Question about Stock investing (Beginner)

[kurosaki4d]

Hello,

I have some money saved, around $20k.

I don’t want my money to be just sitting on a bank and being devalued over time with inflation, ideally I want to grow it and make it work.

I already have some money invested in crypto, but I have never got into Stocks.

I heard about a lot of different stocks to invest in, like ETF, or REITS.

Having said that, please keep in mind that I’m from a third world country, so I don’t know if that affects the requirements to join a stock platform where I can invest in.

I’m only a beginner, and I have a couple of questions:

1. Which one should I focus on? ETF, Reits? Or both?
2. Based on the question earlier, which platform do you recommend I register to?
3. Can i get my money in and out whenever i want? Is there a penalty?
4. Do i need to have a company to invest? Or can I do it as a physical person?
5. Do accept payment methods withdraw to electronic banks like Payoneer or Wise?

Your guidance would be deeply appreciated.



Thank you

 

[HardRJones]

I’ve not done this from your country (and don’t know what it is), so this answer is vague and speculative, and written on a very basic level.

Your access is going to depend on the exact country. IBKR is going to offer access to quite a few. You might start there.
https://www.interactivebrokers.com/en/accounts/open-account-country-list.php

Your local banks might offer options.

Look at the tax laws for individuals in your country and the trading costs (fees, commissions) imposed by your brokerage/banking options. You should go into this with a tax strategy in mind even though the amount of money is relatively low.

Make sure that the bank are you using to deposit funds can be linked to your brokerage account. If both are legitimate then you shouldn’t have issues moving money in and out. Check for any transfer fees.

IBKR should work with Wise but I haven’t tested this myself.
https://wise.com/us/blog/wise-platform-and-interactive-brokers-team-up
https://www.interactivebrokers.com/en/support/fund-my-account.php

Structure your transfers and transactions to minimize fees.

If these options are bad, you can look at company formation in a different jurisdiction. That is likely cost prohibitive compared to local fees and taxes given the amount of money you are talking about.

If you have access to them, low fee ETFs are your best bet to start. Have a goal, a timeline, and an exit strategy before buying. Index tracking ETFs are stupid simple on a long time horizon. Most US domiciled ETFs will pay dividends. EU domiciled ETFs usually offer two options, one of which reinvests dividends for tax optimization. There is little need to get into REITs or individual stocks based on your stated objective unless there are tax or access issues to deal with.

 

[kurosaki4d]

Thank you so much for your explicit answer. Makes a lot of sense.

I understand that ETF and index funds are quite similar in a lot of ways, which one would you recommend for a beginner to focus on?

 

[HardRJones]

ETFs and mutual funds are similar in practical effect but differ in details. ETFs are probably the most flexible way to go under most circumstances. ETFs designed to track indices will be the most grounded in market fundamentals. There are other themed ETFs as well.

 

[kurosaki4d]

ETFs and mutual funds are similar in practical effect but differ in details. ETFs are probably the most flexible way to go under most circumstances. ETFs designed to track indices will be the most grounded in market fundamentals. There are other themed ETFs as well.

So if i go with Vanguard as a "Fund manager", and then *S&P 500 ETFs (like VOO or VTI), would you say it's the way to go to get some kind of low risk, compounding effect and good return in the next couple of years?