Newcomer - my story

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1

Hello everyone!

I’m new here, I’ve taken the chance to use my free time lately to study my financial situation and make necessary changes and thanks to you I’m in my way to improve.

So quickly in 2 words, I’m 40 and live in Vaud. Poor choices led me to: 3rd pillar not invested, TradeDirect broker, stock picking, 1 bank account in France, and worse of all a mortgage at UBS.

I’ve divided my journey in small steps and I will update my post in the future:

1. Close the account in France and replace by Neon

  • Banque Populaire - contacted
  • Neon - requested

2. Replace Cler by Zak

  • Cler - contacted
  • Zak done, used the code ONLYMP :+1:

3. Open Frankly

  • Sent 2 Cler accounts to Frankly: done
  • Send 1 BCV account to Frankly: requested but 6 months waiting time! :laughing:
  • Invest plan: (95% plan)
    1/3 now - Requested 17.04
    2/3 in the next 12 months, invested every month

4. Get InteractiveBrokers account

  • Open account: not done
  • Transfer funds: not done
  • Exchange chf->$: not done
  • Buy VT: not done
  • Invest plan:: keep it simple - invest monthly in VT

That’s my story :stuck_out_tongue: I will post questions here and update along the way. Again, thank you for the community! Any advice welcome.

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2

Welcome, denis

Congratulations for taking your finances seriously! And good job on putting together a plan.

I don’t see this addressed at all in your plan. Might be worth addressing in step 5 maybe?

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3

Very long term step 5 unfortunately, I have 2 loans 5 (started last year) and 10 years (started this year) :frowning: I’ll have to pay attention when the first finishes because from what I understand, to change bank without fees, I need both loans to finish at the same time.

4

Most banks will accept you if the mortgages aren’t more than 18 months apart. So I’ll probaly make a SARON mortgage in 2024 and start switching banks in 2029.

5

My mortgage is with UBS and the conditions are negotiated were good for that moment in time. The only thing I did wrong is my own fault for fixing 2/3rds for 9 years and 1/3rd in libor instead of going full libor. The libor contract rolls every 3 years so they will end at the same moment. Then I’ll be doing some hard bargaining :slight_smile:

6

Just say that bank/insurance Y offers you rate X and you’ll get it too, as long as it’s realistic. So no need to change banks. They’ll charge you 300 CHF per mortgage that you want to cancel.

7

How bad can they be? These days rates are super low.

8

I’m not unhappy with the rates, historically it’s very good (5y@0.89 + 10y@1.11), what annoys me are the fees here and there and the website. I’ll be sure to check with Mustachian in…9 years :smiley:

Next big step is IB.

Thanks for the feedback.

9

I am curious: what fees are we talking about? I don’t remember paying any fees to open a mortgage and I did not pay any fees now when extending the first tranche. I am with PF though.

10

I went back to study it, most of them I understand now…Only “Frais de bouclement at the end of the year” is annoying.
Again, I’m very happy to have ~1% interest rate, historically speaking.

→ Now that’s set, I have to focus on things I can change :slight_smile: I’ve created an IB “demo” account.

11

I wanted to post an update to the original post. Some tasks took longer than expected due to pandemic but now, here is my status:

1. Close the account in France :white_check_mark:
2. Create Neon :white_check_mark:
3. Replace Cler by Zak :white_check_mark:
4. Create Frankly and transfer funds :white_check_mark:
5. Extra: invest (LS) in VWRL :white_check_mark:

Notes:

  • After reading quite a lot, I changed my “invest plan” to Lump Sum for Frankly. BCV blocks for 6 months the transfer, so I was able to transfer 80% of 3rd Pillar (immediate transfer from Cler)
  • I gave up on IB. I know “everyone” here loves IB but I’ll stick with TradeDirect. I’ve had problems with my account, IB didn’t get back to me (or only after days, with no solution to a known problem). Plus I don’t like it’s not swiss. I don’t have any problem with TradeDirect, it works well and yes I pay more but voilà.

Now my net worth is split like this:
2nd pillar: 17.7%
3rd pillar: 19.3%
Stocks/ETF: 39%
Property (worth-debt): 17%
Cash: 7%

I’ll continue to follow up this thread.

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12

Swiss brokers are weird, on their website they advertize themselves as having low fees, but wow that’s indeed expensive (44 CHF for 10k on US markets, it probably costs them like 2 CHF…)

13

Congrats Denis for your investment strategy. You are doing well by being investing on stock shares and keeping 7% cash only.
Even after years of investing I still keep to much cash stack (25%)

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14

So, after a bit more than a year I’m coming with updates.

First, I have to say I’m happy I spent some time to research and educate myself with investment strategies, existing products, psychology in investing, etc. It’s just a shame I had to wait my 40’s for that, we should learn it in school! I’m also shocked how few people know anything at all.

Thankfully, I didn’t start “from scratch” as I had fundamentals of managing a budget thanks to my parents - didn’t buy a brand new Mercedes with a leasing on my first payslip :smiley: I also built my 3rd pillar regularly.

So now my situation is:
3rd pillar: Frankly 95: +35%
Investments: +30% (biggest position vwrl)

This is the way! Thanks for the help :+1:

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15

Here we are, a bit more than a year later and like everyone we suffered a little dip since last year :slight_smile:

Our financial situation changed drastically now because we have to pay childcare (crèche). Moreover, from around 2’100, we had an increase to 2’600 due to “a revision of the rates in our commune”. And that’s for 1 kid with 166k gross salary for the household. I find it completely insanely expensive, my savings rate is now close to 0.

16

Yeah, these are prices for 5 days per week child care (?). You (parents) may consider working less to spend some days with your child. And once your child goes to school, it will be cheaper.

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17

That would obviously make sense but unfortunately not possible.

I also don’t get why our commune is more than 20% more expensive than Lausanne.

18

Wow shocking.
I can’t imagine the price for childcare in Geneva where I live.

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20

I think it is similar in GE if you get a subsidised, public crèche

( not to take us off topic but I remember reading a report from my commune and the cost to run state crèches was > 40k per kid/yr. There is a mandatory high ratio of staff to children plus rent, the crèche director, accountant, chef…)

21

It is indeed expensive, but across CH I consider ~2500chf/kid to be more or less the norm and “expected” (disclaimer: I don’t have kids, I just heard the number several times around).

Would you be willing to share your expenses breakdown, maybe there are optimization opportunities that can be identified?

Rough back of the envelope calculation:

  • 166k gross income
  • 25-30k taxes (according to generic tax calculator)
  • 31k childcare
  • ~25k mortgage (potentially oversized)
  • ~12k health insurance (guessed 1k/month for 2+1)

Would leave roughly 70k (5.8k/month) for everything else (incl. savings).
Is Vaud really that crazy expensive for everything else?

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