Investing in Stocks Denmark - Explained in 5 Minutes

Hey - Today, I’ll tell you - in 5 minutes - everything you need to know about investing in Denmark: your options, the taxes, the systems, and the best plan.

I’ve ten years of experience investing in Denmark and will share the most important points with you.

Why Invest

Investing, in short, is about putting your money to work for you. Instead of sitting in the bank account, or in your home, you - literally - get that money to produce more money for you.

People have been investing since time immemorial, but, now, in the 2020s it has become easy, accessible and in the reach of everyone.

You don’t need to be rich. You don’t need to have connections. You don’t even need to research much. You just need your phone and a tiny bit of money to start.

That said, Denmark is - because of taxes - likely the world’s worst place to invest. But, even then, this is something I do and I recommend most of my smart friends.

The Best Plan for Denmark

Disclaimer - This is for information and entertainment purposes only. Do your own research before you spend your money.

Your plan is: buy index funds (the top-pick for 99% of the investors), do it automatically and do it over the long-term in the most tax-efficient way possible.

That’s all you need to know.

But now let me unpack that:

a) Buying Index Funds

• Index funds are funds that cover the whole market. Instead of buying the stock for Apple, Spotify, and Coca-Cola, you buy one fund that covers all of the companies.

• Index funds have multiple benefits:

  a) It's very easy to start investing in index funds

  b)You don't have to spend time worrying about picking and choosing particular stocks

  c) They're low risk per their built-in diversification

  d) They're cheap – usually 0%-0,5% per year in costs, vs. a lot more for human-managed funds

• Index funds allow you a “set-it-and-forget approach”. They’re what allow me - a kind-of investing and money YouTuber to get my money to work for me and literally spend five minutes a month on it.

• I’m not getting into the specifics of how you buy these funds, but I’ll explain that - and everything else - in my Investing Course, which is free and there’s a link in the video description.

b) Use Danish Brokers

When you buy a stock or a fund you do it through a broker. In 2023, this is just an app. Simple.

But, Denmark - as I said - is a terrible place to invest. In this graph here you see the maze of rules we’ve just for buying index funds.

SHOW GRAPH

Depending the type of fund, you can end up paying one tax, or another tax, and some times when you sell, sometimes when you don’t sell.

For reference, in all other countries this would be just two boxes and one line.

Thankfully, if you use a Denmark-based investment broker like Nordnet or Saxo they’ll take care of all the taxes for you. They’ll tell SKAT directly everything and you don’t need to lift a finger.

Hence, even if they’re expensive - it’s just easier. You don’t want to end up on SKAT’s wrong side.

The Actions

So, in light of this, my recommendation is two-fold:

1. Max Out Your Aktiesparekonto - This is a special account where you have streamlined rules: you pay 17% in taxes on the gains your stocks had each year. You pay - and this sucks - on unrealized gains: so even if you don’t sell the stocks or funds. But it’s better than the alternatives.

You can only put in a little more than 100K kr, but it’s the starting point. Before you invest further, max this one out. Meaning: your first 100K in investment should go into this account.

You can open one Aktiesparekonto ONLY in Danish brokers like Nordnet or Saxo. I explain more on these accounts in this video.

2. Use Månedsopsparing in Nordnet - For any money on top of these 100K go with Nordnet’s Månedsopsparing. This is the best set-it-and-forget option for investing for Denmark-based people.

• What you want is that each month, the day after your salary comes in, you’ve an automatic transfer from your bank account to your investment accounts. It takes one minute to setup that in Nordea or Danske Bank, for instance.
• What the Månedsopsparing setup will do is that it will take that money in - say 10K a month - and then buy up to four different stocks or index funds you predetermine. You say in advance like 50% USA Stocks, 20% Europe, 10% Denmark, 20% Emerging Markets, and then it does it all in the background.
• Note - You need to say the exact fund you want to buy, and I share the best options tax-wise for Denmark in the free course.

Then, you do this consistently. I’ve started years ago and this now is a serious money pot. I had good years, great years and some pretty terrible ones as well. But overall my money has been growing and now I’m a bit closer to financial independence.

If you’re thinking about getting started, just remember that even 1K is enough. It’s about building the habit.

Last Note - For 90% of the people, I recommend to just focus in index funds. Don’t buy individual stocks, or crypto, art, or crowd-lending or the like. Yes, you can make money: but unless you’ve an informational advantage, you likely won’t. It’s not worth it.

Remember: get rich quick doesn’t exist. You just need to play the long game.