21 yo looking for general financial advice

Hi long time reader of the forum and first time poster.
I’m 21 yo and I’ll be studying medicine for the next 6 years. I am debt free and have a little over 50k in savings and a guaranteed monthly income of 300.- for food and bills. The whole 6 years of university should set me back around 20k (tuition fees, books, material). Because of the time consuming nature of my curriculum I probably won’t be able to work except occasionally during semester breaks. I have considered putting some of my money in an ETF with Degiro but I wouldn’t know how much of it and if it is even worth the hassle considering the short time horizon of six years until I finish my degree and the lack of regular income. Essentially I’m not sure if it’s worth the risk investing money now that I might need during the next 6 years.
Looking forward to receiving your input!

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Just out of curiosity, how did you manage to save 50k at this age?

I worked for some time after getting my high school degree and I benefited from an insurance plan set up by my parents…

great start, congrats!
I think you first need to make a financial plan, and after that think about investing. Let’s derive it with assumptions i make, you will have to adjust this to your situation.

first make an estimate on your living expenses and income. for example, CHF 1000 per month (do you have housing expenses?) plus 20k/(12months*6years) ~= CHF 300 per month for university, netting CHF 1300 per month in expenses.
your income is CHF 300 per month, maybe plus on average 100per month from student jobs.

that leaves you with a burn rate of 900 CHF per month to be covered from your assets of 50k, which will be depleted after already 4.6 years and leaves you with 15k that you have to get from somewhere else.

So your time horizon would be 4.6 years then, or a linear average of 2.3 years. this is a very short term for investing, you should be super-defensive with this. don’t put anything at risk with stocks that could fall sharply. if it wasnt for the current low- interest regime, i’d say look at the money market (“storing” money for 6 months, 1 year, 2 years) for some minimum interest, but I guess a simple savings account will be just as good.

when you did your calculations, you might want to check every few months if your assumptions turned out to be correct and adjust accordingly.

that’s it from my side, all the best for your studies & finances!

thanks for the reply. I do not have housing expenses and all the monthly expenses I have should be covered by the 300.- I get every month. This leaves me with 30k for the next 6 years.

ok then you can make up your mind on investing. read up on passive index investing. as you do that, you will get a clearer idea on what to do; and you will become confident with it. I’d expect it to be a classic buy & hold portfolio, with depending on your time horizon, risk awareness and financial plans, will consist of xx% of an all-world stock portfolio, for example Vanguard VT and (1-xx)% of some defensive part, cash for example.

now it’s on you :slight_smile:
and take the time for it. it is well spent. don’t feel in a rush, if it takes you 6 months to read a few books, then that’s how it goes!

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50k in savings quickly pale against every semester more or less that you spend on getting your degree. The opportunity cost of graduating one year later will probably approach or surpass 50k.

Just imagine what you could earn and save by entering the workforce with a degree one year earlier - and vice versa. One of the best investments you could make might be the ones that enable to complete your degree early (if possible).

Though that’s obviously a purely economic way of looking at it.

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Indeed. I don’t know how are doctors doing in Switzerland, but in Poland they are paid laughable money by the state. Something like 600 chf per month right after you graduate. So it’s very cool that you are becoming a doctor, but always consider the financial side, as not to be bitter after some years and protesting on the streets for a higher salary.

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