Congratulations!
It will be interesting if you track the difference in costs for having a child.
Also, who are the Milleinal Revolution’s people?
Congratulations!
It will be interesting if you track the difference in costs for having a child.
Also, who are the Milleinal Revolution’s people?
FI people from Canada who has spent the last two years visiting the world
Sure, so far it is not really expensive
Plus, the canton gives us 200 CHF per month for the baby. So far it balances out quite nicely!
It’s even more impressive if you compare it to YTD of VT: -0.12%. The real test of performance though requires at least a decade IMHO. Shorter than that I still won’t put my faith in your net nets.
PS. As always I love your books recommendations. Thanks a lot. I already read Taleb and Kahneman, but not the others (especially LKY book seems interesting - I’m generally interested in microstates, like Singapore or Hong Kong). I need to open my own journal thread and publish my numbers and books that I’ve read. Compounding of reading is even more powerful than compounding of the interest - it’s a really good investment!
Oh yes the LKY book is great! In particular, one key aspect for me was the culture difference between west and east. In the western world we have broadly three distinct socio-economic ways of thinking : socialists, conservatives and libertarians. In the East, one of the main school of thoughts is confucianism (where the primary focus is the wellbeing of your family and society), and it is interesting to see how LKY picked several items from each school of thought to unite them in a society that works.
One other key take-away is when he states that democracy is not the cause of progress but its result; and that, in order for democracy to work in a society, you first need a cohesive society and a prosperous middle-class (as an illustration of this, see for instance the various recent failures each time western countries tried to impose “democracy” in other countries…)
For those interested in Value Investing, I cannot recommend enough the work of Sanjay Bakshi, a professor - and practitioner - vastly influenced by Charlie Munger and Buffett:
I noticed a lot of people talked about their Investment policy statement lately. Since my investment style tend to differ a lot from other members, I thought it would be a good exercise to layout my investment philosophy. of course, it may be amended with future experiences.
„Take a simple idea and take it very seriously.“ Charlie Munger
I decided to apply the idea of compound interest with utmost seriousness.
My goal as an investor is to compound my wealth at the highest rate possible. A compounding machine has three components:
I will continuously save between 65% and 70% of the money I am earning through my job, until I become financially independent (saved up 30 times annual expenses), which I expect to happen in approximately 7 years (give or take 2 years depending on market conditions). After which I may stop working (or at least stop exchanging my time against money when considering an occupation).
This one is easy: Being currently 32 years old, I expect to let my compounding machine run at least 30 or 40 years, hopefully much more depending on my health.
A nice tool when we have a long term horizon is the rule of 72, which gives you the amount of time needed to double your money by compounding.
It is all about the number of doubles occurring in your time horizon. With a 10 years horizon, there won’t be that many doubles, even compounding at 26% (there would be only 3.33 doublings in this case).
But with a 30 years runway, the number of doublings can be huge! Between 3 and 10 doublings using above rates (and 2^10 is a very sweet number where your money has been multiplied by 1’000…)
This is the part where I actually invest the money.
So far, I have classified these occasions in five categories:
The circle of competence is very important. If I am not able to understand how a company is making money, which factors are driving its earnings, where its competitive advantage comes from and how this advantage is likely to endure in the future, I should automatically pass to the next opportunity.
One last point : such occasions are usually found in smaller stocks. It is easier to go from a market cap of $100 million to $1billion (a lot of companies did it) rather than from $100 billion to $1trillion (very few did it) or from $1trillion to $10 trillion (no company ever did it).
This one is easier. I will sell when:
Thanks to @1000000CHF I have finally read James Clear’s book Atomic Habits. It is fantastic!
The book provides a comprehensive set of rules and advices that help us changing our behavior and instill new habits/break bad habits.
I had read before The Power of Habits by Charles Duhigg, but had found it impractical although interesting from a theoretical point of view. Here it is the opposite: think practical and implement
Hi Julianek,
I’ve been reading this forum for a few months now and also the jurnal section. A lot of great information and advice, I learned a lot from the posts here.
I’m trying to run a salary calculator simulation on https://www.lohncomputer.ch/en/your-result/
However, if I input 10774 chf per month for a married couple with no children, not church members living in Zurich they estimate net income 8285, that’s a far cry from 9944 I see on your table even if I add the employers P2 contribution.
Can you shed some light on how you reached those numbers, please?
If we earn say 130k between myself and my wife on a B permit, how much would that be Net, assuming we will live somewhere in the canton of Zurich most likely close to the German border.
We are planning to relocate there from Dublin and I am trying to compare overall cost of living & purchase power.
Thank you,
Regards,
Vlad
A lot more than in Dublin in any case.
Only US beats Switzerland in compensation
Hi Vlad,
Yes you got me on this one: in our situation in 2017 I earned most of our income (around 120k gross) while my wife did various small jobs and tasks (at some point she had up to 3 employers) for around 500 - 1000 CHF / month. So although I may have correctly recorded all the AVS/First pillar and witholding tax for my salary, in the case of my wife her salary usually arrived waaaay before the many payslips; So in her case I may not have recorded all the social contributions. But the Net income is accurate in any case. The above exercice’s purpose was more to track our daily expenses after net salary.
Anyway, if you want to have a more precise idea of how much you will take home in your pocket, I advise you to follow the simulator, the picture may be more accurate than our special situation
Thank you Julianek,
So for example, in your calculation, did you include the Pension fund as Income?
Would you consider 6’377.20 CHF Net and than add twice the P2 value to reach your spreadsheet
Assuming you pay 50% of P2 and the employer pays the other 50%.
That’s 471 * 2 + 6377 = 7319
Also, any idea about that withholding TAX.
Can that be avoided or diminished P3a maybe ?
Thank you,
For the second pillar, it will depend of the pension fund provider chosen by your employer, but yes assuming that 50% is paid by you and 50% by your employer is a safe assumption.
For the withholding tax, this is not avoidable as long as you haven’t lived in CH more than 5 years. You can however invest in a 3a pillar (max ~6500 CHF per year) and deduct it from your taxable income. Then at the end of the year you claim a tax refund (except around 1000 CHF tax savings).
Thanks,
Really appreciate your advice.
Regards,
The human brain cannot grasp exponential growth, episode 194.
Consider the following question: “A sheet of paper is roughly 0.05 mm thick. Suppose you could fold it in two, fifty times in a row. How thick would it be?”
Most people answer around 4 centimeters.
In reality, the sheet would be so thick it would cover the Earth-Sun distance.
Are you trying to tell us you went to Moon with some cryptos?
Can you fold it more than 11 times?
Make 13 to make a world record:
If you fold an A4 sheet of paper 103 times its thickness will roughly be the size of the Universe.
Edit: google is fun. Together with that link there are 4-5 links that says it’s “common knowledge” that you can’t fold it more than 7 times.
True, that’s why I formulated the question as “Suppose you could…”
Not really, no. I don’t have a view strong enough on crypto to make it a meaningful part of my portfolio. I’ll pass my turn on this one
My point was to highlight once again that our brains are just not equipped to grasp what exponential growth means. In this example the average answer is wrong by 12 orders of magnitude (4cm vs 150 million km). This is absolutely nuts and continues to amaze me.
And this is also partly why i still think that quality, long-term compounders are a good long-term investment.