The 3 BEST Index Funds That Will Make You RICH

[@malone_financial]

Do you invest in index funds? If so, which ones and why? Have a question about index funds that I didn't cover? Leave it in the comments and I'll get back to you! Don't forget to subscribe 😄

[@gArYaBuS17]

Hi Dan! I'm currently invested in VUSA through DEGIRO, It's my one and only investment for the last 1.5 years and I'm currently 5 figures invested.

[@malone_financial]

@@gArYaBuS17 Nice one Gary, love to see it

[@davidmorrissey5075]

is there any irish index funds?? tracking aib, boi, etc?

[@malone_financial]

@@davidmorrissey5075 I know Wisdomtree used to have one. The Wisdomtree ISEQ 20 UCITS ETF. Not sure if it’s still going

[@Mad4Motors_]

Hi what broker do you use for these investments? And also how safe is your money with them? Great work btw 👍

[@malone_financial]

Hello! I use DEGIRO for all of my investing activity and have done so for years. Your money is perfectly safe, as it would be with a bank account. Check out the DEGIRO link in the description if you’d like to try it out. I also have two tutorials on the channel covering the broker platform

[@Mad4Motors_]

@@malone_financial thank you, keep going 👍

[@bilbobaggins3567]

You’re shares are only safe up to 20k, unlike a bank that would keep 100k safe though. Would you not be worried about anything over 20k?

[@mydiscworld]

Hi Dan, since start of the year I've been buying Vanguard S&P 500 UCITS ETF (USD) Acc. I buy it in Euro on Degiro but it's USD based. Happy to just buy that for a year or so and then branch out to other ETFs. The Irish tax is a killer, hopefully drop to 33% from 41% on Budget day...

[@malone_financial]

Good stuff Barry. A drop to 33% would be lovely. Though I’d be surprised if it happened given the Taxation Commission’s recent report

[@frankh7902]

@@malone_financial Instead of Irish investors investing in ETF's and having to deal with deeemed disposal tax and the 41% tax on realised earnings would we not be better to invest in stocks that act like ETF's such as Bershire Hatahaway (BRK). BRK has an average yearly compounding rate of 10% and the Irish investor would only have to pay 33% tax on earnings ?

[@TarAldarion]

VWCE and that's all that's needed

[@lukelane5222]

Do you need to declare to revenue when you purchase any ETFs?

[@Awesomepedia]

Great video, thanks Malone! You may have touched on this in other videos but have you adjusted your ratios between these funds based on recent events like the current instability of some US banks? Also, is there more we should know about the 41% exit tax? It's high enough that it's deterred me from choosing this type of investment in Ireland so far.

[@malone_financial]

Recent events in the banking sector haven't influenced my investment outlook no. As for your question on the 41% rate of tax, I'm not sure what kind of an answer you're looking for because it's a very broad question.

[@jerrywarren9304]

Hi Dan. What are the ticker symbols for your 3 ETF’s please. Love your channel

[@malone_financial]

Cheers Jerry. Ticker symbols are EUNK, EUNM and IBCF

[@jerrywarren9304]

@@malone_financial thanks Dan. I really like the idea of ETF’s and understand how important they are to a portfolio but the deemed disposal is a real turn off. I presume there is no way around deemed disposal. What’s your advise here.

[@malone_financial]

@@jerrywarren9304 The deemed disposal rule seems a lot worse at face value than it is in reality. In my opinion it’s still worth it (without question) to invest in ETFs for the long-term

[@jerrywarren9304]

Hi Dan. Happy new year. I’m ready to get going with index funds. Do you still recommend these 3 index funds?

[@jerrywarren9304]

Also Dan what % of portfolio do you recommend putting into index funds. I’m thinking 60% index funds 40% individual stocks.

[@SwolePatrol_1969]

I've been investing in the vanguard s&p500 usd that you mentioned. Are there advantages to sticking to one etf or would you recommend moving to a euro hedged one? Do I lose any compounding by having different etfs?

[@malone_financial]

Whether or not you choose to invest in a Euro hedged fund will depend on whether or not you want FX currency movements to be a factor in your investment returns. For me, I'm investing in the S&P 500 because of the companies, not the dollar. However, there is a case to be made that, as a Euro user, having dollar exposure increases diversification - but it's up to you. You don't 'lose compounding' per se by having multiple ETFs - that would only happen where the other ETFs underperform the singular ETF I suppose. But again, impossible to forecast the future in terms of returns

[@michaelrourke6544]

Hi mate great video thanks very much, For a beginner in the investment world would you advise investing smaller amounts every month for a long period of time rather than a lump some all at once as you might be putting the large amount in at the wrong time. Thanks again for your brilliant videos

[@cathyoshea4266]

Thanks for this! I always take a lot from your videos and really fantastic to hear from an Irish perspective/voice. I built an ETF portfolio last year and it very closely reflects the portfolio you described in this video - which had me feeling like my initial research was pretty sound! However only after watching this I realize all my ETF are hedged in USD which now has me curious. I noticed you said you wouldn't sell your iShares MSCI Europe ETF for tax reasons - when will it be worth it to you to sell this ETF in favor of purchasing the Vanguard fund? Essentially I am wondering whether I would be better off selling my current USD hedged ETFs in order to repurchase EUR hedged ETFs? Again - big fan and would really appreciate your insight here! I'm always sending your videos on to my friends, so you're helping close the investment gap for sure!

[@malone_financial]

Hey Cathy, first off thanks a million for the support on the videos, delighted to hear you’re finding them useful and sharing them with your friends! It’s much appreciated. For me, I will likely sell my current investment in the iShares Europe ETF when I have to pay the deemed disposal tax by year 8 of ownership. Might as well do it then when tax will be accruing regardless. Until that time I can just start building a new position with fresh capital in the Vanguard fund. Last summer I sold my old ETF portfolio and swapped over to EUR hedged ETFs where possible (also exclusively accumulating ETFs). If that’s what you want to do long-term then you might as well action it as soon as you can. You don’t necessarily have to sell if you don’t want to either, you can just start a fresh position in new ETFs. Entirely up to you. Let me know if that makes sense and/or if you need clarity on anything

[@mahibalay]

Hi Dan, investing in index, would help with gaining tax credits ? Thank you

[@malone_financial]

Not sure I follow what you mean

[@TobiAdereti]

Hey Dan, how’s things? I’m trading with vanguard s and p 500 (VUAA) for my s and p 500 the currency is in euro but it doesn’t say eur hedged in the name. Would that be similar to your ishares that’s eur hedged

[@magicpants3822]

Very informative - was always curious about what you would choose. Would you add a Property ETF to your list considering there are some property built into the other ETFs already ?

[@malone_financial]

Thanks man! Potentially, I invest in a handful of REITs directly which gives me nice exposure to real estate assets. Totally possible to do this through an ETF also if you didn’t want to research the REITs individually!

[@magicpants3822]

@@malone_financial thank you :D Yeah, ETFs will be my first choice cos lazy.

[@ayokunmifagbo1551]

I see a lot of people on KZbin talk a lot about investing in REIT’s but always from a US or Canadian perspective or in most cases not available to non US citizens. Curious about some of the REIT’s you have invested in if you don’t mind sharing 😊. By the way, started watching your videos today and have learnt so much more and gained so much understanding and knowledge. Was stuck in a no man’s land watching investment videos from American content creators😢. Only from being frustrated and confused did I search for investment for Irish citizens and came across your channel. Keep it up👍

[@alastairstaunton7081]

Great advice. I'm delighted to have discovered this channel! At 61 with a retirement lump sum coming, a reasonable employer DB pension, no mortgage or debt, would I be better with Dist. versions of these funds? In general terms...

[@malone_financial]

If you'd like to receive dividends from the funds and don't mind paying the tax!

[@Alcr-ul2pc]

Hi. Great video thanks. This might be a silly question on how accumulating ETF’s work. Are dividends automatically invested along with any additional purchases made after the dividend date or is it a case that the dividends build up separately in the background until they reach the value of 1 share and then a share is purchased for you. Thanks

[@malone_financial]

Hey there! Any passive income earned by accumulating funds will automatically be used to repurchase more shares of the companies which the fund owns. This in turn leads to the fund owning more assets which in turn increases the value of your shares. I’d assume every fund is different with regards to when the dividends are reinvested and into which companies they are invested (proportionally speaking).

[@ElDragoIE]

Given higher CGT and the 8 year DD rule on ETFs, what is the advantage for an irish person to invest in these over investment trust, which are only subject to 33% tax and no DD nonsense?

[@malone_financial]

Investment trust is certainly an option if you can find one that gives you exposure to the assets which you want exposure to at a reasonable cost! When looking at investment trusts I'd be interested in a) investment options and b) fees and charges. Paschal did say in Budget 2023 speech that a committee is being formed to look at the taxation of investment funds so I wouldn't be surprised if change is on the way. Imo ETFs are still the best investment option for average Irish investors for a multitude of reasons!

[@ElDragoIE]

@@malone_financial thanks Dan!

[@mcd6game]

Thank you for making these videos. I have a question, If I start today investing in ETF's a fixed sum every month, that means starting eight years from now every year I have to look at how much I made on the stocks I bought 8 years ago and pay tax on that. and that keeps happening every year coz every year some stocks will have their 8 years completed. Is there any way of doing this less frequently. This seems like a massive headache. Also, do you know what happens if I move somewhere else in europe in these eight years (I am buying etfs on degiro) ?

[@louisacarroll1062]

Thanks for the interesting content. These ETF’s are listed on various stock exchanges around Europe. Does it make much difference, which ones you buy?

[@malone_financial]

Thanks Louisa, I normally just go for ETFs listed on XET. Always liked to have my investments quoted in Euros

[@jonnywalker5361]

Hi Dan, would you still recommend these ETFs on reflection after a year since posting this?

[@SeulgiLee-n1c]

Hi Dan, thank you very much for the video. It's so informative, and you explain very well. I have a question; I'm planning to buy funds: 1) S&P 500, 2) European, and 3) Emerging markets. Although I'm not sure what would be the ideal allocation to each fund. Would 4:4:2 be good, or 5:4:1? These are my random guesses, but do you have a better idea? Another question is, as you say in some of your other videos, it's better to use multiple brokers. I'm thinking of using Degiro, Trading Republic, and T212. Would it be better to buy one fund in one broker? For example, S&P 500 bought in Degiro, European fund bought in Trading Republic, and Emerging fund bought in T212? Or would it be wiser to buy, if possible, all three funds in each of the three brokers? I hope these questions make sense to you! Thank you.

[@malone_financial]

Watch my more recent video “how I’d invest my first €100 as a European investor”. That will answer these questions

[@SeulgiLee-n1c]

Thanks! I thought i had watched that video but obviously didnt watch it carefully. Thanks a mill!

[@ciangormley7299]

Great video! Curious to see do you offer mentorship to people learning to invest in ETFs? I have a few questions regarding living in another country but born in Ireland.

[@michaelcourtney8625]

perhaps a daft question here, i invest in an etf and one of the companies they invest in is amazon, is it worth my while to also invest separately in amazon (just using amazon as an example)

[@davegardner5246]

Hello mate, you’re doing fantastic work. I have a question. Are you better off splitting your investments over 3 index funds or investing all in 1? I ask this as obviously the more you put in 1 the more interest you’ll earn accumulatively, but obviously this carries more risk as it’s not spread. Cheers and keep up the great work!

[@davegardner5246]

I get what you’re saying about having total control in the markets that you invest in. At the end of the day you’re a financial expert and you know what you’re doing. For a simpleton like me a world index fund is easier and the more I put in the more it generates, as far as I understand.

[@magicpants3822]

I was pondering my decisions regarding my ETF choices which closely resembles yours - however my funds distribute the dividends. I mostly chose these as it is part of Degiro's core selection and thus no Commission is payable. In Ireland, will this make a big difference in the long-term ?

[@malone_financial]

I haven’t done the calculations but I think it would be safe to say that the 41% tax saved on not having dividends distributed will outweigh the ~€2 transaction cost of the accumulating ETF. That’s of course dependent on your buying and selling habits and how often that fee is being paid

[@seamusmurphy9415]

Great content as usual I’ve gone with your first S&P 500 wanted to know how much tax will that be paid on this I’m Irish resident .thank you again

[@luckyone525]

It's a good portfolio, i have learned a lot from you and your chanel comment section,thank you! I'm an expat in ireland , coming from Croatia, and now that i am here and in position to invest, i also found out that in my home country you don't need to pay tax if you hold it for 2 or more years, irony 🙄Thank you for your hard work!

[@malone_financial]

Glad you're enjoying the content!

[@jamesryan3216]

Thanks for more great content as always Malone 👍 I recently bought the 'Invesco S&P 500 UCITS ETF EUR Hdg Acc' ETF on Degiro which has an annual charge of 0.05% vs 0.2% for the equivalent iShares ETF. I can't really see any other meaningful difference between these two ETFs. Do you think there are any major downsides to the cheaper Invesco option?

[@malone_financial]

Cheers James, appreciate the support. I just had a look at that ETF there and I think you’re misreading the costs. The ongoing charge is indeed 0.05%. However, if you look in the fact sheet you’ll see there’s another cost classification called ‘total cost’ which is actually 0.35%. This is the true cost of the ETF. The fee of 0.05% doesn’t account for the cost of swap contracts which this particular ETF uses to mirror the S&Ps returns. Let me know if you’ve any questions on that

[@jamesryan3216]

@@malone_financial great thanks a mil 👍

[@pet_cow_5452]

Nice one. Thanks Malone!!

[@malone_financial]

No problem! Thanks for watching

[@dylanobyrne8534]

Hey Dan! The deemed disposal rule has turned me off investing in index funds for the longest time. If I invest a certain % of my wage each month into an index fund the thoughts of paying tax every month after 8 years sounds like a nightmare, what strategy would you suggest in terms of investing in an s&p500 etf to avoid this headache?

[@malone_financial]

Hey Dylan, income tax returns in Ireland are due by the 31st October in the year following the year in which the income was earned (i.e. income earned in 2022 will be due for tax filing and payment by October 2023). Point being, you're not expected to pay tax 'every month'. All of the deemed disposals that arise in a given year can simply be accounted for in one singular tax return. Or, if you really can't be bothered, just pay the €100 fee to get someone to do it for you. Simple!

[@dylanobyrne8534]

@@malone_financial Oh right I see that doesn’t seem so bad then, so say I started investing x amount on the first day of each month starting in February of this year, how would year 8 look in terms of paying the tax? Would I simply be paying any tax due from February - October 2031 in October 2031 and then I wouldn’t have to pay tax again until October 2032?

[@tedyboy41]

With tax at 41 per cent isnit not better to buy Berkshire Hathaway shares?

[@LaCurran88]

yes it is imo and Blackrock stock. 100% is. Both are stocks and CGT apply.

[@vai.junior]

Why do you say you chose ishares vs vanguard because of the tax reasons?

[@malone_financial]

Hey Vaidas! Good question. By that I mean, it wouldn’t be worthwhile selling my investments now (and having to account for tax) all for a total expense ratio saving of .02%. I’m willing to live with the slightly higher expense ratio until such a time that it makes most sense to swap over. In the meantime, I could simply start building a position in the Vanguard fund if I wanted to and swap the iShares money over later.

[@vai.junior]

@@malone_financial In my opinion Ireland is one of the worst countries to invest in ETF as you have 8 year "deemed" disposal rule and you will be forced to pay 41% tax on your gains. I am not sure there is a way to avoid that... UK has much better investment rules VS Ireland especially that they allow HUGE amount of untaxable income from investments per year.

[@malone_financial]

@@vai.junior What you're not considering though is that Irish ETFs are exempt from tax on the profits which they earn for their shareholders. So what you have, in effect, is a company that never has to pay tax in its profits. You, the shareholder, have to account for gains tax every 8 years to ensure that Revenue collect some amount of tax from the investment. But consider if you invested in a company. That company would pay tax a) on its profits and b) on any dividends it paid to you (EVERY YEAR). Irish ETFs essentially skip taxes a) and b). That's what many people don't realize!

[@vai.junior]

@@malone_financial That's true but for companies I own I have personal holing company which receives dividends and not me (post corporation tax). I pay 0% tax as I don't cash out that money. :) With ETF you are forced to cash out :/

[@Mai-hb8ij]

Hi Dan…thanks for this video. Really appreciate the info especially where etf’s are concerned. I have 2 questions if that’s ok… 1. I purchased an ishares all world euro hedged acc etf but the annual fee is 0.55%….is this too high in your opinion? 2. How much of one’s capital is guaranteed on Degiro ? I couldn’t find a clear answer to this. Thanks again!

[@malone_financial]

Hey, no problem happy to help! 1. Totally depends on whether or not there’s an alternative fund available for a cheaper TER. Did you research multiple funds? 0.55% is quite high for an ETF these days. But if that’s the cost of a Euro hedged share class there’s not much you can do (except for swapping to non-hedged). Alternatively, you could consider ditching the all world and just go for a hedged S&P fund like me. All World’s tend to be heavily weighted towards S&P companies anyway. 2. Assuming you’re using a cash account with flatexDEGIRO Bank, your uninvested money is covered up to €100,000 under the German DGS. If you’re talking about insolvency and assets not being returned, that’s covered up to 90% of the value of unreturned assets (subject to a maximum of €20,000)

[@Mai-hb8ij]

Thanks for clearing that up…I will never have more than 100k of uninvested funds on any platform for sure!!😅 As far as the etf I have invested in I will probably sell it once the 8 years are up and in the meantime look into the S&P etf’s you mentioned. Cheers!

[@bilbobaggins3567]

20k isn’t much, would you recommend investing anything over 20k in other brokers like IBKR for instance?

[@mydbs1989]

Hi Dan. Great videos. I've no training in finance so this is a genuine (and perhaps nonsensical or irrelevant) question. How likely is it that the S&P 500 would go up (e.g., 10%) whilst the value of the dollar would go down (e.g., 10%)? Given the S&P 500 represents 80% of the US stock market, would the S&P500 and US dollar not be highly correlated? Thanks.

[@malone_financial]

Hey Seamus! Not a nonsensical question at all, no such thing around here! Research indicates that about 40% of the time, the S&P 500 goes up when the dollar goes up. However it’s important to understand what makes a currency more valuable. It’s either a results of a) more demand for that currency or b) a limited supply of that currency (higher interest rates). So it’s not really an exact cause and effect between the S&P and the USD (I.e the value of the currency is impacted by factors that are separate to the performance of the companies within the S&P 500). For that reason, I choose to hedge the risk

[@mydbs1989]

@@malone_financial Thanks very much for the explanation Dan. That makes sense.

[@jamesdonohoe8233]

What split would you apply to the 3 funds? 70/20/10?

[@malone_financial]

Personally I've been leaning more into S&P 500 - but will likely restart my EU/EM allocations when I feel the time is right

[@nyro1994]

Unreal video once again.

[@williamcricket7931]

Sometimes i hear phone instead of fund, good video nonetheless.

[@quadriceps8831]

let's say I need money to survive but have savings in an index fund can I sell part of it let's say 10% to get cash or I'm going to lose due to fees ,taxes etc, or it's just better to keep some cash in the bank and wait at least 5 years before I'd sell some of it and get cash ???!?! Hate to keep losing money value due to current inflation it's soul breaking

[@quadriceps8831]

I'm extremely cheap/minimalistic and want to have some savings for at least a year if tough times hit I don't want end up homeless again

[@DjVojto]

Just we t for spyi, wish luck.

[@allpassarchery4505]

I appreciate the content but don’t like the title. No need for big claims. Remember What Warren Buffet said about the secret behind a long marriage😂

[@osamakhan6581]

You’re a decent chap, and I like your content, but can you please stop doing these ridiculous thumbnail images? Makes perfectly reasonable videos look like clickbait trash.

[@malone_financial]

Hey Osama 👋 thanks for the feedback. I appreciate that thumbnails can be a point of contention, especially within the finance community. I’ll take that on board for future videos. If I may explain my rationale here. The image in the thumbnail is an extract from a compound interest calculator assuming a 40 year time horizon and a 10% annual return. The monthly contributions were set at $1k to try and average out the amount contributed over 40 years. The purpose of the image was to highlight the power of compound interest through long-term investing (via index funds). I accept that the colourful background and expression might not be to your tasting. But try to understand that, as a smaller channel, having colourful thumbnails that stand out against other videos is essential. Regardless, I appreciate you taking the time to give honest feedback.

[@osamakhan6581]

I understand and appreciate the detailed reply. I guess we have to learn to live with YT’s ranking algorithms.