. If the valuations increase, this generates a revaluation, which is directly reflected in the sales. It is important to understand that no cash flows from the valuation adjustments. In the Annual Report, this is presented as "Unrealized movement in fair value of investments".

Sales components summarized according to Annual Report 2021 (2020) [3]:

-Dividends received: 226,328 (123,748)

-Unrealised movement in fair value of investments: 155,551 (9,763)

-Interest on shareholder loan investment received: 39,804 (20,793)

Thus, if the investment activities as well as the valuations of the investments increase, the revenue increases. The valuations are carried out classically using the DCF method. Therefore, valuations could well fall if the electricity price falls or the wind blows less.

𝗜𝗜. 𝗞𝗲𝗻𝗻𝘇𝗮𝗵𝗹𝗲𝗻 [𝟰]*:

-KGV 2021: 7.68

-KGV 2022e: 2.87

-KGV 2023e: 6.48

-KGV 2024e: 7.28

-PEG 2022e (P/E/growth rate): = I do not permit myself to pass judgment here. EBIT growth is extremely volatile due to the current situation and electricity price development. A reasonable statement cannot really be made here. For classification: A favorable PEG ratio would be achieved with growth of 8-10% (rule of thumb: < 1 = very favorable).

-KBV 2022: 1.15

-Sales growth: 2022: 312%; 2023: -46%; 2024: -8%

-EBIT growth: 2022: 325%; 2023: -49%; 2024: -8%

-Dividend yield: 2021: 5.11%; 2022: 5.45; 2023e: 5.87%; 2024e: 6.09%

*As of 10/16-22

Sector Key Figures Europe [5]:

-Investment & Asset Management Companies P/E : 11.72

-Growth Investment & Asset Management companies : 14.02%

-PEG Investment & Asset Management Companies: 0.84

But is UKW now favorably valued? One could almost think so. But in order to make a final judgment, we need to take a closer look at the business model and the financials, based on the next section.

𝗜𝗜𝗜. 𝗥𝘂𝗯𝗿𝗶𝗸 - 𝗪𝗮𝘀 𝘄ü𝗿𝗱𝗲 𝗕𝘂𝗳𝗳𝗲𝘁 𝘀𝗮𝗴𝗲𝗻 (𝗗𝗮𝘁𝗲𝗻 𝗮𝘂𝘀 𝗱𝗲𝗺 𝗔𝗻𝗻𝘂𝗮𝗹 𝗥𝗲𝗽𝗼𝗿𝘁 𝟮𝟬𝟮𝟭 [𝟯]):

Criteria to be read in detail:

https://app.getquin.com/activity/XcuRrJwmyP

Due to the very manageable business model, I deviate somewhat from my usual "Buffett Approach". UKW has hardly any operational activities, focuses on investments and divende - Thats it!

A. Income Statement:

For fiscal 2021, we have achieved a net margin of 92%. The EBIT is almost equal to the revenue. However, this is not surprising and therefore not unusual for an investment company. Profit has been rising steadily for 3 years. However, this is mainly due to new acquisitions, which in turn pay dividends: There have also been no significant devaluations of the investments during this period.

Profit 2021: 363.22 million GBP

Profit 2020: GBP 104.40 million

Profit 2019: 43.29 million GBP

Profit 2018: 202.38 million GBP

Profit 2017: 59.87m GBP

B. Balance Sheet:

The balance sheet looks similarly "boring". The asset side consists almost entirely of the investment holdings. The liabilities side has a loan of GBP 950,000, which is repaid annually and represents about 23% of total assets. Depending on demand, the credit line is also increased again.

The business model is simply explained: receive dividends, pay dividends and increase the credit line or perform a capital increase as needed. Nothing else actually happens. The cash flow is fully utilized. If you increase the credit line, it is fully used for investments and dividend payments. It is the same with capital increases. Depending on the need, one of the two (credit vs. capital increase) is used as a source of cash. Since the dividend is based on inflation, we are currently forced to do this to a certain extent.

But does this kind of dividend policy make sense? I would like to take a brief look at the cash flow statement! Because here it becomes even clearer how UKW's strategy looks exactly.

C. Cash Flow Statement:

Cash relavant transactions for UKW summarized:

Annual repayment of loan (-)

Increase in credit facility (+)

Payment of dividends (-)

Receipt of dividends (+)

Cash from capital increases (+)

As mentioned above, not much is happening. As a result, the operating cash flow and also the free cash flow can sometimes be negative. This leaves little strategic room for maneuver, as the company is always trying to cover its dividends and investments through capital and credit increases. But that is simply also the business model.

Capital increases 2020: 400,000 GBP

Capital increases 2021: 450,000 GBP in November 2021 and 197,618 GBP in February 2021

A relevant article re. the 450,00 GBP capital increase:

https://quoteddata.com/2021/11/greencoat-uk-wind-raises-450m-high-demand/

We can see that UKW needs capital increases, which have an impact on the share price (share price dilution). If you look at the share price development of UKW, you can see that there is hardly any share price performance possible. On the other hand, UKW has a good dividend yield.

From 2014 to the peak in 2022, the share price "soared" from the original €1.19 to €1.95. [7] The share is therefore not a particular high performer and should not be expected to be.

Such a dividend strategy is not unusual and neither positive nor negative. However, one should be aware of the yield expectations!

So what would Buffett say? Probably not much. The share does not really have a moat and in all likelihood it will not be able to beat the market. Unless wind turbines are the outperformers in the next few years 😊

𝗜𝗩. 𝗞𝗲𝘆 𝗡𝗼𝘁𝗲

UKW regularly publishes net asset value (NAV) reports that assess the value of assets (wind farms). This provides regular information on business development and asset valuation.

The assets are valued according to the DCF method.

Excerpt from the semi-annual report:

"The DCF valuation is produced by discounting the individual wind farm cash flows on an unlevered basis."

For more information on the valuation of assets and companies, please refer to the following articles:

Little guide of valuation:

https://app.getquin.com/activity/laOUVhfFDI?lang=de&utm_source=sharing

Impairment according to IAS 36:

https://app.getquin.com/activity/vCLDnzrHFv?lang=de&utm_source=sharing

In the NAV reports, the relevant information is compared, such as NAV, market capitalization (shares x price) or target dividend, based on inflation (RPI). So you can already deduce something from the reports, how the business (wind, electricity price), the valuations and the cash requirement for the dividend will develop.

NAV 30.06.2022: 3,559.7 million GBP

NAV 31.03.2022: GBP 3,459.2 million

NAV 31.12.2021: 3,093.7 Mio GBP

NAV 30.09.2021: 2,549.0 Mio GBP

Market capitalization 30.06.2021: 3,566.8 Mio GBP

Market capitalization 31.03.2022: 3,531.6 Mio GBP

Market capitalization 31.12.2021: 3,257.8 Mio GBP

Market capitalization 30.09.2021: 2,564.7 Mio GBP

In this context, I also refer to the revenue component "Unrealized movement in fair value of investments", which may change accordingly based on the valuations.

In the valuation, UKW benefited primarily from electricity prices and further acquisitions. From 2020 to 2021, the NAV valuation increased mainly due to investments (GBP 569 million) and valuation adjustments (GBP 116 million) [3].

Likewise, the June 2022 NAV Report shows that GBP 400 million cash via a capital increase was necessary to acquire 12.1% of the "Hornsea 1" wind farm. Therefore, in the long term, this acquisition should recoup the GBP 400 million.

𝗩. 𝗣𝗲𝗲𝗿 𝗚𝗿𝗼𝘂𝗽/𝗞𝗼𝗻𝗸𝘂𝗿𝗿𝗲𝗻𝘇 [𝟯]:

Since FM is not a classic green energy stock, the peer group is also completely different. In summary and for your own analysis, a small list of relevant investment companies:

-Foresight Solar Fund $FSFL

-Bluefield Solar Income Fund $BSIF

-John Laing Environmental Assets Group $JLEN

-The Renewables Infrastructure Group $TRIG

-Next Energy Solar Fund $NESF

𝗩𝗜. 𝗥𝗶𝘀𝗶𝗸𝗲𝗻/𝗡𝗮𝗰𝗵𝘁𝗲𝗶𝗹𝗲:

-Exclusive dependence on wind farm development and electricity price.

-Valuation risks in the wake of electricity price changes.

-Dividend linked to retail price index (RPI) inflation. Provides for attractive dividend, but also for borrowing and capital increases (share of FC, however, low). Startegic scope thus limited.

-Limited investments outside UK possible through Greencoat Renewables PLC, which limits growth opportunities.

𝗩𝗜𝗜. 𝗩𝗼𝗿𝘁𝗲𝗶𝗹𝗲:

-No operational risks from operations, maintenance and thus hardly any operational costs.

-Because of focus UK no currency risks.

-Stable environment/weather conditions for wind turbines in UK.

𝗩𝗜𝗜𝗜. 𝗙𝗮𝘇𝗶𝘁:

FM is doing what, in terms of climate change, is a respectable business. However, those looking for high returns will not be happy here. UKW is intent on using its cash flow each year for investments and dividends. If further cash is needed, a capital increase is carried out, which dilutes the share price. The business model is simple and involves low operational risks. However, one should not expect high returns. In addition, the business is not very diversified.

I also see a disadvantage in the strategic orientation and the growth potential. Due to other investment trusts, such as Greencoat Renewables PLC, which is run by the same management, it is unlikely that they will invest in France, Sweden or Ireland, so that they do not get in each other's way. At the very least, there is a certain barrier here.

Greencoat Renewables PLC $GRP is somewhat more diversified due to its European business and also holds growth prospects in the PV market. Its market cap and NAV are still somewhat smaller than UKW's, in part because of its lower sales and profits. However, I have not done a major analysis for this investment company. For all UKW fans, however, this company could also be interesting 🌝

However, those who want a regular dividend with an unexciting share price development, as a supplement in the portfolio, could be right with UKW. Because the dividend will remain high and the investments serve climate change.

As always, no investment advice!

#theaccountant

#aktienanalyse

#ukw

#windkraft

#stocks

#greenenergy

#dividende

Sources:

[1] https://de.marketscreener.com/kurs/aktie/GREENCOAT-UK-WIND-PLC-12888956/unternehmen/

[2]

https://www.greencoat-ukwind.com/about-us/who-we-are

[3]

https://www.greencoat-ukwind.com/~/media/Files/G/GreenCoat-UKWind/documents/Results/FY21/2021%20Greencoat%20Annual%20Report%20FINAL.pdf

[4]

https://de.marketscreener.com/kurs/aktie/GREENCOAT-UK-WIND-PLC-12888956/fundamentals/

[5]

https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datacurrent.html

[6]

https://www.greencoat-ukwind.com/~/media/Files/G/GreenCoat-UKWind/documents/Results/nav-factsheet-jun-2022.pdf

[7]

https://www.boerse.de/aktien/GREENCOAT-UK-WIND-Aktie/GB00B8SC6K54

Graphic:

Portfolio Map:

https://www.greencoat-ukwind.com/portfolio

Wind turbines: -direct from Annual

Report 2021-->

https://www.greencoat-ukwind.com/~/media/Files/G/GreenCoat-UKWind/documents/Results/FY21/2021%20Greencoat%20Annual%20Report%20FINAL.pdf

Company homepage:

https://www.greencoat-ukwind.com/disclaimer-country

Greencoat Renewables PLC:

https://www.greencoat-renewables.com/disclaimer-country

🚨 Which topic do you want to read next? Every vote helps to find a topic. In the future I would like to be a bit more active here again! :)

PLEASE VOTE FOR THE NEXT 2️⃣ TOPICS. Result will come the days

🍷 - Investing in German wine: not to cry? An analysis of a renowned wine merchant

🎰 - The problem with Vici Properties

🥤- Coca Cola disappoints with the share price. My assessment of the dividend king

📸 - My journey as a niche youtuber & what the pros and cons of Getquin, Instagram & Youtube are for channels below the 5,000 subscriber mark.

❗ - Haters are my most loyal fans. A different perspective on hate on the net against me Bass-T.

🏬 - Complex investing in hotels to maximize profits. A topic that hardly anyone talks about. Rightly so?

❌ - Why "No investment advice"?

Thank you all

Your BASS-T

No investment advice

#aktien
#dividende
#feedback

Since it hit me again today and I had again countless postings on my clearing accounts ( 96😂)

It is in the year 2022

And you are happy about your investment in one or more Reit(s). Dividends are diligently trickling into your clearing account every month. You are the king of dividends.

A few months later. Shock STORNO on the clearing account. All dividends gone! What happened? The clearing account in the minus -&gt; panic? No.

Why are dividends cancelled?

The negative dividend posting is related to the so-called reclassification. In simple terms, a recalculation of the dividend takes place because it is not announced until the beginning of the following fiscal year how the dividends paid are divided for tax purposes. (Since this information is not available until the following year, the recalculation or reclassification does not take place until then.

So the company has to reallocate the money from dividends and capital returns, so to speak, after the close of the fiscal year. (For Canadian and US companies, this usually takes place annually).

The correction of the dividends is done as a "delta correction" and has no influence on the annual tax certificate of the previous year. Although dividends from the previous year may be affected by the measure. This may result in a tax disadvantage depending on the use of the personal allowance.

When will the corrected dividends be credited?

Normally, a few days after the cancellation, the dividend is paid again in a recalculated amount. This can result in several postings, as each payment made is corrected individually. In the example with me today within a few hours.

Where can I find information on tax recalculation?

On the websites of the companies you can usually find information about the recalculation in the Investor Relations section or under Dividends. Just have a look at the IR page of the riding of your choice.

Dividend cancellation and tax allowance

Regarding the personal tax allowance, there may be disadvantages. For example, if the tax-free allowance was used in the previous year, but has already been used up in the following year, the regular taxes will apply. (The tax-free amount used in the previous year could therefore be reduced retroactively).

Depending on the constellation, it is therefore possible that this chargeback means that part of the tax allowance was not used retroactively in the previous year and the tax allowance for the current year is used up, even though the payment was actually made in the previous year. What does @DerSteuerberater about this?

Do I have to take action?

As a rule, you do not need to take any further action. The broker takes care that everything is tax compliant.

PS thanks to Lisa

Source:

https://aktiengram.de/stornierte-dividenden-bei-reits/?fbclid=PAAabFruoFpHv2X6NzyEaFM73ObF0ZyT4w08Z7OBoRfR9_JFUGxRQLbUW4C8I

You don't have to know everything but only where it is written.

Have a nice weekend ✅

#dividende
#reit
$GOOD
$O
$MPW

+++3 million at 28 years+++

Hello stockbrokers,

I stand for transparency and for this reason, I show you today my 10 year plan that I wrote a year ago to be private at 28.

Financial goals:

2022 - 10.000€

2023 - 20.000€

2024 - 30.000€

2025 - 50.000€

2026 - 100.000€

2027 - 200.000€

2028 - 300.000€

2029 - 500.000€

2030 - 1.000.000€

2031 - 2.000.000€

2032 - 3.000.000€

+These are assets & liabilities that do not need to be reached (motivation).

-Rolex Day-Date Platinum & Rolex GMT Master.

-A Lindt - share incl. dividend in kind (chocolate case).

-Muscle Car resp. Tesla or Nio

Information regarding my financial goals:

I am aware that my goals are very ambitious and that most of the population will never reach them.

But, I am also extremely disciplined, currently I am about to graduate from high school and have school every day until 16:00. On top of that I work four hours a day. On weekends there are days when I work 12h to achieve my goals.

The wealth goals are coupled with my entrepreneurial success and return on capital market.

Do you have financial goals? and what do they look like?

Cheers

#aktie
#vermögen
#dividende
#finanzen
#geld

Best trading day in my shareholder history!

Hello stock market players,

today was an insane trading day and I generated a performance of 5.01% thanks to the tendency of lower inflation in relation to expectations.

How was your performance write it in the comments and feel free to respond with an emoji!

🦍 = 0-1%

😂 = 1-2%

🆘 = 2-3%

🚀 = 3-4%

❤️ = Ü4%

#aktien
#aktie
#geld
#investieren
#finanzen
#dividende