Here’s my plan for the coming 18 months. Thoughts?

Coffee
1

I have recently put together what I think is a really compelling plan for myself for the coming 18 months, and I’d love to hear your thoughts.

To be frank, I am not looking for comments on how this can’t be done, but perhaps helpful tips and things I might have overlooked so that this plan can be even better with YOUR help.

In bold, I highlighted the parts I’d need help with.

August — November ’23 (preparation - 3 objectives)

#1 objective - invest in a property

As you’ll read later, I plan on resigning from my job in December. It’s been 4 years in this job; I don’t feel like I learn anymore or progress at all.

Before doing so, while I have a great income on paper I could take a mortgage in my home country (part of the EU) and invest in a 2- or 3-room apartment in the capital city. With an aim to rent it (while I am not present there), but with an outlook of this place being my place to live if I ever decide to return.

But now I am having second thoughts. The interest rates will probably hit 5% by EOY. That’ll mean that for each e.g., 200K borrowed, I’ll have to repay ~400K. The prices of the apartments are between €250-300K. But I am thinking about whether the prices won’t cool down the moment people’s 1% interest rates will expire, and they’ll jump to 5% and won’t be able to pay their mortgages anymore.

What’s your take on the above assumptions?
If I don’t invest in this apartment - what should I do?
Invest in stocks? Wait till 2025, sell stocks, and buy then when I would potentially live in that apartment?
Shall I borrow 80% (the minimum downpayment is 20%) or should this ratio be different?

My net worth by EOY should be at €270K (~230K in cash).

The way I initially thought about the money is:
230K - 20K for travels - 60K downpayment - 30K apt furniture = I am left with 120K.

I could then save up some more in '25 (read the plan below) and use that money as a downpayment for an apartment in Switzerland. (OR, I can simply put as a downpayment the 120K+60K)

#2 objective - revamp my resume

To be ready when I come back and start looking.

#3 objective - pick up a new skill/certification

To increase my chances of finding a new job.

December (resignation)

On a 2-month notice period.
By this time, I’d need to have bought the apartment.

January ’24 (last day at work)

This way I could potentially say on my resume I finished my last job in ’24, and with a bit of luck I’ll start a new one in ’24 too (with no gap on my resume).
Before this day, I’d furnish the apartment and find a tenant for it.

February — May ’24 (traveling)

I really need to switch off after this demanding job I have right now.
I always dreamed about taking 3-4 month trip in between jobs.
Traveling is my passion.

May — December ’24 (search for work)

After coming back from my travels, I plan on registering at the unemployment office. (TODO: need to get the exact conditions here to understand that my 3-month travels won’t cause any issues)
Move to Zurich and search for a new job. Go to events, meet people.
Learn the language to pass the permit C language test as my permit B is expiring in December 2024. (I know, I am setting myself up for a challenge to find a job, but I don’t see any other way to maintain the above points without doing it this way)

—

If I fail in any way or something doesn’t work out, it will be fine. I will adjust.
To me, it’s important that I am finally taking control over my life and “reclaiming it back”.
Thank you for taking the time to read and for any of your constructive comments.

1 Like
2

What do you mean “no gap”, you’ll anyway have a gap even if you start working again in the same year, it will just be a gap of a few months.

Anyway, a gap on your resume is not an issue, just say that you used the time to improve your language skills or any other skill and you’ll be fine.

3

Do people list jobs by year only on their resumé? Really?

Just don’t expect receiving unemployment benefits. Otherwise, what kind of issues may crop up?

That may be a good idea to do earlier, since you’re expecting to change jobs (and don’t know what you’re going to do afterwards). It may very well be considered a plus on getting a new job.

1 Like
4

While owning an apartment may be your number one objective, your reasoning for doing so befuddles me.

I think you’re conflating the motives and reasons for buying an apartment (or any real estate) a bit here - or at least haven’t explained them enough here.

There’s mainly two:

  1. to live in the apartment
  2. as an investment

Now, with regards to the first one, you haven’t really mentioned a concrete plan to return to your home country, beyond a vague notion that you „may eventually return“ to your home country. To the contrary, you mentioned preparing to receive a C permit in Switzerland and even mentioned thoughts about buying an apartment in Switzerland as well, beginning in 2025.

As to the second, I am missing the the math here. Have you done the math on that investment and could you post it? What’s your expected return on renting out the apartment after costs and interest? And what about the potential changes in value, if you don’t hold it forever. I can well imagine that Bratislava may be a good place to live - and a do well as real estate market in the future. Will that hold true for your own apartment though? Even if you do eventually move to Bratislava, will the apartment meet your personal needs? You may have a family with 2 children by then - do you live with them in a 2-room flat?

:point_right:t2: Do understand that buying a single apartment as an individual presents a huge concentration risk as part of your overall wealth.Especially when you do it „on leverage“ (a mortgage).

2 Likes
5

3 posts were split to a new topic: How do you write your CV?

6

Things you might have overlooked:

  • It’s hard to be a landlord from a distance. You need to be able to quickly find a professional to fix things if they break (plumber, electrician, etc.) and make sure the job is done timely and to your satisfaction and that the billed hours/material are coherent with the reality. That’s not something I would want to be doing while experiencing my travel break.

  • At times, there might be no tenant, or the tenant may not pay their bills on time, or they may damage your appartment. I would make sure there’s some leeway in my budget to still be able to afford the mortgage and live if that happens.

  • Prices might not go down. People have the same information as you do so can prepare themselves to a 5% rate. The 5% rate may never come. If institutions own big shares of the real estate in the city, they may intervene on the market to prevent too big a drop. Having people loose their house is not well viewed politically so politicians may act to prevent a crisis too.

Invest according to your time horizon. If you expect to use those funds within 2 years to buy real estate, then I’d put them in a 2 years bond/note/fixed term instrument. If you have a long horizon, stocks are ok. They are also ok if you are willing to postpone/give up on your base project and keep the money invested if a big downturn occurs when you would otherwise want to pull the money out.

This, to me, is the most important part. Your plan has many challenges and may be hard to hold at times, there are many pieces that could go wrong but you seem to be willing to deal with it and have the confidence to rebounce if things go south. That confidence is very important and can carry you to positive things in your life. My two remarks are:

  1. The whole plan, to me, seems predicated on you having skills in high demand on the job market. I expect you do but if not, that is taking a lot of risks and things are likely not to pan out the way you would want them to.

  2. The investment real estate and the travel break goals seem to me as being in conflict: I would want to have my mind empty of problems/requirements when travelling, and being a landlord may conflict with that. I would wait until I get new employment to buy the real estate.

2 Likes
7

To sum up and paraphrase (from a more skeptical point of view):

  • you plan to spend hundreds of thousands of Euros
  • on something (a flat) that’s at a fixed location and can’t be moved
  • in a city and country you don’t live in or nearby
  • on the vague notion that possibly, at some point in the future, you may occupy it yourself
  • from mostly taking on debt
  • that you have to pay interest on
  • while being unemployed and with no employment income
  • and calculating a whole 8 months on finding a new job
  • in Switzerland, where finding a job should be stupidly easy as a well-qualified 27-year old

It’s something that, generally, few would encourage, I believe.

3 Likes
8

Super insightful comments and a lot to take in and incorporate. For starter:

  • start learning the language now (already in progress)
  • comment on explaining a gap in my resume taken
  • in case I won’t receive any unemployment benefits, I should have sufficient funds to survive easily
  • landlord from a distance - should be fine, I have plenty of closest friends and family in the city
  • potentially wait with buying real estate after my travels - it might be reasonable. I am trying to tackle it myself. My only reason for doing so now was because 1/ at the moment, I have flexibility in my job to come and see apartments myself 2/ I have a good income to present to the bank.

I think I am confident about this plan and I feel like I don’t have a better option on the table for the moment (or one I’d rather like to pursue).
At the same time, I am very flexible. For instance, if I find a remote job with a US company I won’t need to be fixed in Switzerland at all costs (I am open to changes in this plan).
I guess that’s why my reasoning for buying an apartment (so I have a base), but also believe that having an apartment in a capital city, the prices won’t really go down just as you mentioned @Wolverine.

Which anyway brings me to @San_Francisco’s point. Thank you for your insights. I am sorry. I am doing this for the first time in my life. Can you help me understand how can I do proper math on such an investment?

2 Likes
9

Unless your work environment is particularly toxic, consider negotiating a sabbatical / a few unpaid months off for travel. This frees your headspace from worrying about finances while trying to enjoy your time off. How long you actually stay in the job once you get back is a different topic…

2 Likes
10

For rental property investment a rule of thumb I like is that net rental yield should be absolute minimum 5% after maintenance and vacancies and before interest expense.

If you follow this rule the dice are loaded in your favor. 5% is approximately the long term average mortgage rate for Euro or USD regions

11

Honestly, Though I have a general idea how I would go about the calculation, I haven’t been interested much in buying real estate - so I don’t really know about reasonable values for the variables. Maybe others can chip in on that? I believe we must have discussed on the forum at some point though.

12

@Marek any update? :slight_smile:

Might it be possible to apply for a job now to have the future job lined up before resigning from your current job?

13

A real update is that I feel bad about NOT achieving everything in my plan, but it’s not the end of the world.

Buying a property
I did search for properties quite a lot. My biggest drawback was that I didn’t look at it as purely an investment, but I wanted an apartment where I’d like to live myself too some day. I was unable to find an apartment I’d like for a price I’d like. The real estate market is definitely really slow at the moment, which plays in my advantage, but still…

Some friends advised me not to overthink it. Perhaps the first purchase will never be ideal, but at least you’re invested in the market and later can get something better.

Revamp my resume
I think my resume was pretty strong anyway. I still shit my pants big time, about leaving my comfort zone and well-paid job, but I still believe it’s the right decision to go.

Pick up a new skill/certification
For the moment, I completely failed this one too. I wasn’t able to pick one thing that would be worth pursuing. But that’s fine. I can start focusing on this, once I hand in my resignation.

Applying for jobs
I emailed a bunch of institutions about unemployment benefits and learned that it’s good to start applying for jobs the moment you know you’ll be leaving your company. So I started to send a couple of applications a month. So far I got rejections and one interview with HR, then got declined at problem-solving tests.

While none of the above signals are positive, I don’t have kids, any commitments, or a mortgage. So even if I’d end up jobless for another year or two, I’d be just fine.

P.S. I had thoughts about skipping the traveling part completely and starting my own little SaaS project. However, I know I can’t do it without a technical partner (I have some tech knowledge, but not enough). Also, I don’t believe in people having busy full-time jobs (like I do) and still working on a side hustle. Ideally, if I’d find an excellent software architect who’d be willing to sit down in one apartment for 3-4 months to develop and go to market day in and day out I’d go for it.

3 Likes