long time lurker/reader here and have finally decided to move forward with getting my finances in order and would like some input.
Current situation:
28 year old German, moved away from Germany almost 5 years ago and here about a year ago for my PhD. At this point I do not have a defined goal to reach FI with age XY or to live as frugal as possible to save the most. I can comfortably live of my salary, do all the things I want to do (I do live quite frugal anyways) and still save a bit, but right now I do not feel the need to turn every penny. I think I am already pretty lucky with where I am and would mostly like to optimize my assets. I am not sure where in the world I will end up long term (how does this affect home biasing?), but could see myself staying in Switzerland.
Numbers:
salary: 50k/year
finpension maxed out 2022 and 2023 → 14k (75% World ex CH QUALITY BABY, 12% Small cap ex CH, 12% Emerging markets)
Inherited about a year ago at an account at Apobank: managed assets 390k in APO VV Premium Privat (apo VV Premium Privat|LU0395352460) and 10k in some other ETF
will get some real estate in Germany transferred into my name this year (tax value 300-400k)
My idea right now would be to:
Sell the managed assets (currently down 5% from when I got it, but it actually has never been up) and move it all to VT. I think I am fine with lump summing it all (I trust the statistics!) or would you recommend some sort of DCAing?
Once I have been away from Germany for >5 years sell WSRI and 10k Apobank ETF to 100% avoid capital gains tax in Germany. The 5 years seem to be potentially important because of the " Abwanderer-Regelung" in Art. 4 Abs. 4 of the German-Swiss tax treaty which, to my understanding, could mean that I might be taxed on capital gains now but not after the 5 years have passed (which would be the case in January 2024). Does anyone have experience with this?
Some more questions:
Taxation of the ImmoChance is somewhat difficult as they are “Personengesellschaften” that are taxed in Germany so it seems like I would have to file taxes in Germany as well. Would I need to put any other assets into the German declaration or can I just note that all other assets are taxed in Switzerland?
are there any reasons in this particular case why I should not go all-in on VT? E.g. to somehow homebias CH/EU? How would one go about this if unsure where I will end up in 10/20 years or to retire?
people have been talking about cash accounts in this tread: CHF accounts with best interest rates: discussion. From my understanding this is the same as “Tagesgeld”. There are currently options for “Tagesgeld” that give up to 4% on EUR. Is there any reason not keep the cash reserves there? Or are these only higher than what one would get at CHF accounts due to inflation and in the end there will most likely not be any benefits?
Would love for any feedback if anyone has any input on the many many questions I threw into this post
Thanks everyone for creating so much knowledge in this forum!
It’s less about statistics and more about managing potential regrets. If you think you can take a 50% drop in the coming year and still be more happy with your lump sum than you would be unhappy DCAing into a +30% year, then it sounds like an opportune scenario.
apo VV Premium Privat is 80% stocks anyway so you really only are reallocating 20% of it towards stocks.
They have a rather important bia toward the Eurozone though don’t seem to apply any material sector tilt. “Loosing” that Eurozone tilt is unlikely to make much of a change in lump sum vs DCA scenarios.
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If unsure, I would not tilt anything. You can switch your allocation later if you want to introduce a bia toward any specific region due to your personal life projects. Reasons to “diversify” outside of VT, for me, would be wanting less exposure to the US as a market (introduction of a regional bia), less exposure to the US as regulatory entities/government (use of a non-us domiciled fund) or introduction of a personal tilt toward some factor you’d want to pursue for some reason. The decision to do it, in my opinion, should be informed, so I wouldn’t do anything unless I have decided I actively want to do it, and I know why.
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If you are not spending in euros, that 4% interest rate is a bet on currency changes. I keep cash for my short term/liquidity needs and don’t want to have wild forex fluctuations applying to it (if I were willing to take risks with my cash, it wouldn’t be in cash to start with).
Edit: It is possible/probable that your future real estate in Germany will generate expenses in EUR, in which case, keeping the money required to cover them (and any potential tax liability in Germany) in EUR at 4% interest (or duration matched bonds) would make sense.
„Die Bestimmungen dieses Absatzes gelten nicht, wenn die natürliche Person in der Schweiz ansässig geworden ist, um hier eine echte unselbständige Arbeit für einen Arbeitgeber auszuüben, an dem sie über das Arbeitsverhältnis hinaus weder unmittelbar noch mittelbar durch Beteiligung oder in anderer Weise wirtschaftlich wesentlich interessiert ist.“
Even though you may, in your specific case, have moved for educational purposes, the intention is to target the filthy rich that would otherwise only (or primarily) move to Switzerland to lower their tax burden - not bona fide migrants moving for personal or professional reasons.
Do also make sure you check the relevant provisions of the German Aussensteuergesetz.
You mentioned you’ll receive German real estate this year.
Now, I know very little about taxation of real estate (in particular) but Germany won’t just let you own German real estate from Switzerland while not taxing you, will they?
That makes sense. Thank you for your perspective.
Also thanks for your words on tilting towards a certain direction. As I do not follow things or have the required in-depth understanding to tilt away from the US, VT seems like the obvious option.
I do keep some amount of cash in EUR and spend it occasionally (mostly when traveling, I have not looked into Swiss cc’s to for similar conditions as I get on my German one in and outside of the EU). So maybe I will just put the EUR reserve into Tagesgeld and will just get some of it if needed.
Well technically I am a employee, but due the uncertainty that there might be and given that it is only a few more months (and those 2 ETFs are also general “all world”) I think I am happy to wait until I am guaranteed to not be affected by that
Will do, thank you! There are so many different laws and regulations for different products/situations (see ICD issue), it really seems overwhelming and easy to miss things that might be important.
Yes, although I am thinking about the declaration for 2022. Additionally, my parents will still have the “Nutzniessung” (right to live in the place/collecting rent etc) so for now at least I should not get taxed for anything. Probably going to be a pickle with the Swiss tax declaration, especially since this will also be shared with my siblings.
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