Just keep what you have in the distributing one and start buying the accumulating. There is no point in selling. You won't get there a lot faster and you will have to pay taxes on the sale. It doesn't make sense
> You won't get there a lot faster
I didn't quite get this point. I have around 40K in the Distributing fund and only 18K in Accumulating. By moving it all over into the Accumulating I'm definitely gonna break 100K sooner?
If your objective is to have 100k invested in a single fund then yes. But I thought your goal was to have 100k invested overall not in a single fund.
I don't understand why you would want to sell just to have 100k in acc rather looking at the overall value of your investments. But well, you do you. I've shared my opinion and what make senses to me
> I don't understand why you would want to sell just to have 100k in acc rather looking at the overall value of your investments
Because from the link I posted, the larger your fund is, the better the compounding effect works. So by having two separate funds, I am kind of increasing the time frame to reach my FIRE goals since if I put everything in ACC, I'd have a larger capital there and therefore a higher dividend that gets reinvested and so on.
It doesn't make a difference, but if you think it does, why even ask? Were you asking for confirmation?
Barely anyone will tell you that makes sense, but if you want to do it, then go ahead š
You currently have optimized investing according to the tax characteristics of you country of residence. Looking to mess with it because of some phycological/motivation articles regarding investing seems like bad practice to me.
I kinda went through the same and decided to just keep the distributing ones and start buying accumulating ones from then on. I'm in the Netherlands though and here one should pay taxes when selling shares. I'm also curious to hear others' opinions.
Iām in NL too and thereās no gains tax here. You are taxed on the total asset value in box 3. So basically if you donāt sell shares but their value is over non taxed threshold you will start paying taxes on the surplus anyway. Acc or Distributing, all the same.
Regarding the accumulation, donāt forget the āVoabpauschaleā in Germany. Because of the end of the zero-interest-times accumulating ETFs will be taxed as well before youāll liquidate your shares in the future.
Btw. I wouldnāt swap from disturbing to accumulating ones, because the distributions are like a compensation for the risk for me. And as well they will help me to stay on with my asset accumulation.
Greetings from Germany
Thank you.
What exactly do you mean by "asset accumulation"?
> Because of the end of the zero-interest-times accumulating ETFs will be taxed as well before youāll liquidate your shares in the future.
Fair point. But don't you think having all your money in an Accumulating fund will help you reach your FIRE goals earlier than having a huge chunk in Distributing for tax benefits?
>Would this be a wise choice considering the taxes I'll have to pay on
the sell and perhaps the price fluctuation when selling and buying?
No, it wouldnt. Also you get double dipped in fees.
There's something I don't understand: why is there a difference if you go accumulating rather than distributing? Wouldn't it be the same if you just manually reinvest all dividends into the distributing ETF?
I guess that could work. But my doubt is whether I am better off putting all the money in one fund in order to get higher dividends or split them in two.
In anyway, in order to move the funds I will have to sell them and pay tax so it's not really viable for me.
I also live in Germany. I personally started investing in an all world accumulating ETF. Now I'm trying to switch to a distributing one (i.e., leaving everything as is and investing now in distributing ETFs) . I found that in Germany it really is better to wait until you reach the 1,000 (or so) threshold in dividends and then switch to accumulating ETFs (while reinvesting the dividends). This is specially true if you need to calculate your ETF taxes yourself (which is my case because I'm with Degiro).
Makes sense. By reinvesting the dividends back into the distributing ETF you basically are leveraging the tax benefits Germany is offering. Although, I am always tempted to use the dividends as a reward for investing regularly with discipline :P
I guess... I can split it 50/50
Why would you reach 100K earlier with ACC if you are re-investing the dividends directly (manually) in the DIST version?
I also live in Germany and whenever I had dividends paid out, I just increase the savings plan for the next month accordingly and it gets re-invested.
So do I get it right that re-investing the dividends manually in the DIST fund and having the dividends automatically reinvested in the ACC fund have basically the same compounding effect?
The reason I wanted to move it ACC is so that I can reach a bigger base capital sooner and then let the compounding effect kick in earlier.
Yes and no, If you are not taxed on the dividends it's basically the same. If you are taxed on the dividends then the accumulating one will be better. So as most suggest here. Just keep your current one but reinvest the dividends into the accumulating one instead.
The only small difference there would be is the cost of using the dividends again as you will have to pay the fees and taxes if applicable on the transaction.
I had somewhat similar question few weeks ago. Take a look [here](https://www.reddit.com/r/eupersonalfinance/comments/12jjcdl/did_i_make_a_mistake_with_vwrl/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1)
In my case in made sense to move to Acc because my broker takes 2.5% commission of the paid dividends. This would add up to a significant amount over the years.
In my opinion you would have been much better off just transferring your shares from Degiro to IBKR for 10ā¬ instead of selling, but in the end it's up to you!
Edit: ok, just read you were pretty much break-even (no taxable profits), in that case it doesn't matter
Just keep what you have in the distributing one and start buying the accumulating. There is no point in selling. You won't get there a lot faster and you will have to pay taxes on the sale. It doesn't make sense
> You won't get there a lot faster I didn't quite get this point. I have around 40K in the Distributing fund and only 18K in Accumulating. By moving it all over into the Accumulating I'm definitely gonna break 100K sooner?
If your objective is to have 100k invested in a single fund then yes. But I thought your goal was to have 100k invested overall not in a single fund. I don't understand why you would want to sell just to have 100k in acc rather looking at the overall value of your investments. But well, you do you. I've shared my opinion and what make senses to me
> I don't understand why you would want to sell just to have 100k in acc rather looking at the overall value of your investments Because from the link I posted, the larger your fund is, the better the compounding effect works. So by having two separate funds, I am kind of increasing the time frame to reach my FIRE goals since if I put everything in ACC, I'd have a larger capital there and therefore a higher dividend that gets reinvested and so on.
You know that 7% of 40k + 7% of 60k Is the same as 7% of 100k, right? Right?
It makes no difference how many different funds you're invested in if they track the same thing. Why do you think it does?
It doesn't make a difference, but if you think it does, why even ask? Were you asking for confirmation? Barely anyone will tell you that makes sense, but if you want to do it, then go ahead š
I am asking questions but I guess I am asking the wrong person :) So please, carry on with your day now.
Just stop buying the distributing one. No need to sell
You currently have optimized investing according to the tax characteristics of you country of residence. Looking to mess with it because of some phycological/motivation articles regarding investing seems like bad practice to me.
This post might be more suited for r/Finanzen
I kinda went through the same and decided to just keep the distributing ones and start buying accumulating ones from then on. I'm in the Netherlands though and here one should pay taxes when selling shares. I'm also curious to hear others' opinions.
Iām in NL too and thereās no gains tax here. You are taxed on the total asset value in box 3. So basically if you donāt sell shares but their value is over non taxed threshold you will start paying taxes on the surplus anyway. Acc or Distributing, all the same.
Regarding the accumulation, donāt forget the āVoabpauschaleā in Germany. Because of the end of the zero-interest-times accumulating ETFs will be taxed as well before youāll liquidate your shares in the future. Btw. I wouldnāt swap from disturbing to accumulating ones, because the distributions are like a compensation for the risk for me. And as well they will help me to stay on with my asset accumulation. Greetings from Germany
Thank you. What exactly do you mean by "asset accumulation"? > Because of the end of the zero-interest-times accumulating ETFs will be taxed as well before youāll liquidate your shares in the future. Fair point. But don't you think having all your money in an Accumulating fund will help you reach your FIRE goals earlier than having a huge chunk in Distributing for tax benefits?
>Would this be a wise choice considering the taxes I'll have to pay on the sell and perhaps the price fluctuation when selling and buying? No, it wouldnt. Also you get double dipped in fees.
There's something I don't understand: why is there a difference if you go accumulating rather than distributing? Wouldn't it be the same if you just manually reinvest all dividends into the distributing ETF?
I guess the difference is fees and could be taxes based on where u live
I guess that could work. But my doubt is whether I am better off putting all the money in one fund in order to get higher dividends or split them in two. In anyway, in order to move the funds I will have to sell them and pay tax so it's not really viable for me.
I also live in Germany. I personally started investing in an all world accumulating ETF. Now I'm trying to switch to a distributing one (i.e., leaving everything as is and investing now in distributing ETFs) . I found that in Germany it really is better to wait until you reach the 1,000 (or so) threshold in dividends and then switch to accumulating ETFs (while reinvesting the dividends). This is specially true if you need to calculate your ETF taxes yourself (which is my case because I'm with Degiro).
Makes sense. By reinvesting the dividends back into the distributing ETF you basically are leveraging the tax benefits Germany is offering. Although, I am always tempted to use the dividends as a reward for investing regularly with discipline :P I guess... I can split it 50/50
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Sure, go for it!
Why would you reach 100K earlier with ACC if you are re-investing the dividends directly (manually) in the DIST version? I also live in Germany and whenever I had dividends paid out, I just increase the savings plan for the next month accordingly and it gets re-invested.
So do I get it right that re-investing the dividends manually in the DIST fund and having the dividends automatically reinvested in the ACC fund have basically the same compounding effect? The reason I wanted to move it ACC is so that I can reach a bigger base capital sooner and then let the compounding effect kick in earlier.
Yes and no, If you are not taxed on the dividends it's basically the same. If you are taxed on the dividends then the accumulating one will be better. So as most suggest here. Just keep your current one but reinvest the dividends into the accumulating one instead. The only small difference there would be is the cost of using the dividends again as you will have to pay the fees and taxes if applicable on the transaction.
I had somewhat similar question few weeks ago. Take a look [here](https://www.reddit.com/r/eupersonalfinance/comments/12jjcdl/did_i_make_a_mistake_with_vwrl/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=1&utm_term=1) In my case in made sense to move to Acc because my broker takes 2.5% commission of the paid dividends. This would add up to a significant amount over the years.
In my opinion you would have been much better off just transferring your shares from Degiro to IBKR for 10ā¬ instead of selling, but in the end it's up to you! Edit: ok, just read you were pretty much break-even (no taxable profits), in that case it doesn't matter