My review of Degiro as a broker for Swiss investor

Posted on Categories Broker, ETF, Investment, Switzerland2 Comments on My review of Degiro as a broker for Swiss investor

(This post was first published on Mustachian Post. Thanks a lot to MP for the opportunity of guest posting.)

I’ve now been using Degiro for about four months. It’s now time for a review of the tool.

I would like to mention that I never tried any other broker. I decided to use Degiro four months ago based on costs. Moreover, I’m a computer scientist, so no issues with potential tech issues. Finally, my portfolio is very small, so my experience may not compare to yours.

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Degiro updated its Cash Funds structure

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DEGIRO just updated a few things about the cash you hold in your account.

Since Netherlands investment firms are not permitted to hold cash, Degiro invest the cash from your account in a money market fund. There is a separate money market fund for each currency that you can hold with Degiro. Money market funds are principally investing in government bonds, with very high quality. However, the interest rates are very low and even negative for many European countries. Therefore, some money market funds, such as the EUR or CHF cash funds, have a negative interest rate.

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Changed the accounting of my life insurance

Posted on Categories Budget, Investment7 Comments on Changed the accounting of my life insurance

In Switzerland, the third pillar of retirement can be either in a bank account or in the form of a life insurance. This is a special form of life insurance. You will get some part of your capital back at the retirement age (65 years old currently). In the case you die, your spouse will get the capital. Moreover, most of these insurance policies also cover the case where you can’t pay anymore. Not if you stop paying, of course. But if you become handicapped or unable to work. In this case, the insurance will cover your fee while you can’t work.

I’m not sure this is a good deal for everybody. But it’s a good deal for me. My future spouse does not yet work and will not have a full retirement pension once she retires. Thus, if I pass away, she will have a good cover from my life insurance. For some people, it is also a good way to force them to contribute to their retirement savings.

I pay 300 CHF each month for this insurance. Until now, I’ve always counted that as an expense in my budget. But, it is not really an expense. It is similar to the payment I do to my bank third pillar. And I don’t account for these as expenses. This is investment. So, I decided to remove this recurring expense from my budget. Since we are close to the beginning of the year, I also decided to remove it from January 2018 and February 2018. This means that my savings rate is better in these two months. It is now 33% in January and 4.2% in February. I will update the Savings Rates shortly.

However, my Net Worth does not get better since the current value of the insurance is 0 CHF. If you take out the insurance in the early years, you lose everything. In fact, I will start accounting the insurance as Net Worth in September 2018. This makes my accounting better and more accurate.

What about you ? How do you account for your retirement life insurance ? Do you have one ?

Updated ETF portfolio for Switzerland – Bonds and Dividends

Posted on Categories Broker, ETF, Investment, Switzerland18 Comments on Updated ETF portfolio for Switzerland – Bonds and Dividends

In 2018, I wanted to add a few bonds to my portfolio. Since I’m in long-term investing, I don’t need a lot of bonds. But I wanted to add 5% of bonds into my portfolio to be safe and to allow for more re-balancing opportunities. Also, I do have bonds in my third pillar account. Moreover, I also wanted to get rid of my crypto-currencies. So, I updated a bit my previous portfolio to reflect this. Moreover, I also wanted to depend less on the dollar.

This is what I settled on:

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Book Review: Rich Dad Poor Dad

Posted on Categories Books, Investment5 Comments on Book Review: Rich Dad Poor Dad

Rich Dad Poor Dad Book Cover

The most recent finance book I’ve read is “Rich Dad Poor Dad” by Robert T. Kiyosaki. This is my short review of the book. This book is very different from the others, in several ways. Generally, the personal finance community does not rate this book very high. In this post, I’ll give you my point of view about this book and tell you what it’s all about.



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Book Review: The Bogleheads Guide to Investing

Posted on Categories Books, Investment3 Comments on Book Review: The Bogleheads Guide to Investing

Bogleheads Guide to Investing CoverHere is another book review about an investing book. This is the second book I read in my way to personal finance enlightenment: The Bogleheads Guide to Investing, by Taylor Larimore, Mel Lindauer and Michael LeBoeuf.

This book is a complete guide about personal investing, how to save money and how to invest it. I think it’s a really good book, well-written and full of very good advice. The book is full of quotes from other financial figures and uses facts to support every argument.

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Book Review: The little book of common sense investing

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The little book of common sense investing book cover

Since I started to pay closer attention to my finance, I’ve read a few books about investing and finance. I’m going to review them on this blog.

The first book I have read is “The little book of Common Sense investing”, by John C. Bogle. It is coming from the founder and former CEO of the Vanguard Mutual Fund Group. A lot of people in the bogleheads community are recommending this book, so I decided to give it a try.

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First deposit at DEGIRO and first ETF investment

Posted on Categories Broker, ETF, Investment3 Comments on First deposit at DEGIRO and first ETF investment

After having opened my DEGIRO account recently, it was time to use my DEGIRO account. My first deposit reached my DEGIRO broker account! Let’s start with the good, there is no fee for transfer! I’ve transferred 1000 CHF and exactly 1000 CHF arrived in my account. I was afraid of a hidden fee or transfer fee.

With the bad now: The transfer took 8 days. I sent the transfer Friday 17th, the bank debited it from my account Monday 20th. It only arrived today, Tuesday 28th on my broker account. I’ve contacted DEGIRO several times in the meantime to ask about the whereabouts of my money. They did have an issue with their bank (CIC Bank, Basel). The bank was not transferring the money statements to them for about a week. So, normally, this should not be so slow. I’m inclined to give them the benefit of the doubt for this one. I’ll see what happens to my second transfer. I sent it yesterday and it should arrive tomorrow on my DEGIRO account. If this issue is something that happens regularly, this is really bad thing for DEGIRO, but we’ll see.

With some part of this money, I bought 13 shares of Vanguard Total World Stock ETF (VT) at 73.16 USD. This ETF is a passive fund that holds 7955 stocks in the entire world, weighted by capitalization. It contains around 50% of the stocks from US and the rest is from the entire world. The fund contains 2.6% of stocks from Switzerland. It has a very low Total Expense Ratio (TER) is 0.11%, which is very low and absolutely fine for me.

Since this ETF is in the list of free ETF offered by DEGIRO, I didn’t pay any fee to buy the shares. Nevertheless, I paid a small fee for the currency conversion. I paid 0.19CHF on an order of 936.80 CHF, which means a fee of 0.02%. This is pretty good since I was paying around 0.5% fee for funds on PostFinance 🙂

The buy was pretty easy do on DEGIRO, no issues here. At first, not very clear, but it turned out quite OK. I’ll post more information on the future on how to use DEGIRO. I received a mail notification for both the deposit and the trading transactions. Everything seems fine.

I’m not totally sure on my final portfolio, but VT will definitely be a part of it and probably a large part at that. I’ll keep you up to date as soon as I update my portfolio.