I just turned 24 years old a few days ago and as a birthday present to myself, started looking into FI and through that, found the MP website and forum.
My current situation:
I’m currently still studying for my bachelors degree in Computer Science at a technical university. I work part time 3 days a week (60%) and go to university the other two days. I have 3 more semesters to complete now and will then start working full-time.
Currently, I have nearly 60k CHF in my name, with ~20k of those in my 3a which I am currently in the process of moving to VIAC. I make CHF 3250.- per month before taxes and my parents support me with CHF 500 per month aditionally.
My most major expenses are rent, food, etc. for the Appartment I live in with roommates, about CHF 750.- / month. I rarely go to eat out or go drinking at bars. All-in-all, I have been able to save about 1200.- per month for the past year and more before that (was still living with my parents) which has accumulated to nearly CHF 40k in my bank account - to me it seems like I should start making the money work for me while trying to optimise my savings further!
This is where I’m now unsure how to continue. I was thinking of keeping about CHF 20k as cash in my bank account, as an emergency fund if I were to need it. The other CHF 20’000 I would like to start investing longer-term via cornertrader. From reading, I feel that ETFs are the way to go here? How do I find out which ones to pick, which suit me risk-wise? Do I pick Swiss, European, American, Global ones? I realise I still need to inform myself more and would be very thankful for any inputs, comments, links to reading material, pointers in any other way.
750chf per month for a flatshare? Maybe you should start to save there. Or do you mean food+rent+etc = 750?
You are actually in a kind of similar situation I was in a couple of years ago (except the university and the 3a part).
I would just skip Cornertrader and go directly to IB (this is the advice I wish I had taken when I first asked a similar quiestion). You can even take advantage of the lowered inactivity fee till you are 25.
20k may be a bit much for an emergency fund with your expenses. I usually keep about 10k in the bank which sould last at least 6m when going bare minimum.
Hello! Yes, this is food, rent, water, billag, heating, electricity, maitenance (like lightbulbs, all the small stuff needed in a rental), internet, house-insurance, the whole 9 nine yards pretty much
Thank you for your input. That’s a great Idea - I hadn’t noticed that the low inactivity fee (Just CHF 3.00 for under 26y/o?) exists.
Also true about the 20k - I can live very frugally (think living on a sofa somewhere) If I’d have to, I’ve done it before - I will probably lower that emergency fund to 10k.
If you don’t mind me asking, as you said you were in a similar position as myself, how did you get started? Is there any reading etc. you can recommend to me? Thank you.
The 3$ is till 25 but even at 10$ it is pretty cheap especially considdering that this is also kind of a “credit” for fees of that month. (Not that you should usually need that much)
Well it all started with MMM (no Idea how I found it but I read all of it within a couple of weeks) and then a couple forums. I was recomended IB but pretty much imidiately dismissed it because they were US (Kind of the reason why I am shilling IB all the time now XD). At first i got a Truewealt account, that one did not let me do things (but it is a solid solution for what it is) so I opened a Saxo account and started investing in the VWRL.
Then It was tax time and I ended up in this forum. Also saw how expensive Saxo actually was and moved everything to IB and VT.
I am staying away from 3a for now because If I retire early the money is kind of stuck and investments are limited and with my current tax rate it does not make that much sense.
But anyway starting young gives a pretty neat headstart.
Props on your living costs, I pretty much pay the same for living with my parents.
Can you get it for considerably less? I thought 600 CHF+ is quite normal for sharing a flat? (if located in one of the major university towns)
This is with utilities, food etc. Included (see my other post replying to @ma0) i dont think I could get it down much more, especially regarding where I currently live
Thanks for your insights. Any perticular reason you started investing into VWRL? Also, where is the best place I can read more into different etfs?
Sidenote: at this point investing in yourself might be the biggest win you can have (focusing on your studies, investing on growing your friends and family, landing a well paid job you like, etc.).
Whatever you do with money while still a student is likely to be negligible once you start earning multiple times more your current income.
I see your point and have thought about this as well - however, im a bit worried about “missing out” because the 30-odd k are just sitting in my savings account generating nearly no interest. Is this irational?
Yes, I’d think it’s not worth it. 30k compounded at 6% over 10 years is an extra 24k, I don’t think it will make much difference to your overall FIRE plans. Maybe just make sure your savings beat inflation, but besides that, I’d think investment on yourself will yield much more.
(e.g. what if you spend 2 months figuring out how to ace interview and land a job at a much better paying place? I’m sure it can easily but worth 25k extra annual salary)
It was the best all world etf awailable from my swiss broker. VT isi similar but cheaper and bigger.
There are so many threads on this topic here and they usually have similar conclusions.
Good points, thank you both!
This depends on compounding and time frame. For example for retirement, it’s better to invest regularly 200 chf when you’re 20 years old than invest 20000 chf when you’re 60.
I’d say focus on both - invest in yourself and save for FIRE.
I’m pretty much in the same situation as you (except I’m two years younger and therefore have more semesters left studying CS).
My plan is to just get to know all this investing stuff, go slow and get to know the system by starting with small amounts.
As others have said, when you have your degree and earn a lot more it’s time to invest the big money! But I guess it can’t hurt to already know how stuff works.
For my part, I’m planning to make an account and figure out Interactive Brokers.
Can I ask at which university you’re studying?
I pay 1100 for a room with flatmates… and it is nothing luxurious
Sounds quite a lot for sharing with multiple(?) flatmates.
But then again it might be in the center of Zurich, so probably not that strange.
We are 4 people in the center of Geneva. Rents can get pretty expensive over here.