5-Bullet Sunday

5-Bullet Sunday #63

Dividend Investing Europe

Can you believe this? It’s already 14 March and before we know it we will already be reviewing our first quarter results. It’s crazy how quick time is passing by!

Hence, it’s also really important to keep dollar cost averaging into the market. I haven’t pulled the trigger yet this month, but I hope to do it anytime soon for one of the companies on my watchlist.

It’s for me more important to invest all my monthly savings in the given month than trying to time the market. Consistency matters and the power of compounding is what’s fueling my portfolio the most.

But don’t worry, I got you covered 😉

I will keep on pushing out content based on my learnings and I will keep sharing my journey via this blog to inspire you in your own journey of dividend investing.

Enjoy today’s 5-Bullet Sunday 👍


Content created this week:


5-Bullet Sunday is a weekly blog post with 5 topics that were on my mind this week related to Financial Independence and Dividend Growth Investing or something that just fed my curiosity. An overview of earlier posts can be found here

🌟 I’m starting to claim back dividend taxes from abroad

Finally I started the process of reclaiming dividend taxes that were withheld from abroad. It is a process that I still need to gain some further experience with and I promised earlier to document my journey via this blog. I will do this in full transparency by sharing any learnings I may encounter, but without sharing any personal data.

Hence, I wanted to let you know that I started this week with filling in the tax form from Germany. I’m reclaiming my dividend tax from the last 4 years and this is in line with the German regulations:

German Dividend Withholding Tax reclaim period

I’m fine with doing this every 4 years, because the amount of money is not that large yet.

Having said that, I have populated the tax form and I learned that I will be eligible to get ~140 Euro back from the German tax office. I read that it can take up to several months after receival of my form to get the money deposited on my account.

However, I was a bit surprised that I also need to go to the local tax office to collect a stamp and a signature. Effectively the German Tax office wants to ensure that I’m a resident in Poland and at the same time they want to ensure that the foreign tax office is aware of my dividend income from Germany.

So this is what I will do this week: pay a visit to my local tax office. I honestly have no clue to which counter I should go and what the policies are for visiting the tax office during this Covid-19 outbreak. I will do some more research on this tonight.

That’s it for now regarding reclaiming German dividend tax. I will publish a step-by-step guide once I have completed the process and received the money on my account. So stay tuned, but don’t hold your breath!


Other countries I will try to claim back tax from are France, Spain and Switzerland.

🌟 Dividends Received this week

The 2nd week of March is one of those weeks where I’m getting a significant amount of dividends. This week I received dividends from:

CompanyPay-dateGross AmountTaxNet Amount
Johnson & Johnson9-Mar-2021$45.45$6.82$38.63
Novartis9-Mar-2021CHF 69.00CHF 24.15CHF 44.85
ExxonMobil10-Mar-2021$130.50$19.58$110.92
Chevron10-Mar-2021$27.09$4.06$23.03
Microsoft11-Mar-2021$33.60$5.04$28.56

This is about 208 Euro in net dividend income in a single week. It will probably make up around half of the total dividends that I will receive in March.

How about you? Are you also receiving more dividends than normal in this week?


PS: I live in Poland and we have a 19% dividend withholding tax rate. Hence, I will still need to pay an additional 4% in tax over these dividends around this time next year.

🌟 Chart of the week

This week’s chart is one that I wanted to share already a bit earlier and it’s a very interesting overview from my buddy Dividend Wave. He shared the following insight with us on Twitter which shows that ARK investment fund is also investing in Dividend Growth Stocks.

To his point, it shows that growth investing is not mutually exclusive from dividend growth investing. Actually, I believe that Microsoft and Apple are two other great examples of companies that are popular by growth investors while they are also having great dividend growth track records.

Discl: I own both $MSFT and $AAPL

🌟 Recommended Read

I really enjoyed reading an article from the Financial Times about the rise of the retail army: amateur traders transforming the markets. I will not do all the spoiler alerts for you, but I just want to share 2 items with you to explain why I think this article is a must read.

Firstly, it points out that market knowledge is not needed to make an impact. A large group of investors can do this nevertheless when it’s already enthusiastic enough.

Secondly, the below graph shows that the impact of retail investors is serious. Often we hear that it’s all about the money flow from institutional investors, but the below picture shows that retail investors are already at a decade high of 25%.

Line chart of Market share of overall US equity trading volumes (%) showing Retail trading now accounts for almost as much volume as mutual funds and hedge funds combined

If you find this topic just as intriguing as I do, then I definitely would recommend to grab a coffee and read this well written piece by the financial times.

🌟 Recommended Video

Climate change is probably one of the biggest challenges ahead of us as a human species. We often focus on the future by thinking about new energy sources and insulating our houses.

But what about the communities that heavily depend on traditional energy sources from an economic point of view? How are we going to balance prosperity vs poverty?

I think we have enough examples in Europe after closing the mines. The region I originate from in the Netherlands is still one of the poorest regions in the country after closing the mines 50 years ago.

In this context I found the below small documentary very interesting. I know that this sounds like a very US specific story, but there’s a reason why Poland is one of the most polluted countries in the winter. Providing prospects to the mining communities is essential to get buy-in to transition into new energy sources.

Don’t forget that those communities also have a huge vote in the elections and this is one of the reasons why it is so hard for Poland to move out of the current situation.

This is also why I would support universal basic income to those communities that are heavily impacted by losing their economic source of income due to climate change.


That’s it for the this week! I hope that you enjoyed this week’s 5-Bullet Sunday 🙏

As always, have a lovely week ahead!

Yours Truly,

European Dividend Growth Investor


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Disclaimer

I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. I’m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.

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It's my desire to retire early via Dividend Growth Investing as a passive income stream. This is not easy and especially when living in Europe. That's why I started this blog and share my journey: to give you a European perspective.

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Libor
Libor
4 months ago

Thanks for your insights regarding the tax from Germany. If I understand it correctly, the 4 years start to count from the year you got your first dividend? Eg. first dividend received in 6/2020, then the last year you can submit the form to get the tax back is 6/2024? And then repeat the same procedure every 4 years. In your next blog post regarding this topic, could you sum up all the fees you paid to get your request processed. I assume that the tax office is not doing it for free. If the fees are not that high… Read more »

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