Yay, the hubby is slowly but surely “getting it” 😉
He proposed to increase our monthly investments by 66%. Wootwoot! I’d still rather go for lump sum…but as explained many times…it’s our money and not just mine. This way we’ll actually start investing our lazy euros sitting in savings accounts. We’ll start as of next month. Yay!
We decided to dump all that extra money into Vanguard All World (VWRL) with BinckBank.
Love,
Mrs Econowiser
EconoWiser 
O wow thats quite an increase! Congratulations!
If it may help, i created a calculator that advices to invest lumpsum per year or month or quarter, based on expected returns and transaction costs.
http://indexample.com/2014/11/regular-investment-optimalisation/
Keep ploughing through!
Hi Indexample, thanks! That’s an impressive website you made. According to your calculators we should stick to monthly 😉 Are you a fellow Dutch Mustachian?
Hi Econowiser! thank you, still very much in progress 🙂
Im not a DMMM but i guess i follow the same principles. Thank you for creating some high quality posts on the decisions you made, especially regarding vanguard and binck. They helped me a lot starting out on this adventure.
Great to hear my efforts at finding this stuff out have helped someone else. There really is too little information about index investing available in Dutch….
Hi Indexample, like your website and calculations. Regarding your goal (4% withdrawal rate), you seem to be forgetting the Dutch wealth tax (box 3) of 1,2%. I think as a Dutch investor(living in Holland) you would probably have to adjust the withdrawal rate to a lower number.
Hi Anonymous,
the 1.2% dutch wealth tax is a hungry beast that will eat first. I included it in the goal calculation because i worked with 6.5% instead of 8%.
more info here on why i chose 6.5%
http://indexample.com/2014/10/how-much-growth-can-i-expect-with-index-investing/
Still, its hard to predict how the tax system will be in 20 years time. Also, im not sure if i want to keep my portfolio to live forever, even after my time has passed. If im willing to die just as wealthy as when I was born, I could easily withdraw 6 or 7% for 30 years.
You’re so right. I’m even more conservative and work with 6%…
Thanks for making that calculator. It should be very useful! I’ve been wondering what investing frequency would be optimal so your calculator really is just what I was looking for.
A small request, if I may? Could you add a minimum and maximum cap to the transaction costs? With Binck Basic I pay a transaction fee of between 10 and 150 euros (not yet supported in your calculator), made up of 6.50 euros + 0.10% (already supported).
Also, if I generate a table, the quarterly column is halfway out of view and the annual column is completely obscured. I’m using Firefox.
I’m planning to start investing in Vanguard too: is Binckbank the best option fus us in NL? And which Binckbank option is the best for doing this: fundcoach, basic or active?
You can easily compare the tariffs of the brokers on their websites. Binck is allright, Lynx for example is a bit cheaper. Disadvantage of active and fundcoach are that they charge a service fee (which you could add to the TER of your funds). What I see as a disadvantage of Lynx is that their parent company is not Dutch (Interactive Brokers) and their custodian isn’t either. This means that it might be more of a struggle to retrieve your funds when IB goes bankrupt.
For a complete view, also take into account how often you will make transactions and how big they will be. With large investments, the difference in transaction fees will not be significant.
The fact that BinckBank has a Dutch custodian is why we decided to invest through them. We just don’t want to take any risks as we’d like to keep our portfolio for the next fifty years or so. That’s also why we don’t invest via DeGiro as they lend your portfolio to third parties while you are completely responsible if that party doesn’t pay up.
As we invest a large sum of money every month the difference in transaction fees between BinckBank and Lynx (yes, they’re a bit cheaper…but not worth the risk for us) is negligible.
I don’t like Fundcoach as they charge 0.15% fee a year. However, it might be interesting if you’re investing with smaller sums like a couple of hundred a month. However, in that case you should also check out Meesman. Ideal for small portfolio purchases.
Basic is the one to go with if you want to invest larger sums of money on a monthly, quarterly or annual basis. Each transaction will cost you at least €10. I think this option starts getting interesting for investors throwing in €1500+ or so per transaction.
Active is not for index investors. It’s for active investors who think they can beat the market…which all of us passive investors know they can’t and it will bite their asses over and over and over and over……again.
great advice, i concur completely.
the €10 or $14 per transaction is a bit steep at binck, but at least you dont pay any more fees for the next decades. per 1000, thats about 1%. So, after about 6 years (6 x 0.15%) you are better off using Basic.
Especiallly when the figures go up. I wouldn’t want to pay an annual 0.15% fee when our portfolio reaches a couple of hundred thouasand. I don’t get which “service” they provide that’s worth the money.
Glad to hear the two of you reached a compromise on how much to invest per month. I hope you have many more compromises to look forward to together!
Thanks, I’m really happy about it as well!
Hey Mrs EconoWiser,
Congrats on the investment increase, 66% – amaing.
Recently discovered this top-tastic blog; Thank you for putting our this great information.
I am from Scotland and now living in Amsterdam.. I’m just about to turn 35 and decided to get serious with investing for the future. Low cost Index funds are the way I want to go; my biggest challenge is finding an NL Broker; I struggle as the information is in Dutch.
I would be sincerely grateful if you can point me in the right direction.
> Identify a cost efective broker; ideally euro hedged where I can make monthly transfers for automatic investment and with minimal/zero dividend leakage. I’m specifically looking at VG (i.e. S&P 500 Index)
An alternative, I have found is Brand New Day Lifecycle Fund; would love to hear your thoughts on this one.
I can appreciate that you’re busy and no problem if you don’t have time to come back to me.
All the best and keep on doing the good stuff :o)
On the struggling with Dutch front, the best thing you can do in the long term is to keep practising until you no longer struggle. Luckily Dutch and English belong to the same language family so you have a head start on most foreign learners of Dutch. I don’t know about you, but back when I was first learning English I always got a happy buzz out of cognates like ship/schip, zee/sea, melk/milk and koe/cow. They gave me the feeling I already knew half the language, which wasn’t that far from the truth.
That’s probably not what you were hoping to hear though. In the short term, you can probably find some sort of browser plugin that auto-translates any Dutch websites you visit. Such a plugin can do an OKish job so you at least get the gist of the website’s content.
I assume you would like to invest in pounds? I haven’t examined any other brokers but I just found that Binck Basic (since we’re having a Binck lovefest here anyway) lets you trade ETFs in London. There are currently four (FTSE 100, FTSE Emerging Markets, S&P500, UK Gvt bonds) on the site. I’m reliably informed that Binck will add other options to the overview upon request by e-mail. If you’re looking to invest automatically every month then Binck Fundcoach and Meesman would be options to look into.
I hope this helps.
a Mustachian – thank you for the feedback. Just got myself enrolled in a Dutch class !.
I want to invest in Euro as I plan to be here in Amsterdam for the foreseeable future.
Today I have requested the information to setup with Binck Fundcoach.
Some years back I setup some mutual fund investments (I know, my bad); these funds primarily target Europe and the developing world. I would like to balance out, by investing in the US stock market; i.e VG 500 Index – logically, I wish to minimise my costs, maintenance and taxes. I’m trying to work out how to do this via a Dutch broker that facilitates automatic investment. If you have some tips would be most grateful :o)
You’re welcome, and congratulations on enrolling in a class. The first step is the hardest.
I gather that you regret your earlier mutual fund investments. Can you sell them so you can start with a clean slate? That might make things easier. Out of the options for investing a fixed monthly sum that I’m aware of, only one has a specifically US equity offering, i.e. Binck Fundcoach. Thanks for bringing up BND. I hadn’t looked into them yet.
A comparison of what you pay for an ETF/index fund tracking all developed markets:
Brand New Day: 0.50% entry charge, 0.59% TER (Vanguard Global Stock Index Fund (euro-hedged) wrapped up in BND Wereld Indexfonds)
Meesman: €25 fixed annual fee, 0.25% entry/switch/exit fee, 0.50% TER (Northern Trust World Equity index Fund wrapped up in Meesman Indexfonds Aandelen Wereldwijd)
Binck Fundcoach: 0.15% variable annual fee (capped at €60-200), 0.18% TER (Vanguard FTSE Developed World UCITS ETF)
You should probably verify I got my numbers right. It looks like any of them could be a viable option, depending on how much money you have to invest and whether you need to rebalance between bonds and equity. Brand New Day is unique in letting you do that for free, but on the downside it has the highest TER.
You might like to check out brokertarieven.nl to see what else is out there in terms of Dutch brokers. Binck gets talked about a lot here but isn’t the only option.
a Mustachian, thank you for taking the time to show the comparison. I am sincerely grateful :o)
I’m gravitating towards the BND Lifecycle Fund, yeah the TER is higher, in contrast the maintenance is minimal and the rebalancing is free of charge.
I would love to cash out my mutual funds, although I have a dilemma. Some of the ‘initial’ units within my funds are locked in until maturity. Should I surrender the policy, I would lose 60% of the value; on the other-hand I calculated I am paying more that 2000euro per year in fees ! This was a mistake born of ignorance.
Ouch! If you’re bleeding €2,000/year then the 60% penalty might actually not be that bad. I’d run the maths to see which is the lesser evil.
Wow, I totally agree with a Mustachian! Run the numbers asap…I wouldn’t be surprised if cashing them now would be the more interesting option. Jeez, 2.000 euros a year! For a gazillion portfolio that would be in the sphere of reasonable…
Speaking of monthly investments, Meesman just announced they are revising their cost structure with effect from 1 January 2015:
http://www.meesman.nl/k/n90/news/view/5628/2701/meesman-indexbeleggen-vereenvoudigt-de-beleggingskosten-verder.html
http://www.meesman.nl/kosten
The removal of the flat €25 fee might just be enough to make me open an account. It was the main thing keeping me from using Meesman for small monthly investments. Transaction costs of putting €100 to work in the market: €0.25 with Meesman, €10 with Binck. I’d still have Binck for transactions in the thousands of euros when and if I have that sort of money available.
In related news, the TER of the emerging market equity fund was lowered from 0.65% to 0.5% (yay!) and the TER of the European bond fund was raised from 0.3% to 0.5% (boo!). I cannot see myself investing in a bond fund with such a high TER.
Yeah, for smaller amounts this is perfect! I think they’ll gain many customers with this decision!
I don’t get the increase in bonds either…but the new rate for emerging markets is great!
Thank you for the tips. I decided to take the hit and cash-out the Mutual Funds. In order to simplify as much as possible. I have opted for Brand New Day with the Lifecycle Investment Option. – I’ll park this and let it grow, no stress :o)
Woohoooh!!! Way the go!!!
I just read that Meesman reduced their annual service fee from €25,- a year to € 0,- ! Transactioncosts will remain 0,25%. This means that investing periodically with smaller amounts of money (say below € 4333,-) will be cheaper than Binck.
(Above around € 4333,- Binck will be cheaper because of their € 6,50 + 0,10% structure)
The annual Meesman costs stopped me from opening an account there, but I`m definitely going to open one in January.
Yep, indeed! I just know they’re going to attract soooooooo many more new investors now!!! It was the right thing for them to cut the annual service fee. I’m so happy index investing is gaining more popularity here in The Netherlands!