Looking for help investing at 25 y/o

[parsonbrown]

I’ve just turned 25, out of university and got my first job that pays 1.85k a month after tax with a lot of great benefits like free travel, lunch & healthcare.

Aside from this i also work freelance and make another 1.9-2k a month. Coming just shy of 4k a month after tax, while my rent is 680€ all-in & i have about 50€ in other costs like gym, netflix, yt premium.

And lastly i pay about 300-400 per month for groceries, going out, etc.

I feel like i could save and invest a good amount. I have 4k~ in crypto (not adding), 2.5k in vwce and am adding 200€ each month to it.

I’ve just started my job so before this my income was about 2k from freelance while studying, now its almost doubling. I also have 5k in savings, which id like to get to 10k as a max.

What would you advise me to do? More in VWCE, other investments, etc? Ideally i would love to generate passive income.

 

[gagirl1961]

@parsonbrown Kudos on being this financially stable at 25. Wish I could say the same at 31

 

[isaiah122]

@gagirl1961 Don't feel bad, I'm just getting to where this guy is at 39.

 

[parsonbrown]

@isaiah122 Good on you! Everyone’s on their own clock & the only way is up this community is really nice

 

[isaiah122]

@parsonbrown Spot on.

 

[savedbygrace559]

@parsonbrown where is that extra 1.9k a month coming from? thats more than my work salary

 

[parsonbrown]

@savedbygrace559 I’ve done freelancing/self employed work since i was in university and was able to secure a long term gig!

 

[parsonbrown]

@gagirl1961 I appreciate it! I did youtube in university so was able to have a decently high income compared to most student jobs and then put that aside to cover a lot of things after i quit + build up some savings.

But also made a ton of mistakes, ive put over 10k in crypto and i wish i just put all of that money into etfs.

 

[oilumiun12]

@parsonbrown If you want to generate passive income I would strongly advise you to look into dividend ETFs or stocks. If want to use the dividends to pay for rent, food etc, in the future, I would look into distributing dividend ETFs.

 

[jenniwrenn]

@oilumiun12 I'd actually advise against this on the basis of tax inefficiency, and would recommend accumulating ETFs (where OP isn't directly exposed to dividends), and just reducing contributions for when rent/food/etc money is needed today.

In the future, OP can rebalance and buy whatever makes for the greatest total return (taxes included).

 

[parsonbrown]

@jenniwrenn Thanks! Would you say in this case then to look for an additional acc ETF (next to my current VWCE) like S&P500? Or to just scale up my monthly investments into VWCE.

 

[jenniwrenn]

@parsonbrown VWCE "includes" S&P500 in a way, I (personally) don't see a point in getting both.

I would consider a "factor" or a "sector" fund to increase "tilt" towards something I feel strongly about.

For example a further tilt towards tech, which I'd implement the tilt by essentially buying equally across the two VWCE and e.g. SXRV and/or EQQB.

Not sure what's the best way to rebalance between the two - there's various options

 

[parsonbrown]

@jenniwrenn Aha that makes a lot of sense yeah. In that case I could look into sectors (tech would be my go to as well), and look for suitable ETFs for those sectors to focus a bit more there while keeping up VWCE.

I think this makes a lot of sense indeed, also good to know that SP companies are inside VWCE already. Thanks so much for this, super clear

 

[parsonbrown]

@oilumiun12 Thanks. Do you have any examples of those to look into? I assume the dividend payments would be 0.5-1.5% at best - is that accurate?

 

[shaynex]

@parsonbrown Depends where u live. Dividends are not good in many EU countries

 

[parsonbrown]

@shaynex I have Dutch nationality but living in Austria. So i could realistically invest from either country

 

[barrya4202]

@parsonbrown Taxes have nothing to do with your nationality. They are determined by the country you live in. So, Austria would be relevant for you. Austria doesn’t differentiate between distributed and accumulated gains, they are taxed the same.

EDIT: Just to add that if you’re investing using an Austrian broker, it makes sense to have a tax-friendly(?) broker. They will report the taxes for you, otherwise you’ll have to calculate and report them yourself. Not the easiest system I know. Flatex is often recommended as a broker.

 

[parsonbrown]

@barrya4202 My reply was just about the dividend payout rates, not the taxes accompanying them. As far as i saw the previous commenter wasn’t talking about the taxes in the EU countries?

And thanks a lot, will note it down to look at Flatex. I’m currently just relying on Degiro

 

[oilumiun12]

@parsonbrown I personally invest most of my money into a S&P 500 and world ETF, accumulative not distributive. But I hand-pick like 20-25 stocks and most of them pay dividends.

I would advise you to look into a distributive dividend ETFs. Check for expense ratio, historical growth and holdings. I buy ETFs from iShares.

You can check their websites for the dividend ETFs they offer. If you wanna collect the money personally and use it to pay your rent in the future you have to choose the distribution one!

https://www.ishares.com/us/products/investment-goals#/funds?categoryId=1&subcategoryId=8

 

[parsonbrown]

@oilumiun12 Thanks. So in the case i go for a distributing etf (right now i have an accumulating one), would you recommend just sticking to one option and putting money into an accumulating one and a distributing one equally?