Die hiesige Aktienkultur hat zuletzt einen merklichen Aufschwung erlebt.
Damit dieser Trend jedoch keine Eintagsfliege bleibt, habe ich mich zum Start einer neuen Interviewserie entschieden.
In dieser berichten bekannte und weniger bekannte Aktionäre über ihre Motivation, Geld an der Börse anzulegen.
Diesmal habe ich mit dem European Dividend Growth Investor meinen ersten internationalen Interviewpartner zu Gast, mit dem mich nicht nur eine jahrelange Twitter-Freundschaft verbindet, sondern den ich dieses Jahr auch schon also Gastautor bei mir am Blog begrüßen durfte.
Herausgekommen ist mein erstes englischsprachige Interview.
Viel Spaß also beim nächsten Aktienplausch auf Jung in Rente!
Mein Aktienplausch mit dem European Dividend Growth Investor
European Dividend Growth Investor is trying to achieve financial freedom in the next 6 years. It won’t be easy, but he’s committed to do so. At the same, time it’s his mission to make dividend investing easy and to empower European investors to take matters in their own hands. He openly shares his experiences via his blog, YouTube and as a co-host of the Dividend Talk podcast.
European DGI, you are a Dutch, who grew up near the German border, and now living in Poland. Why are investment mentalities between those 3 neighboring European countries so different in your opinion?
I think this has to do a lot with the local cultures.
As an example, I noticed a lot of differences between the Netherlands and Poland when it comes to TV commercials.
For instance, in the Netherlands you will typically see a lot of ads about insurances and saving accounts. I guess that Dutch people feel really secure when they have insured themselves against anything that can go wrong. I was one of them!
In Poland on the other hand, TV ads are dominated right now by all kinds of medicine against sneezing and such. People rather protect themselves from getting sick rather than insure themself against being sick.
I know for instance that many Polish people travel abroad without any additional medical insurance. I can’t remember having heard this from Dutch people.
Back to investing, and generally speaking, in the Netherlands there is a very strong saving culture and you will naturally see a lot of resistance towards investing, because “you might lose your money”.
I heard and still hear this so often, even from direct family members. People rather put all their money in their house and then paydown debt or prefer to have the money in their bank account.
There is little notion about inflation making your money worth less via a savings account or opportunity costs when paying down debt vs investing. And if there is any notion, then most often the government gets blamed. Personal accountability and taking matters in your own hand is not the first response.
Though, over the last few years more and more people seem to find their ways to the stock market.
In Poland on the other hand, you see a lot of interest in forex trading (i.e. CFD’s). I guess it comes from the times when it was popular to have German Marks or US Dollars over the Polish Zloty.
There’s generally little trust in Polish assets while at the same time I notice that investors in both the Netherlands and Poland have a strong bias towards their own local stock market.
I guess Peter Lynch has been really influential and far-reaching with his “buy-what-you-know” mantra!
But hey, I think this has been enough generalization about Dutch and Polish people and my thoughts should be taken with a grain of salt. I’m not an expert and I have my own personal biases. As an example, someone originating from a Dutch entrepreneurial family might have given you a totally different opinion.
What is your personal incentive to invest in stocks?
There was a certain moment in life, 8 years ago, that I started to have money left at the end of the month. I had enough money left on my savings account and I really felt that I didn’t need more.
At the same time, I saw people around me losing jobs due to restructuring of organizations and some of those people were already over the age of 50. And I can tell you, trying to find a job when you’re older than 50 is really a much tougher problem in the Netherlands.
What I also noticed was that pension funds were not re-indexing the future retirement income aligned with inflation. In other words, if inflation was 2%, you would normally expect your pension fund to re-index with 2% as well so that you won’t lose buying power at your retirement age.
Money left, safety net, broken retirement expectations… You get it!
That’s when I got to the realization that I need to take matters in my own hand and prepare myself for the future.
It effectively triggered my investment mindset from that day forward.
That’s also when I started to read a lot of books and articles and initially, I thought that it would be best to start paying down my mortgage, because with investing I “might lose my money”!
And so, I did.
But after 1 year I started to lean more and more towards giving it a try in the stock market. I noticed that I enjoyed reading personal finance books a lot. Actually, many books were written about the power of compounding and what it can do to your wealth. Just understanding that was mind-blowing to me!
But still, in the beginning I was a bit hesitant and afraid of the stock market.
Until I discovered Jason Fieber’s Dividend Mantra blog. I got really inspired by his investing style of dividend growth investing once I started to follow him.
He was a true inspiration to me and that’s why I finally found the courage in September 2014 to start investing in the stock market myself.
What is it about your passion for Dividend Growth Investing?
Cash is King!
It truly empowers me and allows me to make my own decisions in what to do with that money. Should I reinvest it? Should I use it to cover some expenses?
At the same time, I love the growth component of it.
Remember what I mentioned earlier about inflation and re-indexing of pension funds?
What if you would invest in stocks that pay you a dividend and grow that dividend at an annual rate about the rate of inflation?
That’s really what gives me the dopamine!
It effectively allows me to receive a passive income (salary) from my dividend portfolio including an annual dividend growth (salary increase) which is more than most employees would ever get.
And if you build up a diversified portfolio of blue chip dividend growth stocks, then you’re probably talking about more than a million people waking up every day trying to create more wealth for the company.
That wealth in return will be distributed among its shareholders in dividends.
In other words, isn’t it cool to be able to say that I’ve currently got more than a million people working for me?!?
That’s why I have such a passion for dividend growth investing.
Ah, and of course that one day I should be able to live off the dividends and call myself financially independent before my official government approved retirement age 😉
Whereas most Dividend Growth Investors have a strong preference for US stocks, you are advocating investments in their European counterparts. How did that happen?
Just to be clear, I’m not advocating for investments only in European dividend growth stocks.
What I am advocating for is to have a more diversified portfolio to mitigate for instance currency risk.
I still remember somewhere back in 2009 that a Euro cost 1.60 USD, while currently it trades for around 1.15.
While the difference is compared to 12 years ago, it’s not uncommon for the currencies to fluctuate 10% in a single year.
In my opinion this is quite a foreign currency risk for most investors.
At the same time many European domiciled dividend growth investors are taking a lot of their inspiration from American institutions and bloggers.
That’s why we hear a lot about US dividend stocks in the community.
I personally wanted to bring some balance into that, because we have quite some interesting dividend growth stocks in Europe as well.
These are companies which pay dividends in Swiss Francs, Euros and Pound Sterlings and can significantly decrease your foreign currency risks.
So, to sum it up, avoiding currency risk and some European patriotism made me very passionate about spreading the word and knowledge about European dividend stocks.
PS: If people are interested to see a list of 30 of the best European dividend stocks, then check out the Noble 30 index on my blog.
Which are your favorite sources (books, magazines, blogs, social media channels, etc.) to make well-informed investment decisions?
This is one of those questions that I find very hard to answer. The knowledge which I have accumulated over the years has been very diverse.
As an example, if you are interested in learning about how to analyze stocks then I would definitely recommend taking a financial reporting and accounting course. Either online or via a nearby university. Understanding and learning about the 3 financial statements (income, balance sheet and cash flow) typically lay the foundation for your investing knowledge.
But if we are talking about books, then I have learnt a lot from reading The Snowball* which is a biography about Warren Buffett (900 pages!).
Another book I highly recommend is One Up On Wall Street* by Peter Lynch. He makes investing very relatable for the average person in the street.
But when it comes to making well-informed investment decisions then I must confess that I’m not taking my information from any other blogs and social media channels.
What I do is that I screen for dividend stocks using my dividend stock screener process. After that I would typically pick a company and study their business. I answer questions like, how do they earn their money? What do their products and services look like? Can I form an opinion about the quality of their products?
Based on that I would make the decision to start diving deeper and into the financials of the company by studying their annual and quarterly reports which are available on their investor relations websites.
But in support of that and also to get a perspective on their historical performance, I would typically check their data via Morningstar.com, because that’s where I can find their 10-year performance numbers in a very nice tabular overview.
Based on those sources I’m able to analyze a stock and to make an informed investment decision.
But hey, it’s not only about investment decisions. It’s also a lot about entertainment and fun!
From that point of view there are some very good bloggers out there which I would highly recommend paying a visit. As an example, I enjoy the following three blogs a lot (besides yours off course 😉 ):
- Engineer My Freedom
- My Financial Shape
- De Kleine Kapitalist (in Dutch, but google translate works excellent!)
Last but not least, people tend to enjoy our Dividend Talk podcast a lot. It’s a podcast about dividend growth investing, but then with a European flavor. I would therefore highly recommend your readers Dividend Talk episode 57, the show in which we invited you as a guest.
Do you have any advice for beginners, who are still struggling to invest their money in stocks?
Yes, I would first suggest to follow these first two steps:
1. Pay of all your highest interest-bearing debt (i.e. more than 5% interest).
2. Build a small emergency fund which protects you from any unforeseen events with a financial impact (i.e. job loss, expensive healthcare bill). A good rule of thumb is to have 3 to 6 months of expenses saved.
Unfortunately, the above two points can take several years for some of us. It’s just how life happens sometimes and how financial decisions in the past can influence our future. However, I truly find it necessary to get yourself to a healthy financial situation first.
But once you have done that, then you’re in my opinion ready to start investing. And my advice in that case is:
Just do It!
Or in other words:
If having fear of losing your hard-earned money is preventing you from investing then don’t be afraid. You don’t need to invest all your savings at once. Just invest 100 Euro in the first month and check how you feel about it.
If you feel comfortable with it, then double that amount the next month.
Continue to repeat this until you hit a certain moment that you think: OK, this is enough and I actually can’t invest too much more on a monthly basis. For most people this is the moment when you hit the limit of your monthly savings rate 😉
Just know that most investors have been in your shoes before. We all had to get started one day and most of us felt the fear of our just earned money losing 1 or 2% in a single week.
This fear is normal, like with anything new and unknown that we learn and try out. But we also know from experience that it builds new routines and that we get used to it after a while.
So, to sum it up: just do it, but start small and then slowly build it up at the speed you feel comfortable with.
That’s really all I can advise on.
Thank you so much David for the opportunity to answer some of your questions. I truly hope your readers find it useful and get some inspiration from it. It’s an honor for me to be interviewed by you.
Wenn Euch das Interview mit European Dividend Growth Investor gefallen hat und ihr mehr von ihm erfahren wollt, folgt ihm unbedingt auch auf einem seiner Social Media-Kanäle:
- Blog: europeandgi.com
- Podcast: Dividend Talk
- YouTube: European Dividend Growth Investor
- Twitter: @European_DGI
- Facebook: European Dividend Growth Investor
- Instagram: europeandgi
Aktienplausch mit anderen Aktionären
Dich interessiert, was andere Aktionäre motiviert, ihr Geld an der Börse anzulegen.
Dann wirf gerne auch einen Blick in meine weiteren Interviews:
Jung in Rente im Business Insider
Ab sofort im Business Insider: Mein monatliches Spar-Update.
Danke für deine Aufmerksamkeit und weiterhin viel Erfolg beim Sparen, Investieren und frei sein!
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