New to investing [Greece]

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jokerr
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Joined: Fri Feb 08, 2019 6:06 am

New to investing [Greece]

Post by jokerr » Fri Feb 08, 2019 7:47 am

Hi to all,

I'm glad I found you!

I am a 23-year-old tax resident in Greece and I have an account in Switzerland by willfare.

I would like your guidance on how to make a low-risk passive long-term investment. Reducing contributions as much as possible to tax authorities and management fees.

Thank you very much :sharebeer

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LadyGeek
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Re: New to investing [Greece]

Post by LadyGeek » Fri Feb 08, 2019 4:38 pm

Welcome! I have added your home country to the topic title.

I don't have the experience to answer your question, but I can suggest for you to read this wiki article: EU investing
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

ICH
Posts: 170
Joined: Wed Jun 13, 2018 3:08 am

Re: New to investing [Greece]

Post by ICH » Sat Feb 09, 2019 2:32 am

jokerr wrote:
Fri Feb 08, 2019 7:47 am
Hi to all,
I'm glad I found you!
I wish I had found this group when I was 23. It would have saved me a lot of money...

jokerr wrote:
Fri Feb 08, 2019 7:47 am
I am a 23-year-old tax resident in Greece and I have an account in Switzerland by willfare.
I 've not been a Greece tax resident for some time now, but I think I can help.
What is "an account in Switzerland by willfare"? Is this a bank or something?

jokerr wrote:
Fri Feb 08, 2019 7:47 am
I would like your guidance on how to make a low-risk passive long-term investment. Reducing contributions as much as possible to tax authorities and management fees.
1. I will suggest first to have a look at these guys: https://www.ourwallet.gr/pos-forologountai-ependyseis/ . They seem to be the closest thing to a Greece bogleheads chapter. You will see that taxation is not a major issue for UCITS funds. After that have a look at the wiki and particularly here: https://www.bogleheads.org/wiki/EU_investing

2. Arrange an account with one of the low cost, online, international brokers. In your case, that would be either Degiro or Interactive Brokers. Degiro will be cheaper. Whichever you select: do not use a Greek bank or any Greek broker (ΑΕΠΕΥ) - it's a waste of money and unreliable.

3. Establish an asset allocation. How much in bonds - how much in stocks. At 23 y.o. it is reasonable to go for something like 20%-80%. More info in the wiki.

4. Select the ETFs you want to buy. You have to go for ETFs insteaf of Mutual Funds; unfortunately access to index MFs is expensive, if at all possible.
The wiki has some portfolio suggestions, the forum threads have plenty more, I suggest as follows:
- Buy the Vanguard FTSE All-World UCITS ETF for your stock portion. Buy it in euros, either in Euronext Amsterdam (ticker: VWRL) or XETRA (ticker: VGWL)
- Continue buying only this, until you reach to a substantial amount in the account that it makes sense to add the bond ETF.
- Buy the iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) for your bond portion. Again, buy it in euros, either in London (ticker: AGGH) or XETRA (ticker: EUNA) or Six-swiss (ticker: AGGH)

5. Continue doing that, and that only. Say no to all the marvellous investment opportunities that will come along in your life offering above average returns - most are simply scams and it is not easy to distinguish the ones that are not. Example: now in Greece, people are selling the real estate concept again for high returns with low risk -> that's a scam.

6. I assume you are aware about the capital controls. There is no way out of it so you have to comply. I trust the limit of money you can trasfer out of the country is high enough for a 23-y.o. person not to be affected by it.

Topic Author
jokerr
Posts: 4
Joined: Fri Feb 08, 2019 6:06 am

Re: New to investing [Greece]

Post by jokerr » Mon Feb 11, 2019 6:54 am

Dear ICH,

Thank you so much for your help and guidance! I already feel that some things are clearer than before after your reply.

I 've not been a Greece tax resident for some time now, but I think I can help.
What is "an account in Switzerland by willfare"? Is this a bank or something?
The money are in a Swiss bank and as you understand the fees are very high (custody etc). I am considering transfering them somewhere else. Do you have any suggestion?


1. I will suggest first to have a look at these guys: https://www.ourwallet.gr/pos-forologountai-ependyseis/ . They seem to be the closest thing to a Greece bogleheads chapter. You will see that taxation is not a major issue for UCITS funds. After that have a look at the wiki and particularly here: https://www.bogleheads.org/wiki/EU_investing
Very usefull article. So as far i Understand if i buy a UCITIS etf (example S&P500) today at 100.000 and sell it after 10 years at 160.000 i will not have to pay anything in taxes?

2. Arrange an account with one of the low cost, online, international brokers. In your case, that would be either Degiro or Interactive Brokers. Degiro will be cheaper. Whichever you select: do not use a Greek bank or any Greek broker (ΑΕΠΕΥ) - it's a waste of money and unreliable.
I am in the process of opening an IB account, but it seems to me that the platform is quite complicated. Would you suggest that I work with someone special to guide me in setting up my account and to avoid any "childish mistakes"?

Also as far as i read the best practice is to Invest directly to Vanguard but this is applicable only to US and UK residents. If i transfer the money in a UK bank is there any way to overcome that issue and invest directly with VN?


3. Establish an asset allocation. How much in bonds - how much in stocks. At 23 y.o. it is reasonable to go for something like 20%-80%. More info in the wiki.

20% Stocks and 80% Bonds? Could you kindly argue why do you believe that i must have such an allocation?


4. Select the ETFs you want to buy. You have to go for ETFs insteaf of Mutual Funds; unfortunately access to index MFs is expensive, if at all possible.
The wiki has some portfolio suggestions, the forum threads have plenty more, I suggest as follows:
- Buy the Vanguard FTSE All-World UCITS ETF for your stock portion. Buy it in euros, either in Euronext Amsterdam (ticker: VWRL) or XETRA (ticker: VGWL)
- Continue buying only this, until you reach to a substantial amount in the account that it makes sense to add the bond ETF.
- Buy the iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) for your bond portion. Again, buy it in euros, either in London (ticker: AGGH) or XETRA (ticker: EUNA) or Six-swiss (ticker: AGGH)

Do you believe is safer to buy in Euro's than in Dollars? Also in the forum i see that almost everybody is suggesting the Vanguard SP500 etf. Do you reccomend? Is it possible to buy it through a UCITIS etf?

5. Continue doing that, and that only. Say no to all the marvellous investment opportunities that will come along in your life offering above average returns - most are simply scams and it is not easy to distinguish the ones that are not. Example: now in Greece, people are selling the real estate concept again for high returns with low risk -> that's a scam.
I couldn't agree more. Everybody is buying small houses in Athens the last year. I believe it is a "bubble"

6. I assume you are aware about the capital controls. There is no way out of it so you have to comply. I trust the limit of money you can trasfer out of the country is high enough for a 23-y.o. person not to be affected by it.

Yes i am aware regarding the limitations but this is not an issue for me. I do not have savings in Greece and my salary almost cover's my monthly expenses. So i will have to invest from the money that they are already in Switzerland.


Thanks again for your help :sharebeer

DJN
Posts: 211
Joined: Mon Nov 20, 2017 12:30 am

Re: New to investing [Greece]

Post by DJN » Mon Feb 11, 2019 7:29 am

Hi,
I think that ICH gave you good advice. I would follow that.
KISS - keep it simple and just invest in AGGH + IWDA + EIMI + WSML or an equivalent distributing folio. After you have checked your tax position with regards to dividend and capital gains taxation in your domicile.
In respect to Switzerland and Swiss banks and other business practices, my real experience there is that I would avoid it at all costs. Costs being the operative word, its a very expensive place to do business and banks will charge fees, (e.g. Swiss banks have to charge non residents a fee for keeping your money in their bank, my last charge was over CHF750 for an account with zero balance! Figure that one out). One other aspect of Switzerland is their paranoia about US tax and they are constantly looking for confirmation of the sources of your money.
i would transfer your money for investment purposes to IB or Internaxx or deGiro or Saxo. I have found them all ok. I don't think that you said how much money you had, if it's not too much then the investment platforms are fine.
good luck.
DJN

ICH
Posts: 170
Joined: Wed Jun 13, 2018 3:08 am

Re: New to investing [Greece]

Post by ICH » Mon Feb 11, 2019 8:46 am

I 've not been a Greece tax resident for some time now, but I think I can help.
What is "an account in Switzerland by willfare"? Is this a bank or something?
The money are in a Swiss bank and as you understand the fees are very high (custody etc). I am considering transfering them somewhere else. Do you have any suggestion?
Depends why you have it there in the first place. If it is cash as an emergency fund, it is not a bad place, although fees are crazy. Depends on the amount also. I have bank accounts in several countries; I would never keep an account in a country that charges custody fees.
1. I will suggest first to have a look at these guys: https://www.ourwallet.gr/pos-forologountai-ependyseis/ . They seem to be the closest thing to a Greece bogleheads chapter. You will see that taxation is not a major issue for UCITS funds. After that have a look at the wiki and particularly here: https://www.bogleheads.org/wiki/EU_investing
Very usefull article. So as far i Understand if i buy a UCITIS etf (example S&P500) today at 100.000 and sell it after 10 years at 160.000 i will not have to pay anything in taxes?
You would pay the contribution above a certain amount (εισφορα αλλυλεγγυης). This is assuming that the tax law remains the same - as we both know, tax law in Greece changes twice per year :oops:
2. Arrange an account with one of the low cost, online, international brokers. In your case, that would be either Degiro or Interactive Brokers. Degiro will be cheaper. Whichever you select: do not use a Greek bank or any Greek broker (ΑΕΠΕΥ) - it's a waste of money and unreliable.
I am in the process of opening an IB account, but it seems to me that the platform is quite complicated. Would you suggest that I work with someone special to guide me in setting up my account and to avoid any "childish mistakes"?

Also as far as i read the best practice is to Invest directly to Vanguard but this is applicable only to US and UK residents. If i transfer the money in a UK bank is there any way to overcome that issue and invest directly with VN?
The IB platform is complicated but you get used to it. Assuming you go the bogleheads way, it does not matter. You will not be using it every day anyway.
If you need help -> ask here.
If you are really uncomfortable with it and need help / support, I suggest using Mark Zoril from Plan Vision for the first year (96USD per year fixed fee). I have not used him but plenty of people I know have and all are happy with the support / price.

Going to Vanguard directly will not work. You have to be a resident there.

3. Establish an asset allocation. How much in bonds - how much in stocks. At 23 y.o. it is reasonable to go for something like 20%-80%. More info in the wiki.

20% Stocks and 80% Bonds? Could you kindly argue why do you believe that i must have such an allocation?
20% bonds and 80% stocks.
You don't have to have this allocation. It simply follows the "your age in bonds" mandra.

4. Select the ETFs you want to buy. You have to go for ETFs insteaf of Mutual Funds; unfortunately access to index MFs is expensive, if at all possible.
The wiki has some portfolio suggestions, the forum threads have plenty more, I suggest as follows:
- Buy the Vanguard FTSE All-World UCITS ETF for your stock portion. Buy it in euros, either in Euronext Amsterdam (ticker: VWRL) or XETRA (ticker: VGWL)
- Continue buying only this, until you reach to a substantial amount in the account that it makes sense to add the bond ETF.
- Buy the iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) for your bond portion. Again, buy it in euros, either in London (ticker: AGGH) or XETRA (ticker: EUNA) or Six-swiss (ticker: AGGH)

Do you believe is safer to buy in Euro's than in Dollars? Also in the forum i see that almost everybody is suggesting the Vanguard SP500 etf. Do you reccomend? Is it possible to buy it through a UCITIS etf?
It is possible to go for an SP500 etf. I do not recommend it. You see it being recommended for many reasons; mainly because this is a US forum. Go global. If you prefer a fully accummulating portfolio, see the proposal from DJN. You can search for ETFs here: https://www.justetf.com/de-en/
If you have and use euros only, buy in euros.
5. Continue doing that, and that only. Say no to all the marvellous investment opportunities that will come along in your life offering above average returns - most are simply scams and it is not easy to distinguish the ones that are not. Example: now in Greece, people are selling the real estate concept again for high returns with low risk -> that's a scam.
I couldn't agree more. Everybody is buying small houses in Athens the last year. I believe it is a "bubble"
A couple of years ago, they were sending their money to Montenegro and Ukraine to get some extra interest and protect against the failure of Greek banks -> most of them lost their money when the banks in Montenegro failed...

6. I assume you are aware about the capital controls. There is no way out of it so you have to comply. I trust the limit of money you can trasfer out of the country is high enough for a 23-y.o. person not to be affected by it.

Yes i am aware regarding the limitations but this is not an issue for me. I do not have savings in Greece and my salary almost cover's my monthly expenses. So i will have to invest from the money that they are already in Switzerland.
You need to see this Switzerland story as part of an overall strategy. If you move all the money to IB and close the Swiss account, you will lose the easy, immediate access to cash. And from what you're saying, you will also not have any cash available in home country. There is something wrong in this reasoning if I understand correctly. Always have cash available to cover at least 3-6 months of expenses. Whether the cash is in a Greek bank, under the mattress or Switzerland, is for you to decide...

ICH
Posts: 170
Joined: Wed Jun 13, 2018 3:08 am

Re: New to investing [Greece]

Post by ICH » Mon Feb 11, 2019 8:49 am

DJN wrote:
Mon Feb 11, 2019 7:29 am
my last charge was over CHF750 for an account with zero balance!
:shock: :shock: :shock:

Topic Author
jokerr
Posts: 4
Joined: Fri Feb 08, 2019 6:06 am

Re: New to investing [Greece]

Post by jokerr » Mon Feb 11, 2019 3:34 pm

Guys thank you once again for the great tips!

Topic Author
jokerr
Posts: 4
Joined: Fri Feb 08, 2019 6:06 am

Re: New to investing [Greece]

Post by jokerr » Mon Feb 11, 2019 3:35 pm

ICH wrote:
Mon Feb 11, 2019 8:46 am
I 've not been a Greece tax resident for some time now, but I think I can help.
What is "an account in Switzerland by willfare"? Is this a bank or something?
The money are in a Swiss bank and as you understand the fees are very high (custody etc). I am considering transfering them somewhere else. Do you have any suggestion?
Depends why you have it there in the first place. If it is cash as an emergency fund, it is not a bad place, although fees are crazy. Depends on the amount also. I have bank accounts in several countries; I would never keep an account in a country that charges custody fees.
1. I will suggest first to have a look at these guys: https://www.ourwallet.gr/pos-forologountai-ependyseis/ . They seem to be the closest thing to a Greece bogleheads chapter. You will see that taxation is not a major issue for UCITS funds. After that have a look at the wiki and particularly here: https://www.bogleheads.org/wiki/EU_investing
Very usefull article. So as far i Understand if i buy a UCITIS etf (example S&P500) today at 100.000 and sell it after 10 years at 160.000 i will not have to pay anything in taxes?
You would pay the contribution above a certain amount (εισφορα αλλυλεγγυης). This is assuming that the tax law remains the same - as we both know, tax law in Greece changes twice per year :oops:
2. Arrange an account with one of the low cost, online, international brokers. In your case, that would be either Degiro or Interactive Brokers. Degiro will be cheaper. Whichever you select: do not use a Greek bank or any Greek broker (ΑΕΠΕΥ) - it's a waste of money and unreliable.
I am in the process of opening an IB account, but it seems to me that the platform is quite complicated. Would you suggest that I work with someone special to guide me in setting up my account and to avoid any "childish mistakes"?

Also as far as i read the best practice is to Invest directly to Vanguard but this is applicable only to US and UK residents. If i transfer the money in a UK bank is there any way to overcome that issue and invest directly with VN?
The IB platform is complicated but you get used to it. Assuming you go the bogleheads way, it does not matter. You will not be using it every day anyway.
If you need help -> ask here.
If you are really uncomfortable with it and need help / support, I suggest using Mark Zoril from Plan Vision for the first year (96USD per year fixed fee). I have not used him but plenty of people I know have and all are happy with the support / price.

Going to Vanguard directly will not work. You have to be a resident there.

3. Establish an asset allocation. How much in bonds - how much in stocks. At 23 y.o. it is reasonable to go for something like 20%-80%. More info in the wiki.

20% Stocks and 80% Bonds? Could you kindly argue why do you believe that i must have such an allocation?
20% bonds and 80% stocks.
You don't have to have this allocation. It simply follows the "your age in bonds" mandra.

4. Select the ETFs you want to buy. You have to go for ETFs insteaf of Mutual Funds; unfortunately access to index MFs is expensive, if at all possible.
The wiki has some portfolio suggestions, the forum threads have plenty more, I suggest as follows:
- Buy the Vanguard FTSE All-World UCITS ETF for your stock portion. Buy it in euros, either in Euronext Amsterdam (ticker: VWRL) or XETRA (ticker: VGWL)
- Continue buying only this, until you reach to a substantial amount in the account that it makes sense to add the bond ETF.
- Buy the iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) for your bond portion. Again, buy it in euros, either in London (ticker: AGGH) or XETRA (ticker: EUNA) or Six-swiss (ticker: AGGH)

Do you believe is safer to buy in Euro's than in Dollars? Also in the forum i see that almost everybody is suggesting the Vanguard SP500 etf. Do you reccomend? Is it possible to buy it through a UCITIS etf?
It is possible to go for an SP500 etf. I do not recommend it. You see it being recommended for many reasons; mainly because this is a US forum. Go global. If you prefer a fully accummulating portfolio, see the proposal from DJN. You can search for ETFs here: https://www.justetf.com/de-en/
If you have and use euros only, buy in euros.
5. Continue doing that, and that only. Say no to all the marvellous investment opportunities that will come along in your life offering above average returns - most are simply scams and it is not easy to distinguish the ones that are not. Example: now in Greece, people are selling the real estate concept again for high returns with low risk -> that's a scam.
I couldn't agree more. Everybody is buying small houses in Athens the last year. I believe it is a "bubble"
A couple of years ago, they were sending their money to Montenegro and Ukraine to get some extra interest and protect against the failure of Greek banks -> most of them lost their money when the banks in Montenegro failed...

6. I assume you are aware about the capital controls. There is no way out of it so you have to comply. I trust the limit of money you can trasfer out of the country is high enough for a 23-y.o. person not to be affected by it.

Yes i am aware regarding the limitations but this is not an issue for me. I do not have savings in Greece and my salary almost cover's my monthly expenses. So i will have to invest from the money that they are already in Switzerland.
You need to see this Switzerland story as part of an overall strategy. If you move all the money to IB and close the Swiss account, you will lose the easy, immediate access to cash. And from what you're saying, you will also not have any cash available in home country. There is something wrong in this reasoning if I understand correctly. Always have cash available to cover at least 3-6 months of expenses. Whether the cash is in a Greek bank, under the mattress or Switzerland, is for you to decide...
ICH i have sent you a PM! ;)

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