I had the opportunity of interviewing Patrik Schär, the CEO of Selma Finance. For those of you that do not know, Selma Finance (Selma) is a Swiss-Finnish Robo-Advisor company. It is a young company. Patrik founded it, with three other people, in 2016.
I have not yet talked about robo-advisors on this blog. However, they are getting more and more popular. The idea is that you can get smaller fees by automating most tasks, hence the robo-name. And it is much simpler than investing by yourself. It provides a good entry point into the investment. And Selma is a great option for those that would choose that route!
First, Selma is different from a bank in that it is almost entirely automated. It has lower fees than a bank. It gives you a personal investment assistant that can assist you all the time. Another cool thing with Selma robo-advisor is that they follow passive investing philosophy, reducing the fees and following the market performance.
But enough from me, Patrik Schär, the CEO, will tell you everything there is to know about Selma!
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Marc Pittet, or Mr. MP, is the author behind the blog MustachianPost. Last year, he started the project of writing a book about becoming Financially Free, or Financially Independent, in Switzerland, by the age of 40. Today, I am interviewing him about his new project, Financially Free by 40, in Switzerland.
Financially Free by 40, in Switzerland is a book about retiring early in Switzerland. This is something difficult because Switzerland is one of the most expensive countries in the world. Moreover, there is very little information on how to retire early in this country. This is something that Marc Pittet wants to change!
Thanks a lot to Marc for answering my questions. As you will see, he even provided us with some exclusive information about the book and about his journey to Financial Independence! In the interview below, things in italic are my comments and the rest is all answers from Marc.
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Since the beginning of the year, I cannot buy Exchanged Traded Funds (ETFs) domiciled in the United States from my broker, DEGIRO. Since my current portfolio is mostly invested in Vanguard Total World (VT), this is a big problem for me. I can now only sell these ETFs, not buy them anymore. That means that the next time I will have some money to invest, I cannot invest it anymore as I want. This is bad news for Swiss investors.
This is due to new regulations that will come into play. These regulations already affected all European investors since 2018. But Switzerland was not affected before. We are going to see what changed. This is based on several European and Swiss laws. These laws are sad news for European investors and Swiss investors. I am not a legal expert at all. So this is only my interpretation of these laws. If I am wrong or I missed something, please let me know!
In this post, we are going to see why this is happening. And we are also going to see what are the different options for us. There are several possible solutions to this issue. But none of them is perfect as we will see.
Continue reading “Swiss investors will lose access to US-domiciled ETFs”
In Switzerland, you can do a voluntary contribution to your second pillar. The second pillar is the Swiss equivalent of a 401(K). These contributions come with some tax advantages since you can deduct that from your income. Therefore, you have a return equal to your marginal tax rate. However, the money is then blocked into the second pillar. And the returns on that blocked money have been very low in recent years. Finally, you can only withdraw the money from your second pillar if you retire, if you buy a house or if you start a company.
One question that I actually ask myself these days is whether I should contribute money to my second pillar or continue investing in stocks. These days we are able to invest enough money each month that I am wondering about this. I could contribute some money to my second pillar and continue to invest enough in stocks. But is it a good solution. In this post, I am going to try to answer this question.
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I recently compared the different third pillars available in Switzerland. I quickly came to the conclusion that VIAC provides the best third pillars in Switzerland. VIAC third pillars are cheap and have a very good global diversification. Moreover, you can have up to 97% of your portfolio invested in stocks. Before, my only problem with VIAC was that they are mobile-only. But I need to go over this small problem and be smarter about it! And since PostFinance increased their fees, I decided to walk away from them earlier than I planned.
Now that I have chosen my new third pillar, it is time to do the transfer. For this, I first have to open an account at VIAC. Then, I have to transfer my existing third pillar money from PostFinance to VIAC. In this post, I am going to describe the steps necessary to open a VIAC third pillar. In a second time, I am also going to describe how to transfer an existing third pillar to VIAC.
As you will see it is incredibly easy. If you think it is difficult to open a new third pillar and transfer your existing third pillar money on it, then I hope I will convince you that it is trivial! You should not delay changing a bad third pillar for a good one by the fear that it is difficult. Because it is not!
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You may have read that I am using DEGIRO has my broker. In fact, I chose DEGIRO mainly because of its very low fees. I am very satisfied with my experience with DEGIRO. I have not had a big problem since I started using it, about a year ago.
Interactive Brokers is also a very popular broker. It has been there for much longer than DEGIRO who is a very young broker. And it also has very low fees. When I chose DEGIRO over Interactive Brokers, I did it because I thought it was cheaper.
In this post, we are going to compare once again DEGIRO and Interactive Brokers. I am going to do the comparison in details including the two different account types of DEGIRO. In the default account of DEGIRO (Basic), your shares can be lent to other investors. This is not something that is done by default with Interactive Brokers. Therefore, my previous comparison was not very fair! This time, I am going to try to make it better.
Continue reading “Is DEGIRO really cheaper than Interactive Brokers?”
Our food budget is something that we are managing to keep quite low. Last year, it was still too high. So I changed some of my habits and how we manage to keep our food budget around 400 CHF on average. For two people. This may seem high. But for Switzerland, I think it is quite reasonable. And several months we are quite lower than this. It is the months we are inviting many people over that are increasing the average.
To reach this low food budget, we are doing several things. And by following these simple tips, you can also keep your food budget low! Mainly, the idea is to compare several shops and only shop where you can get the best bargain. If you want to go all the way, you should compare each shop for each product. But who got the time? The idea is more to select one cheap shop as the main shop and then buy some cheaper things in other shops but less often.
So, in this post, I am going to list 7 simple things we do, and that you could do too, to keep our food budget low.
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My third pillar is invested at PostFinance in the PostFinance Pension 75 fund. This is a fund that invests mostly in Switzerland, with 75% of stocks. It is not a bad fund at all. However, a few things made me want to reconsider this third pillar.
First, the TER is a bit high. You pay 0.98% for holding this fund. It is not really bad since TER for retirement funds in Switzerland is quite high. This is already one of the best funds. But it is always better to reduce that TER even further when possible.
Secondly, PostFinance recently increased its account fees. Before, I was not paying anything for all my accounts at PostFinance. However, I will now have to pay 60 CHF per year to keep my money at PostFinance. Therefore, it is time to change. I am in the process of switching to Migros bank for my bank accounts. But I need to find a new third pillar provider to replace the one from PostFinance.
And also, it has been a while I wanted to study in details VIAC. This is a new provider of third pillars. It has some very interesting advantages.
In this post, I am going to try to find a new third pillar for me in Switzerland. Let’s see what Switzerland has to offer :)
Continue reading “Is VIAC the best third pillar in town ?”
I have used PostFinance as my bank for a very long time now. I have used it ever since my first pay, 14 years ago. For the most part, I am quite satisfied with it as a bank. I have a checking account and a few savings account on PostFinance. And I also have my third pillar on PostFinance. I was thinking of staying at PostFinance for most things except for my third pillar which I was thinking of moving to VIAC. However, it seems they decided otherwise.
Currently, I am not paying anything for my accounts. But PostFinance just announced that they are increasing their fees significantly (Source). Starting January 2019, I am going to have to pay 60 CHF per year for my account. This is not acceptable to me. The service will be exactly the same but for a higher price. I know this is not a lot of money. But this is the kind of things we should fight against. So I am going to change bank as soon as possible. In this post, I am going to discuss the new fees and the options I have as a new bank in Switzerland.
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I have lived in a small village all my life. Actually, I have lived all my life inside the same village. And I do not really want to change this. A lot of people find this very surprising. Today, we are going to discuss why anyone would want to live in a small country village.
For me, there are too many advantages of living in the countryside and especially in a small villages. Of course, there are also disadvantages and some people may not like it. But for me, it is great :) In this post, we are going to focus on the main reasons why I love living in our small village.
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