Hello Mustachian community!
I found this forum some days ago and I have been reading a lot. Very nice community here!
I also follow a blog called “The Poor Swiss” and he is also very fond of investing on ETFs. So I decided it is time for me to do some in-depth research on ETFs and start investing by the end of this year.
Before jumping with both feet in to learn as much as I can about ETFs, I would like to get some reassurement from the community that I understand it correctly. Any help will be greatly appreciated.
So for ETFs I am going to put a very simple example to see if I get it right
Let´s say I chose an ETF that has an average yearly return of 10%. This means some years it will be 30%, others will be -10%. It is the average.
So let´s say that I put 10.000 CHF into this ETF and I don´t touch it for the next 10 years.
Does that mean that on average I will get 1.000 CHF per year in dividends? That simple? Of course from those 1.000 CHF I will have to pay taxes and … custody fees or similar?
And, what happens with inflation? So if I do not reinvest those 1000CHF per year on buying more titles of the ETFs, will my original 10k devaluate over time? I guess no, right? Because if it keeps growing at 10% year, it means my titles also grow in value at 10% year, so the moment I want to sell all the ETF titles, they will be worth more than the initial 10k.
Am I getting this right?
Sorry for too much questions but I just want to make sure it works like this before putting a lot of time researching it in depth and investing.
Cheers to the mustachian community!