September Is “My Month” To Invest With Vanguard…Should I Wait For The Dividend Payment?

So, September is “my month” to buy Vanguard VWRL stocks. I know dividend will be paid at the end of this month. Should I wait for the dividend payment and automatically reinvest that, or should I invest the money now (and receive more dividend?).

Love,

Mrs EconoWiser

P.s. #pregnant #tired #hungry #fat … #BLESSED <3<3<3

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19 thoughts on “September Is “My Month” To Invest With Vanguard…Should I Wait For The Dividend Payment?

    1. econowiser Post author

      Haha! Each quarter my Vanguard VWRL pays dividend. This is done automatically. First I will get a notification in my overview stating that a certain amount will come my way. And then a couple of days later it is added to my account. Mind you, not all ETFs pay dividend on a quarterly basis. And sometimes they don’t pay dividend at all, because they automatically reinvest. (Mutual funds) So, check the fact sheets of the ETF of your choice. It will also state how much (in percentages) dividend has been paid in the past. This is the wonderful compound interest secret all the early retired bloggers are talking about! Woohooh!

      Reply
      1. econowiser Post author

        Wootwoot! Indeed! €0.25 per share VWRL! It’s the amount awarded, and will be paid out on the 26th. So then it is actually added to your outstanding capital.

  1. a Mustachian

    Let’s say you were planning to invest € 1,000 in September and a € 100 dividend will be paid out on 1 October. You like compounding, so you want to reinvest the dividend, which would mean waiting till October. But you also know that it’s generally better to put your money in the stock market sooner rather than later, because the more time in the market, the higher the returns generally are.

    Why not invest € 1,100 now by taking the extra € 100 from your emergency fund? Once you’ve received the actual dividend, you can put it into your emergency fund to get that back to its proper size. Your emergency fund will be short € 100 for a week or two, but it’s extremely unlikely you will have to call upon virtually your whole emergency fund during such a short period.

    Reply
    1. econowiser Post author

      Ja, ik ben weer aan het werk voor drie dagen per week. Dat gaat op zich wel goed, alleen ben ik weer erg moe ivm met de tweede zwangerschap. Dat had ik ze ook maar gelijk verteld…medewerker van ‘t jaar word ik niet, denk ik 😉 Maar ik merk dat het wel goed is om weer uit mijn coconnetje te zijn en mijn hersens weer wat te laten doen. Ik merk ook dat ik onbelangrijke dingen nu veel beter van me af kan laten glijden. Ik doe gewoon netjes mijn werk waar ik goed in ben en ruim geen shit van anderen meer op. Werkt prima!

      Reply
  2. Wanja

    Dear Mrs. Econowiser,

    For some time I have been reading your blog with sheer interest and I absolutely love all the content and research you have done. I am about to graduate university and have spent the last couple of weeks looking for the best possible fund to start with index investing here in Belgium.

    The Vanguard FTSE All-World UCITS ETF (VWRL) is indeed my preferred choice because it has a wide diversification (2.942 companies) and a low TER (0.25) and because the company is here to stay. Unfortunately the fund is distributing its dividends and here in Belgium I have to pay 25% witholding tax on dividends (in the Netherlands it is 15% I think).

    As much as I like this Vanguard fund, I am still considering the iShares Core MSCI World UCITS ETF (IWDA). The fund has a lower, yet still substantial diversification (1.612 companies) and a slightly lower TER (0.20) and it reinvests the dividends automatically making it unnecessary to pay witholding tax on it.

    In this article (http://www.messagent.alex.nl/optiext/optiextension.dll?ID=s8rrsWgKaSjVIZueOgcRMiuYh1M9Py%2B2dyr8st) a nice comparison between those two funds is made; It is clear that the Vanguard fund is the best option. Unfortunately I don’t think that the witholding tax is taken into account in this analysis.

    So here’s my question. What is the weight of the witholding tax on the dividends compared to the total price tag of the Vanguard fund? Will the Vanguard fund after tax still be favorable compared to the one of iShares?

    Kind regards,
    Wanja

    Reply
      1. econowiser Post author

        You’d have to investigate how well these funds have performed compared to each other if they’re following the same tracker. Such as
        https://econowiser.wordpress.com/2013/11/29/1139/
        Since Vanguard is a cooperation I trust that more will flow back towards investors, whereas a company like iShares is about making a lot of profit for themselves and their staff as well.
        As I am not a professional advisor, I can’t tell you which one you should buy…

  3. Quang Nguyen

    Hallo!

    Echt een leuke blog over index beleggen heb je, weinig verwarrend jargon zoals veel andere sites over beleggen. Zelf beleg ik ook met Vanguard ETF’s die in Ierland zijn gevestigd maar nu heb ik een vraagje over het aangifte van dividendbelasting in Nederland.

    Als voorbeeld:
    Apple keert 100 dollar dividend uit, daarover wordt 15% dividendbelasting betaalt voordat de Ierse Vanguard ETF het ontvangt. Dus de Vanguard ETF heeft dus 85 dollar die wordt uitgekeerd aan mij omdat Ierland zelf 0% bronbelasting inhoudt. Moet ik in Nederland daarover nog eens dividendbelasting betalen? Of valt deze 85 dollar gewoon in Box 3 van de belastingaangifte en hoef ik me geen zorgen te maken dat er nog een dividendbelasting betaalt moet worden.

    Ik begrijp dat de overige 15 dollar onder de dividendlekkage categorie valt en dat ik die dus niet kan terugvragen. Maarja, hopelijk kan je mijn vraag beantwoorden 🙂

    Reply

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