Opening account in IB

ibI have used Estonian broker LHV for my stock purchases for over 10 years. During that time I have paid thousands of dollars (and euros for that matter) for commissions and fees. I had always rationalized that one day I will move my business to discount broker but it was never urgent enough. Until I found out about Interactive Brokers and their 1 dollar commissions. I also found out from investing forums that many other estonians had opened account in IB and it was not such a big hassle after all. So in August 2015 when I was vacationing in Hiiumaa, I bought a local beer, created hotspot with my phone and finally opened an account in Interactive Brokers. And yes, it was easy indeed 😉

My goal is to build up dividend growth portfolio worth 100,000 usd+ that would generate growing dividend income for me and my family. I own this account as individual and so I will be taxed 15% on dividend income (this is automatically done by dividend withholding tax) and 20% on capital gains (I plan to use investment account tax strategy that will enable you to start paying tax only once you take money out from investments to consumption).

I have set some general outlines on stock selection and allocation. I plan to have 30-40% of my assets in IB invested in Berkshire Hathaway, 10-20% in Apple and 10% in speculations. The rest will be divided by dividend growth stocks.


2 thoughts on “Opening account in IB

  1. How many transactions do you do per month? Does it pay off, when using buy and hold strategy with just couple of transactions per year? I never thought it would pay off, to pay Monthly Activity fee:

    Monthly Activity Fee = 0 if monthly commissions are equal to at least USD 10.

  2. I personally do 3-10 trades per month so it is worth it. I like to buy in small increments and currently have 15 positions. Future goal is to get my account over 100k and then it is activity fee free.

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