Unsure about funding, assist required. : eupersonalfinance

by akoloy


I’m a non-EU citizen and a French resident. I’ve been contemplating investing a bit surplus cash into ETFs by Vanguard, out there totally free on Degiro. After studying by means of the previous posts on this sub, I created a custody account for myself on Degiro. However, I’ve been a bit greater than puzzled about how the dividend system and the related prices work in ETFs like VWRL and VUSA.

After a little bit of analysis, I zeroed down my choices to Vanguard FTSE All-World (IE00B3RBWM25) & Vanguard S&P 500 (IE00B3XXRP09) since they’re on Degiro’s checklist of free ETFs. However, since they’re distributing ETFs, I spotted that if I make investments 100 Euros monthly for a yr, Degiro would cost me 1 Euro + 3% (max as much as 10%) per dividend distribution of a negligible quantity of quarterly dividend (~0.2-0.3 euros based mostly on earlier yr’s dividend outcomes from justetf.com). In flip, I’d must pay Degiro for this dividend distribution in addition to report this within the revenue tax returns subsequent yr. So far this has been my understanding of the way it works.

Given that in France, the tax on dividends is already at a price of 30%, I might in truth be paying out of my pocket for the funding, each to Degiro in addition to the taxes on dividends. Though this quantity shall be negligible within the quick run, this someway appears counterproductive to investing in the long term (apart from the truth that I can maintain onto the ETFs so long as I’m in Europe the place Degiro serves and reap the advantages of any capital achieve in the long run if the state of affairs even arises).

Could anybody please clarify if my understanding of that is right or if I’m lacking one thing? Would it even make sense to go forward with the funding or if I ought to as a substitute join the fundamental account as a substitute, which I felt barely riskier? Is there an alternate technique that I may probably use?

Thanks



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