Mandatory Expenses once FIREd

Once you really start FI, you should document your experiences for the future generations (that is us). :wink:

… Well FYI my plan would be to be "a citizen of the World :wink: ". Spend some time in Poland, in Spain etc, but maintain my domicile in Switzerland. I would spend some time in Switzerland, but only as much as needed. I was thinking about buying a flat with my 2nd and 3rd pillar + mortgage and the sublet it.

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Remember the profitability criteria the bank will require for mortgage. Your income must guarantee that 5% interest rates +1%/year amortization + “costs” will not exceed 35% of your income. Will the bank accept dividend income? Will you have to transfer them your net worth to guarantee collaterall? Best to have this answered beforehand.

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That is cosmopolitan bum. :joy:

The amount was considering “minimum” lifestyle (rent, health insurance, food, 2300CHF per month).

My thinking was, dividends are more or less “sure”, or at least compared to capital gains.

I am really starting to think that more work --> more taxes. Once you have your basic covered with investments, I don’t see the necessity of working anymore. Or perhaps a super part time job that pays 30000 at year, working like 20%. I think that could also be great.

Since Countries like to eat so much money from us, we should take advantage of the lower taxed income. perhaps also working 4 months and doing nothing 8 months…

That is a very good point that I actually didn’t consider. I was thinking I would just take the mortgage in the last year of work, but of course the bank will make periodic checks and if it sees that I no longer have a job, they might activate some clause that would allow them to break the contract and I would have to give them back the money.

The Tragbarkeit formula goes like this:

required income = (5% * loan_value + 1% * flat_value) * 3
For example (5%*400’000+1%*600’000)*3 = 78’000

Of course I don’t plan to generate that kind of income, even with dividends. Maybe they could take my ETFs as collateral, but probably not at 100% of value. And in the event of a hugh market crash, I could risk the situation where my ETFs would not be enough coverage and the bank could demand more collateral, which I wouldn’t have.

Well, maybe my plan with mortgage cannot work. I will have to check my options. Thanks for pointing this out.

You may consider renting an apartment, and subletting everything except one room. My friend who lives abroad is doing something like that to keep his Zug domicile for tax benefits. He spends (formally) half of the year in South America, and the other half (formally) in his room.

PS. Julianek, probably fork. :slight_smile:

That would be 4 (optimistically) to 7 (pessimistically) years :smiley: . End of 2025 I will have been 10 years in Switzerland and shortly before turning 40 yo.

Can you explain to me, how is that better that renting a room? Or even just being registered somewhere without a contract? I used to have a friend, who I just requested by the flat owner company to be registered at my place. They sent a document stating that he is registered at this address and that was enough for the Stadtbüro.

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I was subletting apartment for two years in Switzerland and the immigration office wasn’t happy about this. They only gave me permit B for one year because of that and they constant asked me when I’ll rent an apartment.

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So another option would be to “officially” have a joint rent contract (you + a friend). Then you both are responsible for paying the whole amount of the rent, and how much who pays is up to the two of you. That’s of course only an option for close friends, who trust each other enough.

Actually, my girlfriend has no rent contract. She is just angemeldet in the flat I rent. But she is Swiss, so I guess they can’t kick her out of the country :thinking:

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Why are you so fixed on Switzerland? There’s plenty of good countries to get FIREd

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I’ve done a similar analysis for myself, and your list is complete for those part of expenses not under your control.

A few comments:
Wealth tax looks great in ZH. I have other places (GL) at 3x more to 5x more (BS). :+1:

I don’t feel the total return from this AHV payment is all to bad, actually (if things stay the same as at the mo).

It’s a significant expense compared to the others, so remember that the inflation on this is much higher than “normal”. Last 20 years in CH was officially +0.5% in general (if u ask me, very many things had actually negative inflation, food, beer, cars), while KK increased a whopping 4% p.a.!
Inflation is an important factor when calculating for the next 30 years, even more so when it’s not acc. to the “normal” rate.

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For me, i wud actually mostly live where I pay taxes and out of those 9, apart from Switzerland, only Malaysia or NZ make the cut for me. So options limited again…
The other 6 are shtholes or shtexpensive to rent something in.
It’s funny that they mention Belgium and that Gerard Depardieu moved there for tax reasons, cudn’t have been that great - isn’t he now in Russia for tax reasons?

Because I live here now and I know it and it has a great standard of living and stability. It would be very risky to go with my wealth to a country I know nothing about.

But let’s go through your list:
9. Switzerland - expensive to live
8. Singapore - expensive, crowded, hot and humid
7. Cayman Islands - almost nobody lives there, it’s an island far away
6. Monaco - super expensive and not so easy to get in
5. Belgium - would consider it, if the sum of all taxes would really be low
4. Malaysia - seems like too far from my cultural and climate preferences
3. New Zealand - Definitely a great option, but it’s so far from Europe
2. Belize - that’s a really poor place
1, Hong Kong - super overcrowded and expensive, with China creeping in

Wonder why they don’t mention a place like Dubai or Abu Dhabi?

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But they have the Chilli Crab and are less than 2 hours away from best dive sites in the world.

The bank will only check your situation before they give you the mortgage, and then again at the end of it (in case you want to renegotiate one), that is, if you don’t forget to pay the interests :).

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You get a stable country where everybody gets that laughable pension to cover for their very basic needs. I find it pretty fair, and I guess it’s far less generous than most countries in the EU.

You can simulate the taxes here:
https://www.steueramt.zh.ch/internet/finanzdirektion/ksta/de/steuerberechnung/npers/staats_und_gemeindesteuern.html
For info, the cantons with the lower taxes are ZG, SZ, OW, NW

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@valarmorghulis That’s why dividend stocks are a bad idea in CH

Wow my thread was very well hijacked :sweat_smile::sweat_smile:
Actually noone answered precisely to my question. It would be great to know if someone lives only through dividends how much taxes he/she/it pays.
Don’t think they should tax you 30% if your income (even if through dividends) should be taxed at 5%…