As mentioned last week in my introduction, here is my story so far.
For those that did not read my initial post, I am 40, an Indian national, on a C permit and living in Basel Stadt (and by extension, Switzerland) for the past 10 years. By profession, I am an IT project manager.
I live with my gf (Swiss) who has just started working. We plan to get married next year, start a family in 2020 and buy a detached house/apartment in Basel Land in mid-2022. I plan to reduce to 80% at work beginning of 2021 (and gf to 60% beginning of 2021) once we start a family. That will reduce our incomes.
I am currently saving around 52% of my net salary (post compulsory deductions and taxes). This equates to around 50 KCHF net savings a year.
I welcome any comments or suggestions to optimise my savings/portfolio and appreciate your time and effort in reading this.
As of 1st May, the current NW figures are as follows:
Current total NW: 646 KCHF
Indian assets: 426 KCHF (breakdown below)
Swiss assets: 220 KCHF (breakdown below)
I will get an inheritance of 100 KCHF from my parents, however, am not including the same in above numbers as they can change their mind.
Indian real estate:
Apartment 1 in India:
Market value: 148 KCHF, Cost price: 49.8 KCHF, Purchase Date: May 2007. No outstanding mortgage.
Apartment 2 in India:
Market value: 147 KCHF, Cost price: 108.3 KCHF, Purchase Date: Jan 2012. No outstanding mortgage.
My parents live in Apartment 1. I do not take any rent from them, but help them financially with their annual expenses.
Apartment 2 is a slight problem. My parents use it as a vacation home for 3 months in a year but the rest of the time, it is empty. We tried to get a tenant, but it is difficult to get someone to rent for 9 months of the year. So, it lies empty for 9 months in a year.
Indian mutual funds:
54.8 KCHF market value, invested in a combination of large cap, multi cap, small cap, hybrid (debt-equity balanced), and equity arbitrage mutual funds.
Currently, I invest 1,000 CHF into the Indian stock markets every month via the above mutual funds.
I evaluate the funds every year and replace funds which haven’t performed well in the past year.
Indian Fixed deposits in banks:
40.8 KCHF maturity value of various fixed deposits in Indian bank accounts earning a blended rate of 7.5 % risk free interest p.a. The maturity dates are spread between 2019 and 2020.
Indian savings account in banks:
13.4 KCH in savings account earning 4% interest. I use this money to invest monthly in the mutual funds.
Indian recurring deposits:
2 KCHF in recurring deposits earning a risk free interest of 6.5% p.a.
Indian government pension fund:
20 KCHF earning a risk free interest of 8% p.a. The money is locked-in for 15 years (somewhat similar to Pillar 3A)
Total Indian Assets: 426 KCHF
100 KCHF sitting in cash in a bank. This is the biggest regret as of now and one I am trying to rectify asap.
My work permit was cancelled in 2016 and I was asked to leave Switzerland in a month. While I somehow survived (long story), it left me quite paranoid and as a result I’ve hoarded cash in the last 2 years of savings.
After reading the forum and various FI sites, I have opened accounts on Swissquote (earlier) and recently, Degiro and have begun investing around 8 KCHF every month to get rid of this 100 KCHF (after accounting for 6 months of living expenses). I have read on the perils of dollar cost averaging but am still apprehensive on sinking the entire 100 KCHF stash into the markets at one go.
Pillar 3a account in a bank: 22.8 KCHF
Pillar 3a account in a life insurance (biggest mistake): 13.5 KCHF – most likely will not get a penny of this when I cancel this month.
Pillar 2 assets so far: 80.5 KCHF (it is quite low considering I have spent 10 years here and thats because for the first 8 years, I was on a short term deputation permit which allows the company to only contribute 50% less than the usual required amount by age.
Apartment deposit: 3.2 KCHF
Investments in Swissquote and Degiro so far: 14 KCHF market price
Total Swiss assets: 220 KCHF
My current investing strategy is as follows:
Get rid of the 100 KCHF cash by investing in low cost Vanguard ETFs thru Degiro (8 KCHF every month, no more than 1 year). I am a buy and hold investor.
From my salary, put aside 3.3 KCHF every month as contribution (gf contributes 1.65 KCHF) towards down-payment for buying a house/apartment in 2022
Expectation is that we will reach 200 KCHF by end of 2021.
My goal is to reach 54 and be in a position where I can follow my own interests. I am open to working also at that time, but definitely maybe 20-40%.
Long term plan is to retire in Spain or Portugal (although gf wants to stay in Switzerland)
Your opinions, suggestions, questions, guidance are most welcome. Thanks for reading.