I can see your point, but in the long run I need that constant passive cashflow. It's just my personal thing, as a positive feedback or fruit of my hard work. Also, it gives me safety, because the dividend stock means a reliable source of income, even if it's price is down.
I'm 23, I have the time and patience to build my dividend portfolio. (That doesn't mean I won't buy non-dividend stocks, but it only will make a fragment of my portfolio)
You definitely need to read more about dividend irrelevance.
You can sell shares to create your own cashflow and it's a superior option because you can use the WH rate you want, as opposed to one dictated by CFOs of companies, who have no particular financial planning purpose in mind when making the distributions.
But when the index is down, you lost as much money in both cases, dividends or not.
There is no magical rubber banding for dividend stocks as opposed to other stocks...
How is that relevant if the index goes down ? Please read Modigliani Miller paper again....
Unless you're a 100% efficient-market believer you should see the difference. The market can be overvalued and similarly undervalued as well. In the later case when you sell your shares to generate cashflow you'll realize losses. Dividends are usually not effected by the general sentiment, fear and greed index. Imagine two investments with the same total return. One is very volatile the other one is not. Which one do you prefer?
But in that scenario you described - selling shares when the stock is down - the money that company spends on the dividend is not some magical sum, the valuation of the company will reflect the dividend. So I'd argue that it's even worse if that company issues a dividend when the stock is down, it puts additional downward pressure on the valuation.
There's a reason for the popularity of share buybacks, it's a more efficient way of distributing cash to shareholders.
But I guess there's not much point in us arguing, there's more than enough literature on this topic. OP was pointed to a potential flaw in their strategy, it's up to them to decide. We can't also argue with the psychology of it, if someone feels better with dividend investing then that's more than fair.
Ok, where should I start. First of all MM's irrelevance theory doesn't say that dividends are good or bad, in fact it only says that all feasible payout policies are optimal, or in other words, payout decision is irrelevant because it neither creates nor destroys value for shareholders, so any policy a CEO could choose yields identical stockholder wealth. Which is of course not true in the real world but lets assume it is. Based on this there is no point of discouraging anyone from dividend investing since according to MM payout policy doesn't matter so dividend investing is no better or worse than non dividend investing. There are countries where CGT and dividend tax are the same or the latter is lower than the former.
But the original statement is also problematic. The MM paper neglects agency costs, company lifecycle theory and market inefficiencies.
If a company piles up lots of cash there is extensive evidence that managers will waste resources, the company will more likely make overpriced
acquisitions, operate inefficiently and make poor investment decisions. CEOs may be tempted to pursuit non-profitable investments, promote inefficiency and do "diworsification", that is investing in something in for the sake of diversification even if it doesn't fit into the company portfolio. There are many examples like this, e.g.: Coca-Cola once built shrimp farms, LOL.
Regarding company lifecycle theory it is important to know that mature companies have less investment opportunities than a young one. If a company retains cash and uses it to investing in something non optimal just to avoid dividend paying doesn't generate share holder value. In fact it destroys it. So if company A is mature company with high profitability but limited growth aspect and it doesn't pay dividend and company A' is the same as A but it pays dividend than which one creates more shareholder value? The one that pays out the dividends to its shareholder.
Of course there is a sweetspot here, because unlike in the MM paper which only considered 0% FCF payout and 100% FCF payout, in reality a company can choose to pay out X % of its FCF and retain only a part which can be well spent on investments where RoR is greater than WACC.
And at last market inefficiencies. If a company pays out X amount of cash its value will decrease with X. Ok, but will the price reflect it? If the market is 100% efficient than yes. But if you seriously believe this, I would like to ask you if you ever heard about GME or BBBY? In reality stock prices go up following unexpected dividend announcement and fall after unexpected dividend decreases.
Just because there is a popular paper on this topic it doesn't mean it all true and all applicable in the real world. People should read the critics as well.
For people who downvote without understanding what I'm saying, here is an example:
You hold 100 shares of company A. The market price of a share is $10. However the book value / share is lets say $12.5. So P/B is 80%. Nothing extraordinary, this happens all the time, the share has a book value below 1, so it is traded at a discount.
You need to generate $100 cashflow so you sell 10 shares and end up having 90 shares worth of $900. The fair value if one share is $12.5 (that's where P/B = 1). When the market corrects you'll end up having 12.5 * 90 = $1125.
Lets see the dividend case.
You still hold 100 shares of company A, with a market price of $10 / share, book value is the same, fair value is he same. You don't sell any shares this time because you have just received $1 dividends per share, $100 in total. You still have 100 shares. However book value decreased because of the dividend payment so it's only $11.5. Therefore the fair value of one share is $11.5 (that's where P/B = 1) and you have 100 shares. After the market correction you'll have 11.5 * 100 = $1150.
TL:DR It's wrong to assume that the P/B will end up the same because they don't start the same. Don't assume cash at bank intended to be distributed or reinvested is discounted the same as the productive assets.
Proof
# Assumptions:
\- Cash not distributed is reinvested in the business (else it's not the same business with the same balance sheet so performance and valuation cannot be compared.
\- $1 of Cash readily distributable in the books is valued by the market at $1. $1 is either reinvested in the business and it's present value (PV) is $1 (by definition using the discount rate of the market), or it will exit the books as a future dividend and it's valued by investors at 1$). If that's not the case, then by comparing a distribution/reinvestment case, we would be comparing two different businesses with different operations that cannot be compared.
# Base conditions
In both cases before any dividend/reinvestment from Company A, the balance sheet per share looks like this:
$11.5 of book assets valued at $9 by the market
$1 of book cash valued at $1 by the market
Share price : $10
Book value : $12.5
Here the \*operations\* are discounted at a ratio of 11.5/9 = 0.7826 in both case before any distribution.
The cash is not discounted by the market because it's assumed to be either distributed or reinvested in the operations, and its PV is always $1.
We assume the market is wrong in discounting the assets at a ratio of around 0.7826 and it will reverse.
# CASE 1: The company chose to distribute
Immediately after distribution, Share price is $9. Right after the revaluation, the performance due to reevaluation of operation will be 11.5/9 -1= 27.77%. P/B went from 0.7826 to 1. You now have 90\*$11.5 = $1150 as you said.
# CASE 2: No distribution occurred and cash was reinvested in the business
We assume they reinvested in the same business, so for every $1 reinvested, the book will be revalued by 27.77%. We start from book value $12.5 and market price $10. After reevaluation, we have book value 12.5 and market price 10\*(1+27.77%) = 12.77. P/B went from 0.80 to 1.02. You have 90 shares at $12.77 =... $1150 (rounding)
# Conclusion
But why aren't the P/B the same ? well it's because they did not start the same either. What counts for you is how much discount there is on the productive assets that are not cash. Here we prove that if the productive asset are misvalued to the same extent, the performance will be the same with the cash reinvested or distributed. If cash is misvalued, then there is an arbitrage to do at the moment of dividend distribution or reinvestment. If the company chose to reinvest, but not in the same asset, then we can't compare the two situations because the balance sheet will be different in the case they distribute or reinvest. In practice, the market often have expectation on what is the present value of that cash in the books (depending on how it will be invested). Surprise announcement about how it will be reinvested or distributed can move the price right after the announcement but unless you know in advance what the surprise will be, you will not be able to arbitrage that. hence dividends are irrelevant, to the extend of course that cash is not misvalued on the basis of the assumptions used by the market on how it will be used.
Hope that's clear enough... sorry it was long.
Thanks for taking the time to respond. I have some doubts with this calculation. My understanding is that you expect that the cash can be invested into the base business with the same rate of return what the original business generates (ROIC vs ROIIC). While we're in a down market it is reasonable to expect that the management will have troubles finding good investment opportunities. Cost of capital went up, interest rates went up. Just because I have a restaurant that generates profit, it doesn't mean I can open a new one and expect similar returns. At least not immediately, and by the time good opportunities arrive the company might already used up the cash on bad investments.
Secondly, if share price is undervalued and you keep selling to generate cashflow, you're effectively overpaying for the cashflow, that is selling more shares than needed if the share was fairly priced. On the other hand cash leaving the company is always fairly valued. In the end we should see this difference.
We don't know how long after the market corrects. If it takes a decade, you might run out of shares to sell, before a correction happens.
Are they open to foreigners?
- Yes unless you are black or with darker skin-turk/arab type.
What about the average level of spoken english?
- 90% of the young people speak English in Sofia, 30-50% in Plovdiv,Varna and Burgas. In the smaller towns and villages around 5-10% unless it is tourist destination.
Would the everyday life be more difficult just because I don't speak the local language?
- No
Is the public transportation good?
- Great in Sofia during the day, mediocre in Plovdiv,Varna and Burgas
In bigger cities like Sofia or Varna. What about bikes and e-scooters, are these cities OK with them?
- Yes- there are a lot of them, however you should be mad to drive one as foreigner. We drive like in Mad Max.. too many people die on the road and there is little to no bike/e-scooter infrastructure.
Is the local cuisine good
- Yes
Check this for taxes>
https://dmitryfrank.com/articles/bulgaria_freelance_taxes
I spend a good chunk of time in BG every year and plan to buy property there, so this is my perspective.
People in this region are not known for being super friendly. They're not UNfriendly and they'll be helpful and kind when you interact with them, but you're unlikely to go into a bar and come out with a herd of Bulgarian friends.
The language will depend on where you are. If you're somewhere with any level of tourism, you should be ok. But I've definitely been places where literally no one spoke a word of English. But as you're unlikely to settle in a small rural village, I doubt it would be a problem.
There is public transport. It's ok. It's not as developed as in some countries, especially for traveling between places. But you can get around. Again, it's location dependent. Sofia is going to be better than some beach area for transport.
Rents can definitely be cheap. The place I usually rent is on the nice/expensive end of the spectrum and is €270/month for a good size 1 br.
Bulgaria is a crossroads country where dozens of cultures and foods passed through over the centuries. Bulgaria adopted none of them. You can get good food there, but Bulgarian food itself is boring. Under spiced and bland. Very meat heavy with limited veggie choices. But it's ok and, as stated, there will be other food options and you can buy most of what you might want at a supermarket to spice things up. One thing I've had continual bad luck with is minced meat. I have no idea what they do to it there but it always has the texture of rubber, so I have a butcher special grind it or I grind my own.
Minced meat, sausages, hotdogs... You don't know what the companies put in them so consume with caution. Same for a lot of local cheese... Gladly it's now mandatory to document vegetable cheese... As a Bulgarian I really like the Bulgarian food... There are plenty of restaurant options for other kinds of food though so eating out is never a problem in a bigger city...
I've had worse food and i'm a carnivore so i appreciate the wide variety of choices in grilled meats. i just prefer a broader spice profile and alternatives to a shopska salad. :) but the country itself is lovely and i always enjoy my time there.
Food in Bulgaria is great, this is simply not true 😂. I have lived in Norway,France and England and would proudly say that we are not bad at all compared to France and England and if you check the right places you could get amazing food. Norway’s food is trash
That's your opinion, and that is fine. But all the people I know who live there as expats/visitors complain how boring Bulgarian food is. Un/underseasoned grilled meat and shopska salad gets old.
1. Yes
2. Its high. You wont have issues.
3. Its okay. You can also bike or e-scoot as well.
4. You can find two bed appartment in the city center for as little as 600-700€.
5. Yup, its very good.
Also, Divi tax is 10%.
Sofia > Varna
Yeah, being able to do my everyday things in english would be more than enough for me for a starter. Later I wanna learn the local language anyway.
Thanks for the infos!
Move to the Ardennes in Belgium....plain unspoiled nature, cheap rental, non-double taxation treaties in place and a quick drive to the coast...and cool people !
The FI in FIRE stands for Financial Independence, with
Financial _Dependence_ being the state where you are providing useful contributions to the society and in exchange you get financial income (salary). By being Financially Independent, you aspire to be a useless member of the society. Shame.
I feel the cognitive dissonance. You need tons of money te be FIRE. If you managed to accumulate that much wealth you probably already contributed more to society than any avarege people. If you retire and start spending the money generated by your portfolio, you'll still pay taxes after every spending. It's called VAT. In your home country this is record high, 27%. In most countries you'll also pay taxes after your investments. Either in form of capital gain tax or dividend tax. You won't stop contributing after you early retire. People are free to decide to choose an average paying job and do that until they die, or pursuit a far better paying job, and contribute more for a shorter period of time, then retire.
1. Very naive of you to think that people who have lots of money are also the people who actually contributed.
2. Everybody pays VAT, not just the rich.
3. Yes, you pay taxes on investments, but investment returns are already a scam. You did not do anything, you just gain more money because you already had a lots of money.
4. It's not about earning the money. It's about putting your time and presence on this Earth to a good use as long as you can. Not for the money but for the sake of it.
Actually, in Holland it is not known yet what taxes on stocks will look like in the upcoming decade and beyond. There is a lot of fuss over "box 3" , as the taxes on assets are called here, and it's likely that we will see a 30% tax rate on actual gains, whether they are dividends or interest or capital gains.
Hello! Starting one by one:
1. Yes, they are open to foreigners. You are not the first one, especially in Nessebar or Bansko municipalities ( in these areas you may find the highest concentration of English speakers )
2. The average level varies per location. For example- the Dutch have the highest English proficiency as a second language, but try and go to Gorredijk and ask for directions in English. Same here - big cities would have enough English speakers.
3. There is rental scooters everywhere in the big cities, but long-term is cheaper to buy. We don't have prohibitions for that here, as we don't for many other things.
4. 400 Euro/month is a high rental. You are looking at summer short-term rentals.
5. It's a mixture of balkan cuisine, like all the balkans. You all learn to eat tripe soup once you settle in the country. Protip- you will find out on Sunday morning how good it is.
+1 Depends on the type of dividends you have. If it is interests from deposits, its 0% per year, you just have to declare it. If it is company share dividends you shall pay 5% dividend tax/year.
Yes, it is better from your point of view. Keep in mind, if you do business, corporate tax is higher than dividends tax - it is 10% +5% dividend on the remaining.
Accountant here, but any BG accountant would be able to help you. Most in the cities do speak English. Good luck!
Instead of uprooting your life I'd suggest thinking about your investment strategy - you can google 'dividends irrelevance' as a start
I can see your point, but in the long run I need that constant passive cashflow. It's just my personal thing, as a positive feedback or fruit of my hard work. Also, it gives me safety, because the dividend stock means a reliable source of income, even if it's price is down. I'm 23, I have the time and patience to build my dividend portfolio. (That doesn't mean I won't buy non-dividend stocks, but it only will make a fragment of my portfolio)
You definitely need to read more about dividend irrelevance. You can sell shares to create your own cashflow and it's a superior option because you can use the WH rate you want, as opposed to one dictated by CFOs of companies, who have no particular financial planning purpose in mind when making the distributions.
Good luck creating your own cashflow when your index is 40% down.
But when the index is down, you lost as much money in both cases, dividends or not. There is no magical rubber banding for dividend stocks as opposed to other stocks... How is that relevant if the index goes down ? Please read Modigliani Miller paper again....
Unless you're a 100% efficient-market believer you should see the difference. The market can be overvalued and similarly undervalued as well. In the later case when you sell your shares to generate cashflow you'll realize losses. Dividends are usually not effected by the general sentiment, fear and greed index. Imagine two investments with the same total return. One is very volatile the other one is not. Which one do you prefer?
But in that scenario you described - selling shares when the stock is down - the money that company spends on the dividend is not some magical sum, the valuation of the company will reflect the dividend. So I'd argue that it's even worse if that company issues a dividend when the stock is down, it puts additional downward pressure on the valuation. There's a reason for the popularity of share buybacks, it's a more efficient way of distributing cash to shareholders. But I guess there's not much point in us arguing, there's more than enough literature on this topic. OP was pointed to a potential flaw in their strategy, it's up to them to decide. We can't also argue with the psychology of it, if someone feels better with dividend investing then that's more than fair.
Ok, where should I start. First of all MM's irrelevance theory doesn't say that dividends are good or bad, in fact it only says that all feasible payout policies are optimal, or in other words, payout decision is irrelevant because it neither creates nor destroys value for shareholders, so any policy a CEO could choose yields identical stockholder wealth. Which is of course not true in the real world but lets assume it is. Based on this there is no point of discouraging anyone from dividend investing since according to MM payout policy doesn't matter so dividend investing is no better or worse than non dividend investing. There are countries where CGT and dividend tax are the same or the latter is lower than the former. But the original statement is also problematic. The MM paper neglects agency costs, company lifecycle theory and market inefficiencies. If a company piles up lots of cash there is extensive evidence that managers will waste resources, the company will more likely make overpriced acquisitions, operate inefficiently and make poor investment decisions. CEOs may be tempted to pursuit non-profitable investments, promote inefficiency and do "diworsification", that is investing in something in for the sake of diversification even if it doesn't fit into the company portfolio. There are many examples like this, e.g.: Coca-Cola once built shrimp farms, LOL. Regarding company lifecycle theory it is important to know that mature companies have less investment opportunities than a young one. If a company retains cash and uses it to investing in something non optimal just to avoid dividend paying doesn't generate share holder value. In fact it destroys it. So if company A is mature company with high profitability but limited growth aspect and it doesn't pay dividend and company A' is the same as A but it pays dividend than which one creates more shareholder value? The one that pays out the dividends to its shareholder. Of course there is a sweetspot here, because unlike in the MM paper which only considered 0% FCF payout and 100% FCF payout, in reality a company can choose to pay out X % of its FCF and retain only a part which can be well spent on investments where RoR is greater than WACC. And at last market inefficiencies. If a company pays out X amount of cash its value will decrease with X. Ok, but will the price reflect it? If the market is 100% efficient than yes. But if you seriously believe this, I would like to ask you if you ever heard about GME or BBBY? In reality stock prices go up following unexpected dividend announcement and fall after unexpected dividend decreases. Just because there is a popular paper on this topic it doesn't mean it all true and all applicable in the real world. People should read the critics as well.
For people who downvote without understanding what I'm saying, here is an example: You hold 100 shares of company A. The market price of a share is $10. However the book value / share is lets say $12.5. So P/B is 80%. Nothing extraordinary, this happens all the time, the share has a book value below 1, so it is traded at a discount. You need to generate $100 cashflow so you sell 10 shares and end up having 90 shares worth of $900. The fair value if one share is $12.5 (that's where P/B = 1). When the market corrects you'll end up having 12.5 * 90 = $1125. Lets see the dividend case. You still hold 100 shares of company A, with a market price of $10 / share, book value is the same, fair value is he same. You don't sell any shares this time because you have just received $1 dividends per share, $100 in total. You still have 100 shares. However book value decreased because of the dividend payment so it's only $11.5. Therefore the fair value of one share is $11.5 (that's where P/B = 1) and you have 100 shares. After the market correction you'll have 11.5 * 100 = $1150.
TL:DR It's wrong to assume that the P/B will end up the same because they don't start the same. Don't assume cash at bank intended to be distributed or reinvested is discounted the same as the productive assets. Proof # Assumptions: \- Cash not distributed is reinvested in the business (else it's not the same business with the same balance sheet so performance and valuation cannot be compared. \- $1 of Cash readily distributable in the books is valued by the market at $1. $1 is either reinvested in the business and it's present value (PV) is $1 (by definition using the discount rate of the market), or it will exit the books as a future dividend and it's valued by investors at 1$). If that's not the case, then by comparing a distribution/reinvestment case, we would be comparing two different businesses with different operations that cannot be compared. # Base conditions In both cases before any dividend/reinvestment from Company A, the balance sheet per share looks like this: $11.5 of book assets valued at $9 by the market $1 of book cash valued at $1 by the market Share price : $10 Book value : $12.5 Here the \*operations\* are discounted at a ratio of 11.5/9 = 0.7826 in both case before any distribution. The cash is not discounted by the market because it's assumed to be either distributed or reinvested in the operations, and its PV is always $1. We assume the market is wrong in discounting the assets at a ratio of around 0.7826 and it will reverse. # CASE 1: The company chose to distribute Immediately after distribution, Share price is $9. Right after the revaluation, the performance due to reevaluation of operation will be 11.5/9 -1= 27.77%. P/B went from 0.7826 to 1. You now have 90\*$11.5 = $1150 as you said. # CASE 2: No distribution occurred and cash was reinvested in the business We assume they reinvested in the same business, so for every $1 reinvested, the book will be revalued by 27.77%. We start from book value $12.5 and market price $10. After reevaluation, we have book value 12.5 and market price 10\*(1+27.77%) = 12.77. P/B went from 0.80 to 1.02. You have 90 shares at $12.77 =... $1150 (rounding) # Conclusion But why aren't the P/B the same ? well it's because they did not start the same either. What counts for you is how much discount there is on the productive assets that are not cash. Here we prove that if the productive asset are misvalued to the same extent, the performance will be the same with the cash reinvested or distributed. If cash is misvalued, then there is an arbitrage to do at the moment of dividend distribution or reinvestment. If the company chose to reinvest, but not in the same asset, then we can't compare the two situations because the balance sheet will be different in the case they distribute or reinvest. In practice, the market often have expectation on what is the present value of that cash in the books (depending on how it will be invested). Surprise announcement about how it will be reinvested or distributed can move the price right after the announcement but unless you know in advance what the surprise will be, you will not be able to arbitrage that. hence dividends are irrelevant, to the extend of course that cash is not misvalued on the basis of the assumptions used by the market on how it will be used. Hope that's clear enough... sorry it was long.
Thanks for taking the time to respond. I have some doubts with this calculation. My understanding is that you expect that the cash can be invested into the base business with the same rate of return what the original business generates (ROIC vs ROIIC). While we're in a down market it is reasonable to expect that the management will have troubles finding good investment opportunities. Cost of capital went up, interest rates went up. Just because I have a restaurant that generates profit, it doesn't mean I can open a new one and expect similar returns. At least not immediately, and by the time good opportunities arrive the company might already used up the cash on bad investments. Secondly, if share price is undervalued and you keep selling to generate cashflow, you're effectively overpaying for the cashflow, that is selling more shares than needed if the share was fairly priced. On the other hand cash leaving the company is always fairly valued. In the end we should see this difference. We don't know how long after the market corrects. If it takes a decade, you might run out of shares to sell, before a correction happens.
Unless you are all in some VWCE equivalent, people here will think you're an idiot.
Are they open to foreigners? - Yes unless you are black or with darker skin-turk/arab type. What about the average level of spoken english? - 90% of the young people speak English in Sofia, 30-50% in Plovdiv,Varna and Burgas. In the smaller towns and villages around 5-10% unless it is tourist destination. Would the everyday life be more difficult just because I don't speak the local language? - No Is the public transportation good? - Great in Sofia during the day, mediocre in Plovdiv,Varna and Burgas In bigger cities like Sofia or Varna. What about bikes and e-scooters, are these cities OK with them? - Yes- there are a lot of them, however you should be mad to drive one as foreigner. We drive like in Mad Max.. too many people die on the road and there is little to no bike/e-scooter infrastructure. Is the local cuisine good - Yes Check this for taxes> https://dmitryfrank.com/articles/bulgaria_freelance_taxes
I spend a good chunk of time in BG every year and plan to buy property there, so this is my perspective. People in this region are not known for being super friendly. They're not UNfriendly and they'll be helpful and kind when you interact with them, but you're unlikely to go into a bar and come out with a herd of Bulgarian friends. The language will depend on where you are. If you're somewhere with any level of tourism, you should be ok. But I've definitely been places where literally no one spoke a word of English. But as you're unlikely to settle in a small rural village, I doubt it would be a problem. There is public transport. It's ok. It's not as developed as in some countries, especially for traveling between places. But you can get around. Again, it's location dependent. Sofia is going to be better than some beach area for transport. Rents can definitely be cheap. The place I usually rent is on the nice/expensive end of the spectrum and is €270/month for a good size 1 br. Bulgaria is a crossroads country where dozens of cultures and foods passed through over the centuries. Bulgaria adopted none of them. You can get good food there, but Bulgarian food itself is boring. Under spiced and bland. Very meat heavy with limited veggie choices. But it's ok and, as stated, there will be other food options and you can buy most of what you might want at a supermarket to spice things up. One thing I've had continual bad luck with is minced meat. I have no idea what they do to it there but it always has the texture of rubber, so I have a butcher special grind it or I grind my own.
Minced meat, sausages, hotdogs... You don't know what the companies put in them so consume with caution. Same for a lot of local cheese... Gladly it's now mandatory to document vegetable cheese... As a Bulgarian I really like the Bulgarian food... There are plenty of restaurant options for other kinds of food though so eating out is never a problem in a bigger city...
I've had worse food and i'm a carnivore so i appreciate the wide variety of choices in grilled meats. i just prefer a broader spice profile and alternatives to a shopska salad. :) but the country itself is lovely and i always enjoy my time there.
Food in Bulgaria is great, this is simply not true 😂. I have lived in Norway,France and England and would proudly say that we are not bad at all compared to France and England and if you check the right places you could get amazing food. Norway’s food is trash
That's your opinion, and that is fine. But all the people I know who live there as expats/visitors complain how boring Bulgarian food is. Un/underseasoned grilled meat and shopska salad gets old.
1. Yes 2. Its high. You wont have issues. 3. Its okay. You can also bike or e-scoot as well. 4. You can find two bed appartment in the city center for as little as 600-700€. 5. Yup, its very good. Also, Divi tax is 10%. Sofia > Varna
If you’re not tied to the local labour market, Varna > Sofia all the way. Dividend tax is 5% not 10%.
OP is a dividend investors, he is likely invested in US dividend stocks. Dividend tax is 10% on those.
Where would you go if you want to stay at the black sea region?
[удалено]
Yeah, being able to do my everyday things in english would be more than enough for me for a starter. Later I wanna learn the local language anyway. Thanks for the infos!
A down vote for suggesting “happy” as a good restaurant
Believe it or not it got awarded best restaurant in London…..
Move to the Ardennes in Belgium....plain unspoiled nature, cheap rental, non-double taxation treaties in place and a quick drive to the coast...and cool people !
The FI in FIRE stands for Financial Independence, with Financial _Dependence_ being the state where you are providing useful contributions to the society and in exchange you get financial income (salary). By being Financially Independent, you aspire to be a useless member of the society. Shame.
I feel the cognitive dissonance. You need tons of money te be FIRE. If you managed to accumulate that much wealth you probably already contributed more to society than any avarege people. If you retire and start spending the money generated by your portfolio, you'll still pay taxes after every spending. It's called VAT. In your home country this is record high, 27%. In most countries you'll also pay taxes after your investments. Either in form of capital gain tax or dividend tax. You won't stop contributing after you early retire. People are free to decide to choose an average paying job and do that until they die, or pursuit a far better paying job, and contribute more for a shorter period of time, then retire.
1. Very naive of you to think that people who have lots of money are also the people who actually contributed. 2. Everybody pays VAT, not just the rich. 3. Yes, you pay taxes on investments, but investment returns are already a scam. You did not do anything, you just gain more money because you already had a lots of money. 4. It's not about earning the money. It's about putting your time and presence on this Earth to a good use as long as you can. Not for the money but for the sake of it.
OP if you want DM me. We could find a good deal here.
In Holland divident tax is 15%. Expenses are higher but you would earn much more as a software developer and everyone speaks English.
I don’t think he’s looking to work in Bulgaria, what I took is that he works remotely. He’d be making less in NL because of higher taxes over there.
Actually, in Holland it is not known yet what taxes on stocks will look like in the upcoming decade and beyond. There is a lot of fuss over "box 3" , as the taxes on assets are called here, and it's likely that we will see a 30% tax rate on actual gains, whether they are dividends or interest or capital gains.
And also “tax for rich” which takes fixed percentage of almost all your savings
How will you manage pension?
From dividends I guess. Not as I'd have any other option looking at the economic and demographic situation of my country.
Curious, Where are you from?
Hello! Starting one by one: 1. Yes, they are open to foreigners. You are not the first one, especially in Nessebar or Bansko municipalities ( in these areas you may find the highest concentration of English speakers ) 2. The average level varies per location. For example- the Dutch have the highest English proficiency as a second language, but try and go to Gorredijk and ask for directions in English. Same here - big cities would have enough English speakers. 3. There is rental scooters everywhere in the big cities, but long-term is cheaper to buy. We don't have prohibitions for that here, as we don't for many other things. 4. 400 Euro/month is a high rental. You are looking at summer short-term rentals. 5. It's a mixture of balkan cuisine, like all the balkans. You all learn to eat tripe soup once you settle in the country. Protip- you will find out on Sunday morning how good it is. +1 Depends on the type of dividends you have. If it is interests from deposits, its 0% per year, you just have to declare it. If it is company share dividends you shall pay 5% dividend tax/year. Yes, it is better from your point of view. Keep in mind, if you do business, corporate tax is higher than dividends tax - it is 10% +5% dividend on the remaining. Accountant here, but any BG accountant would be able to help you. Most in the cities do speak English. Good luck!