What's best to do with euros sitting around

Investing / Portfolios
22

I don’t know what you should do or what will happen, but I can tell you what I did.

I sold recently >77k EUR in CHF and USD because I was tired to see the exchange rate dropping year after year , even though I had an account @ 2.5%.

I sold almost everything (rate around 1.038: just before the war)
→ I kept 3-4 k for vacations and triathlon training camps in the eurozone that were coming and planned
→ 5-6 k in BTC / ETH
→ I sold all the rest in CHF and USD . (I didn’t want to go above the 50k CHF limit on IB , all the rest I sold in USD . Since I already had CHF cash i can’t tell you the exact ratio)
→ I invested 20-30 % already in Swiss and US ETF and will do the rest later this year

I could maybe have sold my EUR progressively but I wanted to stop watching the exchange rate . Just to be done with it.

I don’t know if what I did is any good but personally I am satisfied.

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23

If you mean by “inflation” the consumer price inflation, it’s the other way round: when new money flood the market, first house (at other asset’s) prices begin to climb, then eventually consumer prices join the party. It’s called the Cantillon effect.

24

Interessting comment, I had to google the Cantillon effect. As far as I understand it, it doesnt necessarely mean what you stated. My understanding of it is, that those who can access the “new money” first, will profit the most. Dependent on the spending of those “ealry receiver”, house prices might increase, decrease or remain the same.
In addition, inflation is measured by the CPI, but their cause are explained by different economic views/theories (monetarists vs. keynesians).

25

Exactly. And you see that effect well in real estate and stock prices since 2009. The rich know how to profit from the new money. Later, the poor get the bill when buying food (it’s clear now at least in the USA).

26

We are about to buy a property in the Eurozone and need to transfer CHF to EUR. the timing is right now but looking at different options to convert CHF → EUR I am undecided between Wise and Revolut. I haven’t used either and they look like the 2 best options. Any experience or recommendation?

(looks like I’d need a premium account in Revolut to transfer large amounts)

27

Interactive Brokers…

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28

hmmm never thought about that. so the flow would be:

  1. from my CHF bank account to IB in CHF
  2. convert from CHF to EUR in IB
  3. transfer to my EUR bank account in country of destination

any challenges expected on step 3 since IB does not know this account? Any additional KYC processes that would cause delay?

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29

The destination account should be in your name. Otherwise no problem expected. You can try with a small amounts first.

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30

I did it many time and it is the best spot rate and lowest exchange fee (2usd for 25 k).
You will save 150-200 usd compare to Revolut premium for a lot of 25 k.

31

Hello dear Mustachians,

I’m lucky enough to have my parents donating me around 500K € from their savings.
What should I do with 500K€ in my bank account?
The idea is to use them as a down payment to buy a house here in CH in the next 2 or 3 years
What worries me is the FX rate, what is the best approach.
Should I change smaller amounts every month?

Thanks

T

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32

I would exchange the entire amount in CHF :slight_smile:

Now the question is where you should do it? IBKR (cheap), Traditional bank (expensive), others?

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33

Thanks for the info, I’ll look into ibkr,
The question is more, should I do it all at once or in split it in multiple times to minimize the impact of forex fluctuations?

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34

Change them to USD and invest in VT? :grin: :face_with_hand_over_mouth:

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35

If you search for “EUR” in the forum, you will find many threads where very similar questions were discussed.

But personally I decided to not keep any foreign currency in an amount higher than I need in next few weeks, for investments or a vacation.

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36

Unless you want to invest in Swiss assets, I think a bit more diversification would be beneficial.

37

Remember that both your parents and you have to do a tax declaration, even if you do not have to pay taxes for Erbvorbezug from parents. As a result, you may have to transfer all at once.

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38

Just providing an update here. I followed the IB path and it worked well. Best rates even if it takes longer than Revolut or Wise. Definitely worth it for large amounts and if you plan it and are not in a rush it is the best option

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39

Hello, long time reader of the blog here, but first time I’m writing in the forum!
I’m in a somewhat similar situation as the OP. A few days ago I got around 700k EUR from selling shares of a startup I was an early investor of.
My medium-term plan would be to invest part of the money in ETFs like VT or CHSPI, but at the moment I don’t like how the charts look. I know, maybe I should ignore the charts and just begin to invest, but even so, my strategy would be to dca and in the meantime I’d need a home for the money, possibly without negative interests and with a State guarantee. That’s why I already put 100k EUR on yuh and 100k EUR on Flowbank.
Short-term I’ll use some money to renovate my house and maybe to lower the mortgage if the interests are too high at expiration (one 300k tranche expires in two years).
My first question: what would you do with the EUR? The EURCHF chart looks quite bad right now, having touched the all time low, which could mean it will continue going down (if the SNB doesn’t step in at some point).
Second question: where would you put the money to avoid the negative interests? I could transfer them to my Swissquote account, which just canceled negative interests on EUR accounts, but I’m wondering if there are safer solutions (for example a low-fee Cantonal bank with State guarantee).
Maybe changing some EUR to CHF wouldn’t be a bad idea since it would be easier to spread the money into multiple low-fee 100k accounts (Neon, Zak, etc.), which would allow me to both avoid negative interests and lower risk in case of bankruptcy. But I would hate for the EUR to go back to 1.05 CHF after converting it :smiley:
Thanks in advance, looking forward to your insights!

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40

Congratulations !
It is good to secure some money.

Converting euro in chf as this rate is painful to me as I new the rate of 1,65 chf for 1 euro 11 years ago.

As an alternative, you could DCA on VERX the Euro Stoxx 600 version of vanguard quoting in euro and distributing euro dividend.
You could then convert your chf to usd and invest into VTI to be exposed to the US.

41

If you don’t intend on leaving Switzerland in the next few years, I would convert it to the local currency, at least the part you don’t want to invest right now. Otherwise you’re speculating on currency, which is also fine if you have a specific reason to do so, but that doesn’t seem to be the case.

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