You should have a personal budget, right?

One of the most common recommendations for solid financial planning is to have a personal budget in place. It can help you immensely to allocate your resources where they are needed the most, to analyze your expenses and to stay on top of your finances at all times. So it’s not surprising to hear this advice frequently. Personally, I also follow a very strict personal budget which looks almost like my companies P&L statement.

However, just because something helps one person, doesn’t mean that it’s good for everyone. Some people might not have the time to work on a personal budget plan. Some might hate Excel (or Numbers for Mac users), and others might just feel annoyed about micro-managing their financial lives. If you are one of those people, don’t despair. A budget is helpful, but I wouldn’t say that you need it to succeed financially.

Hitting your savings/investment target

What you actually really (and only) need is not necessarily a budget, but simply to hit your savings and investment targets.

Following a budget is a great exercise to learn how to control your income and expenses, but you could also go for a simpler and less micro-managed way. You could simply fix a target of how much you want to see yourself having saved up or invested in a specific timeframe.

Let’s say you want to see yourself having 100.000 Euros invested over a course of 10 years. This means that you need to save and invest 10.000 Euros a year on average – no matter how.

This is where you can stop, or expand a little further, it’s up to you. As long as you can hit this self-imposed target and it helps you to get closer to your end-target, you will be doing just fine.

I like to break ambitious targets into smaller, more reachable goals. 10.000 Euros sounds like a lot, but divide it by 12 to set a monthly goal and you will be down to a little over 800 Euros. Break it even further down by days and you will come down to just a little more than 27 Euros a day.

Now HOW you get those 27 Euros a day is completely up to you. Whether you save it on groceries or hot coffees, take it from your salary or take up a side-gig to increase your cash flow and to send the money into your investment account. It’s your choice. If you have some other passive income in place, like an annual bonus payment from your company, incoming dividends or interest from existing investments, or whatever will reduce your need for commitment, it counts.

This is another way to manage your money and it has some allure because it’s simple, less time consuming and it might not give you the feeling of restricting yourself too much and to still enjoy life (almost) to it’s fullest.

It’s all about your commitment

Working on our finances is similar to working out in a gym. You have to find the right way that works for you. You need to feel comfortable with the method you chose to ensure that your commitment to your goal never fades. As long as you got this in place, there is nothing to worry about and a budget might be not necessary.

Having said that and to stick with the gym analogy, if you got ambitious targets then you got to put a lot of effort into it to make it happen. A budget is just a tool that can help you to understand how the game works, but even a budget will not replace your commitment and efforts.

About ETF Investing and DRIP

One of the most popular ways to invest is to purchase so-called Exchange-Traded Funds, or short, ETFs. The concept is simple and quickly explained. It is basically a similar structure to a regular fund, where stocks of companies are being purchased into the fund and then being sold to potential investors as one product. The integrated mechanism is passive, which means that the fund is not being actively managed by any fund manager. Instead, it simply follows the share price of each stock within the fund.

This specific structure is great because it can keep the management fees of the ETF extremely low, while at the same time offering investors a wide diversification across several stocks at the same time. It is also a fact that most ETFs perform similarly or even better than most managed funds with the same investment scope.

I am invested in two ETFs. One is following the German MDAX Index. This ETF is not paying any dividends, but re-investing all profits immediately as they come up back into the ETF.

The other one is focused on European high dividend stocks within the EURO STOXX Index. This ETF is paying out dividends.

ETFs are a great way to DRIP

My previous article was about dividend reinvestment programs or DRIPs. As I mentioned, while it is very common in the US, it is not something European banks would offer to their customers. For my part, I am therefore usually collecting my dividends until I reach a critical sum of approximately 1.000 Euros and would then buy some new stocks/shares with it.

However, for people who just started to invest this may not be an option. If you only receive 10 or 20 Euros in dividends each month, then collecting a thousand Euros seems far off. Small investments of 10-20 Euro or even a hundred Euros may make little sense as the transaction costs for buying the shares will be too high and drag down (meaning it will increase) your average purchasing price per share.

Setting up an ETF-savings plan is a great way to solve this problem. ETF saving plans can be set up starting from as little as 25 Euros per transaction, and you can schedule it to be on a monthly, 2-monthly, quarterly or semi-annual basis. So even if you receive only 10 Euros a month, you can simply set up a savings plan on a quarterly payment basis and you will have effectively a DRIP in place.

If you prefer to set up a DRIP which will increase your dividend flow, then make sure to choose an ETF that is paying out dividends.

Creative thinking with investments

There are many methods and products in the world of finance that we can utilize to effectively set up our investments, to improve our income and ultimately to prepare ourselves for a bright future. Luckily, all we need to do is just a little bit of reading, an online banking account, and as little as 25 Euros to get started.

Investing in ETFs is a great way to diversify your portfolio, to DRIP and to build wealth in the long-run. So why not just start with it today?

DRIP it another way – DIY

Like in every profession, the world of investments is filled with abbreviations. One of the most popular, and dare I say most important ones, is called “DRIP”.

DRIP is an abbreviation for a Dividend Re-Investment Program which banks may offer their customers when they purchase certain stocks. The idea behind is very simple: When a company pays a dividend, the received cash is being immediately re-invested in more shares of the same company. This way one can automatically increase the amount of owned shares every time a dividend payment is due, without the need for any active involvement from the investor’s side.

It is a very effective and common system in the US. Unfortunately not so in Europe.

Europeans tend to be much more risk-averse and invest on average far less in stocks when compared with Americans. Over my investment lifetime, I had 6 different trading accounts with 6 different banks in Germany and none of them was offering DRIP.

DIY – Do it yourself

Well, if you have a problem and nobody is offering a solution, you got to take things in your own hands.

Every time when dividends are being paid out into my account, I am accumulating them until I reach an amount of approximately 1.000 Euros. Then I re-invest this 1.000 Euros. The 1.000 Euros is my guideline due to the rather high transaction costs charged by my bank. But, as long as I am working and my salary is sufficient to cover my on-going expenses, I am not withdrawing even one cent from my stock account. Ever.

Furthermore, I usually don’t re-invest this money into the same company. Instead, I will be on the lookout for another dividend paying company out there and purchase some shares of a new company.

My idea behind this is to diversify my investments to reduce the risk of any potential downturns in the market. For my FIRE account, I don’t buy companies that don’t pay dividends. So, my annual dividend income keeps increasing with every new investment I make. At the same time, as I spread out my investment over a vast range of different companies, my risk is being deleveraged.

That’s not the way of Mr. Buffett

Investment legend Warren Buffett is not a fan of this approach. He prefers a highly focused and compact portfolio. If I remember correctly, his investments as of today are in less than 20 companies. I have currently 16 different positions in my portfolio and expect to move up to 20 by the end of this year. Next year I hope to add another 10. And the year after another 10. My target is to have some 50 companies in my portfolio with ever-growing dividends.

I would love to have Mr. Buffett’s knowledge and experience, and to be able to make such successful investments as he did in the past. But let’s be realistic. I go to do this my way. I have far less money, experience, time and insights then him. For this reason, diversification is crucial for me.

DRIP or not – you got to keep re-investing

So whether your bank is offering a DRIP option or not. The lesson here is to keep re-investing your income from investments as long as you possibly can. Only this way you will be able to activate the power of compounding and see your dividends and investments grow.

Also, don’t get discouraged in the beginning. Dividend growth and re-investments are like a snowball that is slowly rolling down a mountain. It might take a while to get its momentum and it might even get stuck sometime. But at some point, it becomes a truly unstoppable avalanche.

The current market downturn will offer plenty of great investment opportunities. Watch out for solid, dividend-growing and dividend-paying companies and take advantage of the fear out there to grab them at a discount. Chances are that it will turn out to be a smart move in the long-run.

Opportunities on the rise

To be frank, I expected 2019 to be a good year. I was hoping the POTUS to get to some kind of arrangement with everyone, even if this would only mean that people learn how to handle his very specific character. But as we can see, the situation is completely out of control.

We have a new military conflict brewing up. We see a trade fight developing on a previously completely unimaginable scale, with even the largest companies in the world being brought down to their knees. Huawei is about to be the first victim and might very well not survive this fight. But what happens if China puts a ban on Apple? Or Starbucks? Some companies will pay a hefty price for what is happening.

Investors panic and my main portfolio suffered. It is now down to a total result of -12,7 %. This does not include received dividend payments. If I include the received dividends then I am at -7,8 %. It’s not too bad yet, so should I limit my losses and sell off?

Staying the course

The clear, only and simple answer is “no”. I am not selling even one share. We had chaos before. We had conflicts before. And the stock market always came back better and stronger.

What I am doing now is standing on the sidelines. I collect dividends and wait patiently to see how things are going to unfold. Most importantly, I am closely observing other stocks and specifically the dividend kings and dividend aristocrats. Chances are that even these behemoths which pay and increase dividends for 25+ or even 50+ consecutive years might come down significantly and therefore create great buying opportunities.

Cost-averaging down and yielding dividends up

For those who are convinced that their stocks will survive, whatever happens, a stronger market correction is a great opportunity to add more shares of those companies to your portfolio. For one, if you add shares to an existing position at a lower price, your average purchasing price for the entire position will be reduced. This way you will be able to balance off the losses more quickly once the correction is over and markets start to rise again.

Another benefit is, that while you are lowering your average purchasing price, as long as the company doesn’t cut its dividend, your dividend yield will automatically go up and your dividends will increase due to higher share count.

Growing dividends is all I want as my target is to be able to retire early with nothing else but dividends to cover my expenses.

Conclusion: No panic

For an inexperienced investor, it might be difficult to keep calm while watching the portfolio shrinking. However, as we know the market is designed to transfer money from the active to the patient. At least that’s one of the teachings from Warren Buffett and no one knows it better than him. So let’s enjoy the show, stay the course and don’t be fooled. We will pass this one. And the next.

Disclosure: I am invested in Apple via stocks.

Thinking about inflation

Today is the 12th of May, which means that today is the last day of the 19th week of this year. This, in turn, means that we have only 33 weeks left until it’s New Year’s Eve again. Time is short.

I have fulfilled one of my targets for 2019 and took a break in-between jobs for a total of 6 weeks. Frankly, I could use another 2 weeks. I spent 3 weeks in Thailand relaxing in and working a little on our house in the beautiful north-east province of Isaarn. After that, we visited my parents in Poland for a week and spent another 2 weeks together in our main home in Berlin. Those 3 weeks in Europe just passed by like nothing.

It’s funny because every time I visit Europe I feel different about it. Last year I was feeling great and was actually really thinking about moving back to Berlin. The summer was nice and hot, people were smiling and my daughter had the best time with my parents. This year, while it all also felt good, I took another perspective. One thing I noticed was that the city is getting pretty expensive.

Inflation is just part of the deal

When I moved out of my parents’ place at the age of 21, I had a super tight budget and was only able to spend approx. 20 Euros a week. My rent was roughly 400 Euros a month, which was equal to my income from my civil-service job (instead of going to the army I was doing civil service and working in a kindergarten). While working there from 6 AM to 3 PM every day, I took on a 2nd job for 3 hours daily at some local office. It would pay me 6 Euros an hour, and cover my expenses for utilities, telephone and whatever was required to ensure I don’t end up on the street. Additionally, in the evening, I would give Karate-lessons to children once a week in my local dojo which paid me 20 Euros. This was the money that I used to buy food/groceries for me and my girlfriend at that time, as we moved in together. It was tough but do-able.

Today, it’s impossible to find a 70 sqm 2-bedroom roof-apartment anywhere in Berlin for the same price of 400 Euros. Prices have doubled and tripled. It would also be very hard to get through the week on 20 Euros, even if that 20 Euros would be only for myself.

We all know that things change and that prices go up, one way or another. It’s just how it is and part of the game. Going deeper into this topic one might argue that today we receive much better value, despite paying a higher price. Apartments are in better conditions, with central heating systems, clean drinking water from the tap and better-insulated buildings to protect us and reduce heating costs during winter. Computers got actually cheaper while offering a performance that we could only dream of 20 years ago. Food… well this one is probably arguable. I don’t think food got better over the years.

But still, we really need to think about it and what it means for our personal situation.

Future prospects

This all happened in less than 20 years. I am now 39 years old so chances are, that I got at least another 20 years ahead of me. Probably more. It could be another 40 years. Or even 60. Could prices double and triple again?

Well, yes they could. In fact, I am pretty sure they will.

That’s why it is so important that your savings grow at a similar or larger pace. We cannot rely on things remaining similar in pricing in 10, 20 or 30 years from now. What we think will be enough to live on today, may be very different from the reality in the future. That’s why keeping money on a savings account over long periods of time is probably not the right thing to do. This money is losing value day by day.

Investing in stocks that consistently grow dividends, on the other hand, seems like a much smarter way to go. Even if those increases are marginal, like 2 % or 3 % a year, it beats every savings account out there not only by percentage but more importantly by its long-term value.

Obviously, if those increases can go up to 7 % or 10 % or even more, then there is really not much to complain about. And, this is not the case only for some rare-super-stocks. It’s pretty common for many companies out there. Plenty of companies increase their payouts on an even much larger scale, like 15 % or 20 %!

It does also make sense for a few simple reasons. As prices go up, so do revenues and profits. If companies manage on top to improve their margins and grow market shares, the growth becomes exponential. As an investor, you are poised to participate in this process.

This is why investing is such a powerful tool to increase wealth and this is why in my opinion, everyone who plans for FIRE needs to be invested one way or another.

Dividend Stocks make your worries go away

Over the last couple of months, I have started to reduce my social media presence and to close many of my online accounts. My Facebook account has been deleted (I seriously didn’t miss it a single day), and the same thing happened to my Twitter account and AirBnB. As I move closer towards my goal of FIRE, I plan to reduce my social media presence to a bare minimum. In the end, this blog… and possibly also my LinkedIn account for business purposes shall remain. Most others will be got to go.

But speaking of LinkedIn, I have recently noted a larger amount of posts where people are actively and openly seeking jobs, while also publicly stating that they have been unemployed for a couple of months. Some of them even go as far as to explain that they can’t pay for their children’s schools anymore, or to pay rent and needed to sell their house or downsize their condos.

Some of those CVs out there that I took a look at are actually quite impressive. From experienced, well-traveled professionals who reached tremendous success over the years, to aspiring intellectuals who surely made an impact in their previous organizations. And yet it seems that while they grew older, their age outweighs their experience. It just gets tougher to get hired, especially when you reach your 50s.

Prepare yourself

There are tons of situations why and how you might lose your job. You could debate on what is right or wrong, whether something is fair or not, and who to blame for what happens. Or you can prepare yourself. I like to prepare myself because blaming and guessing or discussing the issue at hand will probably not solve my problem. At least not as fast as I need it to get solved.

For me, investing in dividend-paying stocks is one pillar that I use to build my protection on. Due to the nature of my job, I grew with this challenge in mind since the beginning of my career. Every year or two I have to find a new hotel to work for, or worry whether my contract gets extended. Working as an expat in Asia comes with tremendous benefits and financial advantages, but the price to pay is a huge lack of security. Because every contract is limited to only 1 or 2 years and most come without any retirement pre-cautions, one can never truly relax and consider things to go well forever.

This is why securing several independent streams of income is crucial, and why the idea of financial freedom has been engraved in my DNA. I got to prepare myself for the worst-case scenario. I am 39 years old now and just signed another 2-year contract. Looking at my colleagues and other professionals in my industry, I know that 45 is the magic number when things will start to get really tough for me. Therefore I need to be ready for that before this challenge kicks in.

Dividend-paying stocks are a great source of income

It takes some time to play out well, but dividend-paying stocks are an amazing opportunity to benefit from our financial system. Buying the right stocks can result in tremendous advantages and a strong, re-occurring source of income.

When I was significantly younger, I didn’t really understand the power of what appeared to me “small yields”. 2% or 3%… this means that when I put 1.000 Euros into some company shares, I will get only 20-30 Euros back every year? Laughable.

What I didn’t appreciate at that time, was that not only do these amounts compound over a long period but also that those well-run companies tend to increase their payouts year-on-year.

Why is this important? Let me give you an amazing example. Warren Buffett is invested in Coca-Cola for a very long period through his company, Berkshire Hathaway. Over the years, Coca-Cola kept increasing its dividend payout. Year on year. The result: The yield on cost for Warren Buffett is now a stunning 62%!

This means that every year the stock returns him 62% of his initial investment. Getting back to our investment thesis of 1.000 Euros, this means that every year now he gets 620 Euros back in dividend payments for every 1.000 Euros that have been invested.

There is no hocus-pocus there, it’s just very basic and simple mathematics. And coca-cola is not the only company out there with such stunning results. Look no further than the brands you know well: Apple, Starbucks, Microsoft, Daimler, Shell… the opportunities are endless.

Start investing and stop worrying

No matter what your job or your business is, setting up a solid stock portfolio with dividend-paying stocks is a smart thing to do. While you are still working, it will increase your income. When you have no job, it will secure your most urgent needs. And when you plan to retire, you might be able to do so without even touching your savings.

But even more importantly, having another stream of income will put your mind at ease. Because even if you should lose your job, you will still have cash coming in. You will be able to buy food, and if you invested enough even pay your rent or your children’s school.

What happens if there is a crash in the stock market? Keep your cool, lean back and wait. The most reliable dividend stocks continued paying dividends even during the worst time on the stock market. Shell i.e. never lowered their dividend since the II. World War! Of course, there is some risk to every company and every stock, but that is why you need to diversify and purchase several stocks of different companies.

Do this especially when times are good, so you worry less when times turn bad.

Disclosure: I own shares of Apple, Daimler, and Shell at the time of writing. This article doesn’t represent investment advice. Please ensure to do your own due diligence before making any investment decisions.

The Power of Cash-Flow

Conservative investors or people who believe that stocks are too risky often prefer to put their hard earned money in real estate. The usual arguments are always the same and go something along those lines:

  • It’s a “real” asset, meaning that you can touch it, you can see it, you can visit it or live in it
  • It’s a safe investment because real estate rarely loses value
  • It’s generating regular and re-occurring income on a predictable basis

I will get on all three points but the focus will be on the last one: Generating regular and re-occurring income on a predictable basis. This is what we call cash-flow, and I will tell you why it’s such a powerful tool.

A “real” asset

This is a very true point and among the main reasons why people like real estate. Probably most of us have this little dream, of having our own place that we call home. Where we don’t need to pay rent, where we can do what we want and how we want it. Where the only limitation to our creativity and our wish on how to shape it is only our own imagination and the available budget to follow through on it.

So let me tell you first that this is, and probably will remain a dream. The sheer amount of regulations imposed on house construction, building permits, safety requirements, and local rules & regulations will restrict how your house has to be shaped, what building material you are allowed to use, where the doors and windows need to be placed and much more. So, there will be many things to restrict you, and you won’t be able to decide on your own every single part of your dream. You still got to follow some rules.

Second, while it is a so-called “hard” or “physical” asset, it comes with a few flaws that are worth mentioning and required to think about. While you might save money on rent, there are tons of other considerable costs that will strongly diminish your return on investment and may even put you in financial trouble if you are not well prepared for them.

Broken toilets, pipes, roofs, and floors are just one part of it. But new legislation or state laws might come in at very unfortunate moments and force you to spend much more than you bargained for. For example, imagine that the government decided that all houses require to become more energy efficient and thus you will have to upgrade the entire house insulation. A toilet or a pipe might set you back only a few hundred Euros, but a broken roof or house insulation will quickly go to the thousands.

Ever-increasing value

This one doesn’t require too much explanation, I mean the last housing crisis is not that far back. So yes, there is a real risk that real estate also may lose value. But while this point might still be debatable, the more interesting challenge for real estate is about the trading of the asset itself.

Buying and selling real estate is just hard work. It’s not easy at all. It’s not easy to initiate the sales, not easy to find buyers, not easy to negotiate the price and certainly not easy to process the whole thing with banks and all involved parties. Because while for some areas it might be easy to find a place to buy, when it comes to selling the property things can turn really challenging. Finding a buyer takes time, negotiating the price takes time. And the result is everything but certain.

Therefore, and to sum it up, the promised or expected value increase might turn out very different once you deduct all the cost you had to cover over the years holding it, and on top of that, if your few potential buyers won’t be willing to pay your expected price.

It’s generating a steady cash-flow

Whether you save money on rent or cash in rent from your tenants, real estate generates solid and predictable cash-flows every single month. And depending on the size, location and attractiveness of the property, it may be some quite serious money.

Cash-flow is great for a few reasons. For one, it makes you feel to be in control over your asset, it feels safe and very predictable, and you see the result of your investment immediately on your bank account.

Furthermore, due to those regular payments, you are able to manage your cash more actively and spent or re-invest on a frequent and dependable basis. The greatest advantage of solid cash-flows is your control over the money and many real estate investors consider it therefore superior to owning stocks.

There is another way

I got to admit that cash-flow is probably one of THE arguments to bring to the table on any investment discussion. It simply represents everything we expect from an investment: Receiving cash back straight to your account.

However, I argue that you can reach this with stocks in a much better, smarter, faster and easier way, and you are still able to choose whether you invest in companies or real estate.

Dividends also generate cash-flow

To start off, most company stocks that I invest in pay dividends. That’s my cash-flow and it’s also very important to me. Not only does it feel good to receive cash regularly, but even more it allows me to re-invest my earnings. This means that I can take advantage of upcoming opportunities to either reduce my investment costs (cost-average-effect) or furthermore increase my earnings by adding more shares of the same or another company. No matter which of these 2 options I choose, the result will be the same: The number of my shares will increase and so will the amount of my next dividend payment(s). Albert Einstein called it the 8th world-wonder and we all know it from our school-days as the 2 magic words: Compound interest.

Dividend-paying companies have all different policies and they tend to be also very diverse, depending on the country and company profile. But even the very average investor can manage to buy stocks to receive dividends every single month. Hell, just take a look at one of my previous articles where I show you how to get paid dividends every 2nd week!

Mix the best of both worlds – with REITs

If you think that real estates are still the more secure option then you can do even a much smarter thing that will combine the benefits of regular shares with the advantage of the benefits of real-estate by investing in so-called REITs (Real Estate Investment Trusts). Not only do they distribute a large chunk of their profits in the form of dividends, but also you won’t need to bother with all the physical and hard work that always comes with any physical property that you own. Broken roofs or new regulations won’t be your headache and on top of that, your risk will be spread across a significant amount of properties, as most REITs tend to manage not just one or two, but hundreds of different objects.

Investing in REITs won’t give you the feeling of owning a “real” asset, but it will take away all the hard work, balance your risk, and finally also remove all the trading obstacles. Because REITs can be traded on the stock exchange, finding a buyer or seller is as easy as it possibly can be. Just place the order and watch it being processed in a blink of your eye. It’s so easy.

Last but not least and a very, very, VERY important point to me: You can invest with as little as your wallet lets you. There is no need to talk to banks, take on hefty loans and keep paying back for the next 20-30 years. Borrowing money is called leverage, and it’s a serious thing. As our mastermind Warren Buffett famously said, leverage is the single thing that can crush any investor and you got to be really smart how to use it.

I don’t consider myself smart enough for that, so I prefer to stay away from leverage and instead invest only the money that I have available at the time of my choice.

It’s all about passive income

My personal aim is FIRE – and it means to generate sufficient passive income at some point so I really don’t need to do ANYTHING – unless I want to. That’s what the word “passive” stands for.

Buying and managing hard assets is not matching my definition of passive income. Buying a house or condo requires a lot of work, dedication, and responsibility. All the things that I want to get rid off. Therefore, stocks and REITs are for me a much more desirable solution.

This is, by the way, the reason why financial advisors need to evaluate your character, risk factor and expectations before helping you on making an investing decision. So you might want to ask yourself now: What kind of investor are you?

Trading stocks in Thailand

I decided a few months back to open a stock account for my wife. I am not a big fan of shared or joined accounts and prefer if everyone has his/her own fair share of independence. Therefore, while we keep our bank accounts separate, it only makes sense that she also has her own source of wealth and income for her future plans, ideas, and dreams – which may or may not align with mine. Another reason is also that it’s always better to have a 2nd income under another name within the family. Saving taxes and reducing complications.


But speaking of taxes, Thailand is a great destination for investors. There is no capital gain tax in place, so any profits collected from stock trading are completely tax-free. That is if you are living in Thailand of course. On top of that, dividend payouts are taxed at very reasonable 10 %. Therefore, no matter whether you are a trader or a long-term investor, Thailand is an attractive place to invest.


I opened a securities account with the Bangkok Bank. It’s a fairly simple process, all you need to do is to go to a branch, sign some documents, show your passport and after a few days you will receive a username, password and the instruction to install an APP on your phone called STREAMING. It’s actually not easy to find information about it online so you can get a peek at how it looks HERE. The app can access your securities account with the username and password details.

There are different types of accounts. The most simple one is cash-based, meaning that you can only buy stocks with the money you put on it. If you like to have an overdraft in place or plan to short stocks, it is possible but further documents such as a work permit in Thailand or another person to guarantee for you, and/or a security deposit might be required.

I opened the account with Bangkok Bank because my main salary account is also there. Banks in Thailand are quite modern and advanced and offer much smarter solutions compared with i.e. German banks. One such function is “bill payment” which can be used to pay electric bills, water, telephone etc. in an instant. Transferring money to the securities account is also being done via this function and once the account has been verified, money will be deposited within milliseconds.

Transaction costs are extremely low, you can see the commission rates HERE. Usually, your cost will be less than 0,5% even with a very low trading volume. The system to calculate the commission is a little bit complicated because it is based on volume not only per transaction, but on your actual total daily traded volume, but from my point of view its a waste of time to elaborate on it. The cost is so low that it’s completely negligible.

Last but not least, what you also might want to do is to declare your main bank account (which must be a Thai bank) as your payout account for dividends. The service is called e-dividend and will ensure that any dividend payment will be transferred immediately to your main account. 10% in taxes are being deducted without any further action required from your side, so there is also no hassle about this later with any authorities.

You will need to do a tax declaration by the end of the year where your dividends need to be listed, but doing taxes in Thailand is amazingly simple. You do it completely online and it’s literally one A4 page that contains all the information.

Stocks & Information

The first source for information about Thai stocks should be the SET website (Stock Exchange of Thailand). It’s pretty comprehensive and full of information about every single listed stock. I encourage you to explore this site in detail. It has a dividend calendar, detailed company information, daily news updates and more.

The 2nd source of information is the Streaming App. It has plenty of built-in evaluation tools, to quickly identify stocks according to your preferred investment strategy. Dividend Growth, Small Caps, Value Stocks… the integrated stock screener is extremely useful to quickly identify companies that are worth a second look.

Probably the only and biggest restriction is, that you can trade only Thai stocks and Thai ETFs. I would have loved to add some US stocks or REITs but that’s unfortunately not possible for now.


There are plenty of successful, dividend-paying companies in Thailand and yields are great. My wife’s account will probably reach a yield of 4,5 % this year and dividend growth is also a thing here. Most companies pay dividends only once or twice a year. The main dividend season is around April / May and then later again around September / October. However, as an income investor, you can find companies that pay out a dividend on different months as well. My target is to create a monthly-income portfolio and I think I can have it up and running within a year.

…. and go!

This is almost everything you need to know to get started. Happy investing!

The dividend season is coming!

As the calendar has continued to roll into March, we are quickly approaching the dividend season in Germany. While most companies in the US pay out a dividend every 3 months, German companies do so only once a year. One could argue about which system is better or worse, but that’s a topic for another discussion.

In Germany…

The majority of companies in the largest German Stock Exchange Index (DAX) is paying out dividends from April to June. Right on time before summer vacation, to ensure that we get the necessary pocket money to go on holidays. Well, or if you are smarter, to re-invest it.

Traditionally over the last years, right before the announcements for upcoming dividends will happen, share prices start to rise as analysts evaluate and predict the expected payouts. And despite challenges across the globe, 2019 does look like a great year again. To understand the significance of this season, you need to take a look at some numbers. The expectation for 2019 alone for the DAX companies is a total payout of 35 Billion Euros!

That’s the number. Can you even imagine to have something like this on your account? Well, most people can’t and most people will never come even close to it, so this doesn’t really need to be your target. But receiving a piece of that pie is definitely worth the effort.

This is even truer if comparing dividend yields with traditional saving accounts. While it is currently quite easy to find companies which offer a yield on your investment of 3% or more, most saving accounts will be still below the 1% margin. It means that even with a modest 3% yield, you can receive 3 times the money that you would get if it’s parked on a traditional savings account. Just think about that. This the reason why investing simply makes sense.

In Thailand…

Interesting enough, Thailand has 2 major dividend seasons as most Thai companies pay dividends twice a year. The first season is similar to the German one, between April to June. The second one is around September and October.

I didn’t write much about the Thai stock market yet as I am still gathering experience, but I am setting up a stock account for my wife. As you might have guessed, I prefer stocks over life-insurance. Interestingly, Thai companies offer much higher dividend yields across the board and while some might think that investing here is risky, the truth is that the risk is pretty much controlled.

Due to the close relationship between politics and business, major companies are pretty well protected and with the country growing and moving forward, their profits are almost on autopilot. I will write more about this at a later point, but for now, I am getting ready for the dividend season here as well.

Re-investing is the key to long-term success

Receiving dividends at much higher yields compared with savings accounts is a beautiful thing. Even more so is the fact, that many dividend-paying companies tend to increase those dividends year over year. Re-invest those payouts, and you will create the 8th world-wonder: The magic of compound interest. Or compound-dividend. This is the one and only true key for long-term success, which any average person can achieve with very little effort.

Regular, growing dividends will enable you to escape the rate race much sooner. Or, if you prefer to keep working, offer you a nice supplement to your monthly paycheck or retirement payout. While many financial advisors will discuss with you about the 4% rule and about taking out money from your savings/retirement account when you get old, dividends offer you a much better option: Not taking out any money at all. If you are invested long enough, you can receive dividend-yields of 5-6% easily without selling even 1 stock, thus being able to enjoy a great lifestyle until your last breath.

This is no hocus-pocus. This is the power of investing.

There is no bad time to invest

It’s already the 3rd week of February. Think about that, we were JUST talking about new years plans and now we are already almost done with the first 2 months of this new year.

For the US, Dutch and some UK investors this doesn’t play a big role, but for everyone else, things are getting exciting. We are about to enter the main dividend season, and investors looking for some great dividend-plays have still plenty of opportunities to consider. On my part over the last 2 months, I have bought shares in Daimler, BASF, Royal Dutch Shell (RDSB), and AT&T.


For AT&T I have increased an existing position, to cost-average-down my original purchasing price. This company is not only a great dividend stock, but I believe also that it’s about to reach a turning point this year. The acquisition of Time Warner will ensure a steady cash-flow to pay for the dividends, and the CEO promised to start focusing on paying down the companies debts. So these are 2 great reasons. Some people talk about the 5G roll-out and the potential benefits of this development, but I remain skeptical for now and don’t think it will have any significant contribution to the company’s bottom line for this or even next year. New technologies usually require stronger investments and it takes some time until those start turning into profits. Nevertheless, this may be anticipated by the market ahead, thus there is a chance for the stock to start moving up once those 5G plans become substantial. But no matter what you think, with a well covered 6,5 % yielding dividend payer on this scale, I don’t really see any downside at this point.


RDSB, the Royal Dutch Shell shares which are registered through the UK and have therefore no withholding tax, is probably one of the best dividends stocks you can buy right now. 5,9 % with quarterly payments and exposure to not only one of the most profitable industry sectors in the world (oil), but also to a great company that is continuously shifting towards renewables and has a clear vision on where energy needs to go from here. Shell is not only investing on a large-scale in solar-energy but has also recently acquired the German company Sonnen, which is producing home-energy storage units. For me, Shell is just the right company for the conscious investor. It makes money with the energy of the past and sets itself up to become an energy leader with the energy of the future.


BASF is a German giant in the chemistry sector. The German withholding tax is terrible so this sweet 5,2 % yield on dividend (as of the time of writing this article) will shrink down to something around 3,4 %. But it’s still better than any savings account and the stock trades at lows that we have seen last time around 2016. I am not sure whether I will keep it as a dividend stock or trade it out of my portfolio when it gets back on track. Let’s see.


Daimler is, of course, considered a risky play at the moment. President Trump could impose tariffs, Tesla could keep eating up market share, CATL could increase prices for the new batteries that Daimler needs for their new electric cars (cause they forgot to do some research & development on that front over the recent years)… there are many question marks and it sure is a risky investment. But as far as I see it, all these uncertainties are priced into the stock already and any good news might propel the company back to its highs. And the dividend yield of 6,45 % (or something around 4,6 % after tax) is pretty solid.

Disclosure: There are obviously many more dividend plays to think about and since I am not a professional advisor, please ensure to do your own due diligence before making any financial decisions that may include the purchase of stocks. As I wrote above, I owe stocks of all the companies mentioned in this article.

The great but also annoying thing about the stock market is, that it’s always moving up and down. There are always opportunities – and disappointments – but trying to time the market is wasted time. The most reliable way to profit from stocks is simply to keep investing and to buy stocks which present a great value to us.

In my opinion, one of the most reliable factors is the dividend, because if a company can pay and cover its dividends in bad times, then there is a great chance that the company will do even better in good times. And don’t be fooled. Those good times always come back, we just don’t know exactly when.