Moving is easy when you do not have local strings. My whole family lives in the same canton and several in the same commune, all my friends are nearby, all my acquaintances are nearby as well. For me, this is entirely worth the money I pay to not move to a cheaper canton.
When I moved to Switzerland, I chose Zürich as a good place to live for a start. Then when my income went up, I considered moving, the math would be as follows:
So, living in Pfäffikon/Freienbach would save me 20k in taxes per year. But before corona it was not realistic for me to have more than 1 home office day per week. And from Pfäffikon SZ there is one train every half an hour that takes 29 minutes to HB.
When I calculated 1h commute per day for 200 days a year, that tax saving was 100 CHF per hour. That is a lot, but it’s still not as much as I bill per hour. And Pfäffikon is an ugly place, there is definitely more to do in Zürich. So in the end it wasn’t worth it.
Now, with home office, it changes the picture. I could even move to a nicer looking location than Pfäffikon, with higher living standards for the same price. But my partner still has to physically be present in Zürich every day, so I’m blocked by that.
What I’m trying to say is that even if you’re totally reasonable and mustachian (many people aren’t), there are still valid reasons for why people don’t move.
Understood, but that’s if you like / can tolerate:
- commuting (I would despise anything more than 1-2 times a week; and if more often than that - longer than 20-30min)
- working from home (which I don’t personally enjoy)
- not having friends/family/liveliness around (I wouldn’t live in a town smaller than the 3-4 biggest ones)
If I had a family I would probably think otherwise, and possibly consider getting a larger cheaper place away from the centers of life.
Sure these are valid reasons to stay in the centre, everyone needs to consider pros and cons and then decide.
When I lived in Zürich, I was near Höngg and my workplace at that time was near Albisgütli so it took me around 55 minutes even though both places were in the same city. I tend to live in a place for 10-15 years but change my jobs more often, e.g. every 5 years, so it can be hard to keep commuting below 30 minutes at times because you’ll never know where you’ll work next.
My current employer provides a Bonus Pass from SBB so I can get a first class ticket much cheaper, so I make use of a bit more comfort and space, trying to do something useful in the train. E.g. sending mails, reading a book, listen to an audio book, watch YouTube, podcasts, read forum posts, things I would otherwise do at home in front of the PC. Sometimes I even do a bit of work, then it even counts as working time. So even though I don’t like commuting very much, I try to make the best out of the situation and enjoy the benefits that come along with it. I enjoy working from home very much and I also have an extra room for that just being my office and the flat is still cheaper than the one in Zurich
Can definitely say that Canton Zug is good for mustachians.
Just as a success story: At the mustachian meetup in Zürich last autumn i met 2 others from Zug (one was just 500 metres away from my house), and we kept contact pretty nicely.
Mustachians have to be some of the most agreeable people around. Also for me it is helpful to exchange stories and knowledge with people older and more advanced in their careers. Makes you understand the business world better and how education and company profile works out to salary in the future.
Some other types of people that could work out as frugal friends:
- Workers and visitors in the Brockenhüüsli
- People that visit flea markets regularly
- People in the cheap no-frills gyms (not those steroid youths )
- People in those repair shops, where you can bring things and they help you fix it
- and of course people that do hiking/camping a lot
As the discussion has deviated a bit towards cheaper places to live, you may want to read this study by Credit Suisse. All relevant factors are taken into account, not just taxes. Makes a lot of sense to me to optimize the location in such a manner.
I love gems like this. Somebody put the work and presented it in graphical form, I will have a lot of fun with that website .
BTW, to kind of refer to the topic, I think it would maybe be easier to find mustachian friends in mustachian destinations. Especially if you’re looking for a place to settle down, it’s important that there are people there that you can spend time with.
So I played with the tool. I agree with what you say, you should consider taxes, housing & commute, and this tool does a really nice job. What I don’t like is that the map is so small, they could have made it full screen. Moreover, they have a few preset options, and you cannot enter your own.
This is the closest to what I aim for. But I would be more interested to check for the following criteria:
- I would like to reduce work, continue contracting from home office for maybe 2 days a week. That would mean employment income of 100’000 CHF
- I would like to have saved 2m in stock, which would generate an additional 40’000 CHF dividend income (even if initially not there, I would still be saving and growing my portfolio for years to come)
- Additionally, I’d like a mortgage on a house worth 1-1.5m
- No commute, no children
I wonder how would the map look for these criteria.
Well, I think CS wants you to pay for this type of studies.
Actually in the PDF they have more examples, with map, you just can’t click and see direct numbers. But yes, this kind of advisory, based on numbers, that’s worth paying for. Not “we take 2% of your wealth annually to manage it”
I was considering moving to canton SZ, Wollerau/Feusisberg/Schindellegi but if, as some here say, SZ is stricter in classifying investors as professional traders (vs ZH), that idea could backfire…
I really like the way you calculate these things but it is not exactly accurate because you compare net savings with gross income, no? For example for you to earn 100chf net on the hour at a high marginal tax rate plus counting social security, you would need to earn almost 200chf gross to get the 100chf net…
Also this thread ended up discussing where to live while still earning high salaries. I am curious which places are best when you FIRE and no longer have such high income but have higher wealth.
No, he wouldn’t have to earn CHF 200 to get CHF 100 net. Even with a high marginal tax rate (just checked the withholding tax for canton Schwyz to have a reference - highest marginal tax rate is 21.11% above 1 Mio CHF per month), if he charges CHF 150.- per hour he’s saving more by living in Zurich. And even if it would be equal in terms of savings, I’d also rather live in Zurich than in Pfäffikon.
Go to Comparis tax calculator and just select a low income and high net worth. Then select different cities in Switzerland. Pfäffikon and Zug are still the best, with Nidwalden gaining some ground due to lower taxes on net worth.
nothing beats Ticino tbh. Fantastic nature, near Italy for additional trips/holidays, cheaper but still clean&safe, and it doesn’t tax wealthy retired people too much. Language not a problem at all, you can go far with french, german, english.
I know that hiking is not for everybody, but Ticino has 50 mountains who are 3000+ mlm and every single one you can hike to, no climbing required. Already trying to go over all the 3000 would keep you busy for a couple of years
and houses are still cheap (hauptwohnsitz)
No, he was in Zurich with at least 40% marginal tax rate plus social security and comparing moving to Schwyz with a savings of about 20k on taxes. So in Zurich he would have to earn almost 200chf to get 100chf net.
Sorry I meant that I was interested in the opinion of folks from this forum on the topic of where to live after FIRE, not just finding where is best purely for taxes, although it is fine if that is also part of the equation.
In TI there is also no wealth tax for up to 200’000 CHF even for individuals
I didn’t get into the details, but my gross hourly rate was higher than 100 CHF. It was 150 CHF. So if I worked 1’800 hours in a year, my turnover would be 270’000 CHF. My taxable income that I declared in the tax declaration was 200’000 CHF. Tax paid where I live was around 50’000 CHF, which left me with 150’000 CHF. But on top of that I count around 30’000 CHF which are tax-free. That includes lunch benefit and 2nd pillar. So we get 100 CHF post-tax.
Anyway, now such thing as commute has become an option.
Yes, I would also be interested in that. Obviously these places would have to be far from any business centres where the real estate prices are inflated by workers. Sadly I found it that if a place has low tax, it usually has a lot of business, or wealthy people, which inflates real estate prices. Also the places with lowest taxes are the ones in central Switzerland / in the mountains, which are the most attractive locations in my opinion.
I think I agree. I really like to be in Ascona/Locarno and Lugano. The whole valley between Airolo and Bellinzona I would scratch, because of the Autobahn (noise and pollution) and shadow. Since it can get hot in the Summer, I would probably like to go a bit higher, like Orselina above Locarno or Monte Bre.
But is real estate really cheap in there? I don’t think so. At least not the places that I saw on the display in the real estate agencies. But yeah, maybe these places only show super expensive locations.
I didn’t calculate with the marginal rate, but with the total rate. I can’t be bothered to rerun the numbers, though. As I’ve said, since 2 years I sit at home in Zurich, so commute is really not a concern for me anymore.
I think for my question, it does not matter how you calculate your hourly rate 100% exactly. It is enough to know that you it was more than 100 CHF gross but even better to know if it was more than 200chf per hour.
I think it is the saving part that I was trying to discuss. Basically, I am interested on how you calculate the trading of time for money outside work (with the commuting in this case) because I think it could help us all get to the right numbers for many situations, not just this example of commuting. So to remove specifics there were two options:
Option A) Total cost equal X; extra time spent equal Zero
Option B) Total cost equal Y, where X - Y = 20K (20K savings); extra time spent equal 200h, for 100chf per hour
The premise was that A was better than B because you earn more than 100chf per hour. OK, now you don’t have to commute, but let’s just continue with the example that you can do 200 hours of something to save 20K.
My question was, is this the best way to compare? Because sure you earn more than 100chf gross per hour, but option B is actually saving you almost 200chf gross. I am claiming this because if you keep option A, you would need to earn almost 40K extra to take home about 20K completely net. The precise calculation is harder because your marginal tax could grow even more. I simplify it by considering that in Zürich it is almsot 50% when you count social security, in practice should be a bit less (maybe 45% or 48%). But still, that is a big difference when you want to include this tradeoff on the decision…
What do you think? Does it make sense to approach exchange of personal time for savings using gross income that would be needed to achieve the same savings versus the amount you actually save? What I am trying to get at, is that whenever you reduce your expenses, that is increase in your take home salary, but to work to get that same amount you need to earn more in terms of gross income. Does that make sense?