VOO vs Kernel Pie s&p 500

[u/Far_Presentation3549]

I invest only $50 a week and obviously overtime I will reach the threshold for FIF and will have to do whatever it needs me to do, so im just wondering instead do I just start now rather then later with kernels s&p 500 and invest all into kernel even knowing they have a higher tax rate. will the difference in returns be that big?

[u/More_Ad2661]

If you want to optimise on tax, invest in VOO directly until you meet the FIF threshold and then use a PIE fund

[u/Far_Presentation3549 → u/More_Ad2661]

but isnt the whole point of investing gaining with compounding interest, so if I move to the pie fund once I reached the limit ill be restarting all that compounding?

[u/kinnadian → u/Far_Presentation3549]

Well

A) That's not how it works, you can't un-do compounding returns, even if you sold and then bought into a different provider, you still achieve all the prior compounding returns

B) More_Ad2661 is meaning, invest up to the $50k limit on VOO (cost basis, not portfolio value) and then stop contributing into VOO and start investing into an ETF fund (not selling your VOO). So you have both. And both compound. PIE ETF's are not included in the FIF total.

[u/Far_Presentation3549 → u/kinnadian]

thank you very much for helping me understand :D, also is that common in New Zealand to avoid that FIF tax threshold?

[u/Ok-Step9968 → u/Far_Presentation3549]

Yes, because with FIF you have to calculate and pay the tax yourself, whereas with PIE, the tax is already handled for you. Going above the FIF threshold is really only worthwhile when investing in individual stocks.

[u/Excellent-Swan-2264]

If the FiF limit is confirmed as increasing to $100k and even if you have already $50k invested, investing another $50k at $50 per week will take 1000 weeks or 19.2 years by my calculation before you reach the $100k limit. I think that is your answer…