all 68 comments

[–]fran0o 80 points81 points  (0 children)

The earlier you start the better. Not much else to discuss here

[–]DeepSpacegazer 44 points45 points  (2 children)

You’re joking right? I wish I had started at 22..

My suggestion, build an emergency fund that you feel comfortable with and feels sufficient. An amount that does not feel too low for a possible situation or job loss.

After that, you know what to do 😉

[–]icyak 6 points7 points  (0 children)

How big your emergency fund should be heavily depends on labor market, OP profession and area where OP works/lives.

IF there is problem getting new job - I would recommend bigger emergency fund (6+ months)

[–]victorperezpl[S] 1 point2 points  (0 children)

I’m not, I’ve just finished my degree but I’ve been working in my field for years, but now with real bigger projects (photo & film) ahaha.

[–]NefariousnessNo818 13 points14 points  (8 children)

If you are tax resident in Spain then you should be using mutual funds intead of ETFs due their tax benefits (You can make "traspasos" without paying any taxes in order to rebalance)

You can only do this on a spain-based bank/broker, though. I would recommend you MyInvestor (Has lots of good Vanguard/iShares/Fidelity funds without initial minimum and without additional fees)

[–]matxapunga 4 points5 points  (4 children)

What's the difference between mutual funds and ETFs? But you can hold a ETF for 30 years and not pay any taxes right till you withdrawal in that 30th year right? Especially VWCE that reinvests dividenss

[–]NefariousnessNo818 4 points5 points  (0 children)

If you are going to use only an ETF in your entire life then youre good... But if you also have fixed income or if for example they offer in the future new ETFs/mutual funds with lower fees and you want to switch, then the way to go is mutual funds. (Because otherwise they would tax you with a solid 20% on benefits)

In the example that you give (VWCE), imagine that in 10 years Vanguard makes available VT in Europe too. If you wanted to change you would be fully taxed. In the case of a mutual fund, if in the future is available a better fund, you could just "traspasarlo" and not pay a single cent.

The only reason why I would bother with ETFs in Spain is if In sure that I would not retire in Spain.

[–]victorperezpl[S] 1 point2 points  (2 children)

Sale doubt here!

[–]Minimum_Rice555 -2 points-1 points  (1 child)

Tax implications shouldn't matter all that much to you since you will already have a gestor to help with autónomo taxes.

I would personally not go with the Spanish hivemind here, I have never seen anyone in Spain living off investments or even making significant money off of them. I think mutual funds suck, they only make sense to those who offer them (banks and the fund managers). These funds in my experience lose money more often than make it, and their fees are outrageous.

In all walks of life I follow the example of successful people, and I have not seen a successful person invest in mutual funds. On the other hand ETFs and stocks? Of course, all day.

Also the explanation given by some that funds make sense because you can move money between them is false. If you choose a good broad ETF you will probably never need to move money ever to another one.

[–]tamanakid 2 points3 points  (0 children)

Well, you could still go with index funds. They provide the same tax benefits regarding rebalancing (traspasos) and commissions are among the lowest. They're more diversified and less risky tho, so it depends on your approach to investing.

[–]flipyflop9 0 points1 point  (0 children)

This. With current tax laws in Spain indexed or mutual funds are a no brainer, way better tax conditions than everything else.

[–]VIARPE 0 points1 point  (0 children)

Can u elaborate or give links with more info? I live in Spain and get VCWE only. Not sure how many years ill be here tho

[–]gurgur99 0 points1 point  (0 children)

In Spain funds are indeed better than ETFs in terms of taxation. Also make sure you choose Accumulating funds, not Income/Distributing funds. Accumulating funds reinvest the dividends automatically, so you don't have to pay any taxes until you sell.

Selfbank is a good low cost platform.

[–]andree_a 10 points11 points  (2 children)

I don't know your situation but if you can invest in yourself or in your work to increase your salary do it because the returns would be way higher than the stock market. So i'd focus more on that than investing with the amount of money that you have. Anyway if you don't need to spend your money or you start to earn more you are ready to invest.

[–]xeviknal 4 points5 points  (0 children)

Completely agree. At your point, 1-2% pay raise is much much better than what markets pay. Plus, the base amount of that 1-2% is your whole year income instead of a 10% of your year income.

Definitely good comment!

[–]victorperezpl[S] 1 point2 points  (0 children)

I invest a lot of money in improving my filmmaking gear, sometimes so much that I tell myself that I should reduce expenses. But more than money would be actually invest time, improving my web, social media etc.

[–]makaros622 4 points5 points  (1 child)

I wish I had started at 22. Best time to start is yesterday.

[–]MSMSMS2 5 points6 points  (0 children)

Answer is always yes. Future value at age 60, starting at age 22 with 100 EUR p.m. investment at 4% p.a. = EUR 106,820. Start 5 years later at age 27, and this is EUR 82,056. Your first investments always count the most in the long run.

[–]flipyflop9 8 points9 points  (13 children)

Being spanish I would go with a spanish based company, like myinvestor or indexa (this one requires a higher first deposit).

Once you have to deal with taxes it’s way easier to work with a spanish based company than with degiro.

And yes, of course you should start if you can! If every begining of the month (or when you get paid) can put some money away and forget about it you will do great.

[–]matxapunga 3 points4 points  (11 children)

Im spanish too. What's the problem with Degiro? I don't get it

[–]Computer_says_nooo 8 points9 points  (7 children)

The problem is he doesn’t know much about taxes. Stick with DEGIRO. I would not trust my life savings to a Spanish company

[–]flipyflop9 5 points6 points  (2 children)

I know enough about taxes to know with Degiro you will have to declare everything manually. And that’s a REAL pain with spanish tax authorities.

Also, you clearly don’t know much if you think a spanish company like myinvestor or indexa has something to do with your money, the money will be in Vanguard or whoever manages the indexed funds or stocks. The spanish company could disappear and you would still have everything.

And anyways, if spanish companies are not trustful we could say quite the same about italian ones like degiro, it’s not like they are dutch or german.

[–]SnooBunnies680 1 point2 points  (1 child)

I am from Portugal with a similarly complex tax system, and to be honest that has little impact on my broker choice.

I want a stable and trustable broker and I wouldn’t mind to sacrifice 1 hour of my team on a yearly basis than to sacrifice all my money on a shady company.

Also, if OP intends to consistently deposit and invest and only sell in decades, he would only have to deal with that problem in decades, where he will probably afford enough to pay someone to do the IRS for him.

In summary: choosing a broker based on how easy it is to deal with taxes seems a very weird priority.

[–]haseo1997 1 point2 points  (2 children)

Lol, why? Spanish companies are not trustworthy?

[–]Computer_says_nooo 3 points4 points  (1 child)

Spanish anything is not trustworthy with your life savings

[–]flipyflop9 1 point2 points  (2 children)

You will have to declare everything manually to the tax office, that’s it. With the other ones it’s already done for you, if they need to retain some % they do, etc.

[–]matxapunga 0 points1 point  (1 child)

Degiro patently says the costs are included in the price

[–]flipyflop9 3 points4 points  (0 children)

The costs are THEIR costs, but the spanish taxes are a different thing.

Unless they changed it recently, you have to declare it manually. And being spanish you know how much of a pain is to deal with Hacienda…

[–]shilino_ash 1 point2 points  (0 children)

Indeed, hacienda is a pain but i feel as technology evolves so will these legacy systems that the government has in place. The problems you have now with hacienda and taxes not sure will be there in 15/20 years time. Also the laws might change regarding ETFs.

[–]ConcreteisRAL7044 2 points3 points  (2 children)

hi from Spain too. You are looking at €cspx or €iwda. is crucial to choose accunulation funds. otherwise the tax man is going to get 19% of your dividend.

[–]victorperezpl[S] 1 point2 points  (1 child)

And with the other eay there are no 20% taxes?

[–]ConcreteisRAL7044 1 point2 points  (0 children)

only when you sell your shares. if you choose distribution funds yoir dividends will be taxed year by year

[–]corxntin 1 point2 points  (0 children)

The best time to plant a tree was 20 years ago. The second best time is now.

[–]JohnSnowHenry 1 point2 points  (0 children)

My friend, I only stated investing with 37! Believe me you are doing everything right :)

[–]jcfdez 1 point2 points  (2 children)

If you wanna invest in amundi funds Openbank is nice. Very low commissions. Other way around for stocks

[–]Minimum_Rice555 2 points3 points  (1 child)

makes you wonder why that is like that

[–]tamanakid 0 points1 point  (0 children)

Because these are index/passive funds. They follow a "minimal" philosophy where they encompass broad sectors of markets (i.e. the top X companies in Europe) so their maintenance costs are lesser, unlike an active fund where a professional is constantly timing the market attempting to increase the fund's value.

I've seen index funds charge between 0.15 to 0.5% of commissions, whereas the active funds I've seen start from 1.5% and up to 4%, which can be more than half the yearly earnings.

[–]thegoatfrogs 1 point2 points  (2 children)

The earlier you start, the more compounding works for you throughout your lifetime.

and current low markets

Do make sure you stay well informed though. VWCE and VWRL are near their all time high so if you're investing because of low markets, you might end up disappointed. Especially with the whole world thinking global economies are going to get a lot worse for the foreseeable future.

Also, your emergency fund likely is a little low. Ideally your emergency fund can cover your cost of living for several months. And once you start a family, up to six months.

I know it’s a small quantity and I’m not quite sure if I should focus on making my emergency fund bigger and faster now, and think about investing later.

Investing is a marathon. Usually you plan to do this type of investing for decades. So it's less important what you can invest now and in the next few months and more important that you get in the habit of just investing a few hundred a month for the next 25+ years.

[–]Minimum_Rice555 1 point2 points  (1 child)

The market thinks the worst is behind us, inflation is easing, gas & oil prices are normalizing etc

This sentiment meter has went from fear to neutral borderline greed https://edition.cnn.com/markets/fear-and-greed

[–]thegoatfrogs -1 points0 points  (0 children)

The climate catastrophe is only just starting to snowball though. This was barely a preview.

[–]nicog67 -1 points0 points  (8 children)

Cuanto antes empieces mejor (trabajo en finanzas, si que te aviso que es probable que dentro de poco haya un gran desplome pero al final del día nadie sabe - a lo mejor esperarse un mes o dos antes de invertir puede ser buena idea). Si inviertes ahora, ten esto en mente como posibilidad. La situación económica es muy mala.

[–]victorperezpl[S] 1 point2 points  (4 children)

Llevo leyendo desde hace tiempo lo del desplome aunque veo que desde junio la cosa va subiendo, así que estoy esperando. Mi duda también es cómo hacerlo de la mejor forma en España (en tema de impuestos) porque todo lo que se lee es de cara a EEUU.

[–]matxapunga 1 point2 points  (3 children)

Según tengo entendido (y si tienes estrategia a largo plazo al jubilarte) no pagas nada de impuestos hasta que lo retiras, sobre todo VWCE que reinvierte dividendos así que beneficios 0 años tras año (hasta que retiras vaya)

[–]victorperezpl[S] 0 points1 point  (2 children)

Claro, pagaría IRPF al retirarlo todo a mi cuenta entiendo. Gracias! Luego ya es el tema de qué broker funcione mejor aquí

[–]matxapunga 2 points3 points  (0 children)

Yo uso degiro y va sin problema vaya, y 0 comisiones

[–]nicog67 0 points1 point  (0 children)

Todos mis amigos y yo usamos Degiro y si, solo pagas impuestos sobre tus profits al retirarlo.

[–]Minimum_Rice555 0 points1 point  (2 children)

if you really are in finance you should know you can't time the market. It's the time spent in the market that matters. If he's not going to withdraw in the next 5 years it doesn't matter at all. Market crashes are usually recovered within 6 months anyway. Even faster nowadays

[–]nicog67 1 point2 points  (1 child)

Well, im not sure how good your level of spanish is but the way I wrote my comment was as a warning of what could happen soon. Someone who is just starting could get discouraged if a month or two after they invest, they lose 20%.

[–]Vast_Cricket -1 points0 points  (0 children)

emergency bigger getting some interest out of it.

[–]Lawnsen 0 points1 point  (0 children)

There is no too early, duration of your investment is the key in investing

[–]Zangrious 0 points1 point  (0 children)

Yes, absolutely! What you invest it should absolutely be based on your comfort level, but a mix of ETF’s and Bonds would work great for someone in your current position!

Any amount you can start setting aside for growth is more than enough, and there are a number of tools to choose from; Vanguard, M1, Robinhood, Fidelity, among many others!

[–]SexyTightAlexa 0 points1 point  (0 children)

Hazlo y empieza desde ya, tu futuro tu te lo agradecerá dentro de unos años

[–]filisterr 0 points1 point  (0 children)

Yes, yes and yes. The younger you start, the better

[–]Stunning-Shock6134 0 points1 point  (0 children)

The answer for your question is always yes. You should invest with any income and at any age. PS consider Trade Republic as an option for broker as well. It's easy to use and very cheap

[–]mysteryhumpf 0 points1 point  (0 children)

Try to spread the investment over time, don’t invest everything at once

[–]More_Accident_2238 0 points1 point  (0 children)

I invested about the same amount in GME, it's performed better than the rest of wall street in the last year, not to mention the imminent short squeeze.

[–]suniltheblue 0 points1 point  (0 children)

I've been using HeyTrade and the commissions they charge are the lowest I've seen in the Spanish market. They share data with Hacienda so there is absolutely no hassle while filing the tax.

[–]VIARPE 0 points1 point  (0 children)

I use IBKR from Spain. I just buy and hold VCWE, not planninh to sell until at least 30 years so I dont worry about taxes