Dreaming of Early Retirement

[Dutchdreamer]

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[sky]

Welcome

The key will be to continue to live as a poor student while saving money. You are doing it right.

At the moment, most people are questioning the stock market due to perception that it is at a high level.

Real value in owning equities is the ability to participate in profits through dividends. I would recommend that you start with dividend stocks, if only because their profits can increase with inflation (they increase prices to customers).

Here is a good research tool:

http://www.topyields.nl/Top-dividend-yi ... ocrats.php

Beware of stocks with very high dividends, sometimes it means that they are losing money and will lower dividends soon. Research the companies and learn what the various statistics mean.

You need to get your money working for you. When you start to see the dividends coming in, you will realize how valuable savings can be.

[Chad]

Here are some books to get started investing.

http://earlyretirementextreme.com/wiki/ ... #Investing

There are numerous threads on here listing other books people have read concerning investing.

Concerning stocks being too expensive. There is always something cheap somewhere, but do some reading first.

[Dutchdreamer]

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[DutchGirl]

Also, Dutchdreamer, some advice for people living in the US is not suitable for people living in the Netherlands. For example, in the US you pay taxes on capital gains. In short, when you sell your stocks, or bonds, or other investments, THEN you have to pay the tax man a percentage of how much money you made (selling price minus buying price). And the percentage of taxes that you pay on your gains is lower if you sell after more than a year from buying, and also if your other income for that year is lower, then your percentage is also lower. You can also get money back from your taxes if you sell investments for a loss (tax loss harvesting I think it's called).

This is not true in the Netherlands. As you may know, here in the Netherlands, when you have assets over roughly 23k euros, you pay 1.2% of tax every year on the money that you have over 23k euros. (So if you have 33k euros, you pay 1.2% tax on the 10k euros that you have more than 23k, so in that case 120 euros of "asset tax" or "vermogensbelasting"). It doesn't matter in the Netherlands whether you gained or lost money that year on your assets, all that matter is how much money you had on January 1st...

So in the US you are very much discouraged to sell again within the year; and it's cheaper to sell assets and pay the capital gains tax during a year where you made less money from other income. Some investing strategies in the US work with that. However, in the Netherlands, those strategies won't make you more money...

Personally I've gained a lot of information on investing in the Netherlands from books from the public library. I don't know where you live, but maybe you also have a bigger public library closeby (in a big city), and those are pretty sure to have books on investing (and on personal finance). Just spend an afternoon in there, I would say. You don't have to be a member to be allowed inside and to read books while there (generally speaking).

I want to add that in the last five years or so several cheap online brokers have started to offer their services in the Netherlands. If you want to start investing, please look at these online brokers because generally speaking, your bank will be more expensive for investing... Just compare the costs, of course!! Companies that come to my mind: brandnewday.nl ; meesman.nl ; binck.nl, alex.nl . There's a website comparing them: http://www.brokertarieven.nl/ , but of course also make your own comparisons!!!

[Dutchdreamer]

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[Quadalupe]

Good advice DutchGirl! Keep in mind though that it's likely that the government will change the current system to a system more akin to the US system. See for example https://fd.nl/economie-politiek/1100957 ... p-de-schop.

Also, Dutchdreamer, do you have more concrete goals for in the near future? It seems your long-term goal, buying a house mortage-free is still a long way of. It might be motivating for yourself to setup smaller goals to achieve. These goals of course don't have to be money based, but can also have to do with skills in different areas.

[Dutchdreamer]

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[Dutchdreamer]

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