My story and request(s) for information will probably sound very similar to others in the forum, however after trying to find posts from people in a similar situation as me, I thought it would be best if I created a new post to gather all important (to me) questions.
I have been slowly trying to educate myself financially since last Summer and my plan is to start investing early next year. Some details about my situation:
Country: EU citizen residing in Germany
Emergency funds: 12 months of expenses
Tax filing status: married, filing jointly
I currently have 70k sitting in my savings account essentially doing nothing. Starting out, my idea is to invest 6k every year, either 500E monthly or in a single yearly transaction. The problem is that living in Germany and investing from here makes certain things complicated (also not speaking the language doesn't help either).
- Broker: I am aware of the main differences of independent brokers vs banks, the most important one being the fact that banks do all the complicated taxation stuff for you, however I'd definitely appreciate specific recommendations or pros/cons of specific brokers. I currently have a bank account with DKB, which also offers a Depot account for investments. Is someone using DKB for ETFs? How does it compare with ING-DiBa/Comdirect/etc?
- Banks in Germany have offers on specific ETFs if they are part of a "Sparplan", which essentially means that an amount needs to be invested monthly. Is this approach more preferable compared to doing a single or 2 transactions every year? What about broker fees and taxation?
- Accumulating vs Distributing ETFs: I am aware that taxation changed in 2018, however it is not entirely clear to me which ETF type is preferable now for long term investments. A concrete example would be great!
- Synthetic vs Physical ETFs: a lot of the ETFs that are being offered are synthetic. What is the general opinion on these compared to physical ETFs?
- I plan to start with a simple portfolio consisting of MSCI World and Emerging Markets. I still have not decided about the low risk asset of my portfolio, i.e. bonds. What is your opinion on including a government bond ETF in the mix?