European companion guide to my favorite quick introduction to index funds

If you are looking for a quick introduction to investing in index funds, Bernstein’s “If You Can – How millennials can get rich slowly” is my favorite recommendation. I have recommended other books as well but “If You Can” is remarkable because it is only 16 pages long, it is free and it covers the essentials you need to understand.

On this quick book you will learn:

  • How saving money is the foundation of a sound investment strategy
  • How the stock market and investing works
  • How risky it is to invest in stocks
  • How the hardest part about investing is controlling our own emotions and acting rationally
  • A simple and effective investment strategy
  • How some brokers, advisors, financial media and fund providers may not have your best interests in mind

Additionally, this book also gives you a reading list to further develop your knowledge.

“If you can” is tailored to the a US audience so I wanted to take the time to succinctly explain aspects which European readers need to consider.

  1. A 401(k) and IRA are retirement savings schemes. 401(k) and IRA are specific to the US but there are comparable versions of them in European countries. Different retirement savings schemes will have different tax benefits, investable assets, investment costs and withdrawal restrictions. You will have to assess if specific version of the retirement saving scheme in your country is beneficial.
  2. The easiest way to access index funds in Europe is through ETFs which are index funds transacted in a stock exchange. justETF is a popular website to check the details of a particular ETF.
  3. ETFs have a country where they are legally incorporated – a domicile. A good domicile reduces your tax expenses which in turn increases your returns. Prefer ETFs domiciled in Ireland. Luxembourg is OK too.
  4. Index funds may receive dividends/interest from the assets in which they invest. There are two types of funds in regards of how they use these dividends: distributing and accumulating funds. Distributing funds will distribute the dividends to investors. Accumulating funds will reinvest those dividends within the fund. You should choose the most beneficial type of fund based on where you live and your broker.
  5. Suggestion of ETFs that invest in companies (i.e. Equities)
  6. Suggestions of ETFs that invest in bonds (i.e. Fixed Income)
  7. Only buy bonds funds hedged to your local currency (e.g. EUR) otherwise you are exposing yourself to unnecessary currency risk.
  8. A savings with the highest interest rates you can find may be an alternative to the bond funds I suggested.
  9. You need to decide how much to allocate to Equities and to Fixed Income. If you aren’t sure, you may start with 70% equities and 30% fixed income.
  10. You will need a broker in order to buy ETFs. DeGiro and InteractiveBrokers are popular cross-border brokers. Monevator has a comparison table of brokers available in the UK. There are some countries where local brokers are more advantageous to tax related bureaucracy (e.g. Germany and Austria).
  11. If you need help /r/eupersonalfinance, /r/EuropeFIRE and the Bogleheads forum are full of amazingly helpful people. You can create an anonymous account and ask a question there.
  12. The Bogleheads wiki is an very useful free online resource. It has dedicated pages for investing from Europe. At the bottom you will find links to wiki pages dedicated to the following countries: Belgium, Germany, Ireland, Italy, Netherlands, Spain, UK.

Disclaimer: This information is for educational and entertainment purposes only. This does not represent, in any case, specific investment, legal nor tax advice nor recommendations to purchase a particular financial product. Learn more at