Sharing my investment story as a 29 year old – Feedback appreciated

Hi there,

Long time lurker of Mustachian Post here.
I don’t have a particular questions to you all – feedback is always appreciated thought – but would rather just share my story.

I’m 29, single and work as a web developer (current net worth CHF ~240’000).

Through my parents I learned to live frugaly, don’t overspend on meaningless stuff and to keep a good eye on your finances.
I’ve been following the FIRE-movement for quite some time now, but never actually worked towards a FIRE-goal myself. (I enjoy my work and honestly don’t know yet what to when I would retire with 40)

This view changed in 2019. I’m still not persuing the goal of FIRE, but I would like to work less in the future.
As the interest charges are so abysmall low, I’ve got interested in investing. I see it as the most stable way to grow my wealth over the next 10-20 years years.

So near the end of 2019, I created an account on DEGIRO and started investing a small amount of money into stocks.
I primarily bought shares of Apple and Tesla and sometimes invested in an ETF. (I was naive back then and didn’t have much of a plan. Today I would act differently)

I then set up a monthly bank transfer to automatically top up my DEGIRO account. First with CHF 500, later with CHF 1000 each month. I’ve invested further in some stocks but more and more into ETFs.

During the summer months of 2021, I thought to myself, that I should take this more seriously. I’ve re-read some Mustachion blog posts, read other blogs and Reddit threads and read the book “Souverän investieren mit Indexfonds und ETFs” by the author Gerd Kommer.

Reading the book was the final nudge I needed and I started to plan my investment strategy for the coming years: In addition to the monthly contributions, I want to invest 50k this year into ETFs.

As I can’t transfer so much money in a single transaction, I’m stretching it out over a couple of months.
Right now, I’ve invested 30k of my planned 50k this year. The remaining money will be invested later this month and in November.

75% of my investments are in the following 3 ETFs:

  • Vanguard FTSE All-World High Div Yield (IE00B8GKDB10)
  • Vanguard FTSE All-World UCITS ETF USD Dis (IE00B3RBWM25)
  • Vanguard S&P 500 UCITS ETF USD (IE00B3XXRP09)

The rest are shares of tech companies I bought early in 2020. I will probably sell a couple those over the next few months and reinvest the money in ETFs.

I’ve also transferred my pillar 3a to VIAC. I previously had a single 3a pillar account with my bank, but the money got not invested and just sat there. As interest rates are low, the yearly gains were low too.
I’ve moved my previous pillar 3a account to VIAC and chose the 100% stocks option to invest it in.
I then also created a second account, which I began topping up this year. That account uses the 80% stocks strategy.

The stock market is currently in free fall, but the interest rate on my new “80% stocks option” account has been great so far: 8.3%.
The transfer of my big account that uses the “100% stocks strategy” has only recently been completed, so there hasn’t been much movement yet.


Overall, I’ve been quite happy with my financial decision here. I’ve learned a lot about the stock market and ETFs over the last couple of months.
The only bad habit I picked up, is that I check my portfolio too often. I then get the urge to do something to “save” my profit. :sweat_smile:

As mentioned in the beginning, my net worth is currently at ~240k. Currently, 45k of that is invested in DEGIRO (30k + 15k from monthly top ups) and ~50k is in my pillar 3a at VIAC.
I now wonder, if I should invest additional money next year (maybe 20k) – or even invest more so that only my emergency fund is in cash and the rest invested.

Would love to hear your feedback on this.

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Welcome!

Any particular reason for picking those ETFs? (esp. the high div yield which probably is the least favorable tax wise, given dividence are the worst for swiss investors, and here you’re taxed by both US and CH for the 40% of US stock in the ETF, that’s like a 0.5% drag or even more right? you’d need a really good thesis on why they’ll outperform)

Depends on the time horizon. I would invest everything in stocks for 10+ years. Otherwise it’s just excess liquidity.

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I can’t find any notes, why I picked the high div yield ETF. :confused:
I guess I was looking for free ETFs on Degiro that are managed by Vanguard and looked promising back then. (Somehow it got into my head, that Vanguard are the good guys and I should only invest in ETFs from them)

I was really naive back then and didn’t do the proper research. Especially the whole tax thing was the reason why I wanted to share my story here. So really appreciate your feedback here.


I’ve picked the “Vanguard FTSE All-World UCITS” ETF based on this blog post:
https://www.mustachianpost.com/how-to-buy-my-vwrl-etf-on-degiro-for-free/

The S&P 500 ETF was picked, as I wanted an ETF that mimicks that index.

Will definitely review my ETF picks before I make my next investment all course correct existing investments.

I would go to Interactive Brokers. Vanguard Total World Stock ETF (VT) is superior in every level to those ETFs which are available in Degiro.

FWIW, it also doesn’t make a lot of sense. SP500 is something like 40% of all world? Or maybe you have a thesis for heavily overweighting US large cap?

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I don’t have a big thesis here.
Just what I thought would make sense (I’m still a novice in this field).

So would you suggest to just invest in a single All-World ETF and forget about it?

Exactly. Any other allocation (overweighting dividends, the US market, tech stocks etc.) should require a strong argument. If you don’t have one, just aim for a neutral allocation (Vanguard FTSE All World in Degiro or Vanguard Total World Stock ETF in IBKR).

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I support the answer by @Cortana. Vanguard all-world has over 9000 single stocks, so there is a huge overlap with the other ETFs you purchased. @1000000CHF pointed out that VT (or VWRL) has underperformed against the S&P 500 almost consistently. But as we Mustachians do not want to stockpick, we should be happy with a broad index that should bring a steady but unspectacular return in the long run. (I don’t follow my own advice and have multiple single-stock and industry ETFs, to spice things up ;-))

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Even if the USA outperformed the stock market since our childhood, it is still possible that some day it won’t be the leading country and end up in a deflation trend like Japan.
That is why it is better to be optimistic and very bullish on the World (all countries) rather than picking only the best performing country.

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my thesis for going SP500 instead of VT is that SP500 are the most successful 500 companies vs the multiple thousand of bad companies added to that mix in VT. Why would I want to track the bad companies?

The SP500 is not US-only. Even though these companies are listed on the US Exchanges, they all work globally, their exposure is not overwhelmingly US-only.

So if you say the US economy might have a problem, that will be a problem regardless. SAP will suffer just as well as Siemens or Novartis, even though these companies are not listed in the SP500. All of the big companies are getting a global revenue stream nowadays, so they are not really different at the end of the day.

The SP500 does have a survivor bias built-in, though. VT/VWRL buys a lot of “bad companies” on top of the SP500.

Good job. I wish I was that disciplined at 29. (actually I was, I already had two flats and a well-earning job :smiley: )

Two points to add:

  • stocks are not the savior of everything. Diversify your portfolio into real-estate (as you see fit), bonds (your BVG is perfect here) and maybe keep cash as well when that well-overdue large correction comes. You still have 30+ years to retire officially, so the crashes in the near term will not impact your overall performance a lot, though, but it’s good to have gunpowder dry when they happen. Look at buying your own place, look at obligations (crowdlending?), etc.
  • you’re still young. Go travel. Experience the world, take long breaks between jobs and experience different cultures on your skin. Yes, it does dent your FIRE portfolio, but money is not everything and there is a lot of good exposure on a 2-month Asia/LATAM/East-EU/Siberia/US trip (you name it).
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So why not only QQQ?

Most of the constituents have international exposure and an economic crisis or downturn in the US will be felt in other economies.

That said, there are jurisdiction-specific risks and it’s not as if S&P500’s constituents were all wonderfully globalised…

Picking out 10 of the 50 biggest constituents…

JP Morgan
UnitedHealth
Home Depot
Bank of America
Comcast
Verizon
Costco
Walmart
Wells Fargo
NextEra Energy

…can anyone here say he’s ever been, directly or indirectly, a Europe-based customer of these companies?

Even for the supposedly “globalised” companies, figures can be be quite lopsided: While Apple’s makes only 45 of its sales in the Americas (North & South), for Salesforce that figure stands at 69%. For Amazon, 61% of revenue comes from North America only. AbbVie’s makes 76% of its revenues in the United States only.

If you really worry about that, you’d still be crazy to invest more than 50% of your investment into one country, like you do with the “All-World” funds propagated here. (though there may of course be good reasons to consciously overweight US companies).

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I’m hard in VGT :slight_smile: could be QQQ as well. Technology is what makes the world tick, and it’s a long way to saturation, still.

That has always been the case, yet new techonolgy has also been a bad investment most of the time.

What you call crappy small companies have outperformed large cap companies by 4-8% per year in the US over the last 60 years.

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Classic recency bias and performance chasing.

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SP500 is not the most successful companies. SP 500 is set of largest companies, and it does not necessarily mean the largest 500 are good “investments” vs the second largest 500 or small caps.

@wnox well done investing in broad based funds in a disciplined way at a young age. I wish I would’ve done the same. The choice of ETF can always be optimised

If one is going for this approach, why not consider Quality investing?

Here is a short article theorising why Quality investment approaches might have outperformed the market: “Tendency to Gamble… At horse races people have a known bias to betting on long shots with high odds, even though those horses are unlikely to provide a reasonable payoff given their very low chance of winning.”

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