Review of investment strategy + questions

[rakib]

@georgehay 1) Yes OK split but would suggest to remove S&P500 and keep only international VT (already includes 60% S&P500)
2) USD ETFs are good on IBKR. No point having CHF or EUR because the underlying stocks are already in USD for most. CHF ETF will not protect you from currency risk (unless it's 100% into Swiss SMI).
3) Yes
4) 100% VT ETF
5) This is also my strategy. 2nd pillar is 100% bond/fixed income with guaranteed returns 1-2% per year (but not much more)
6) This one is tough. Changing cantons can have a big impact
7) Third pillar in VIAC or FinPension with an all-stocks international allocation. Stay away from insurance-linked 3rd pillar.

Oh and one major thing to pay attention, right now you can save 4k per month but if you get kids, this will decrease a lot. So make sure to stash money now while you can.

Visit forum mustachianpost for more financial advice.

 

[georgehay]

@rakib Thanks for the clear comment.

yes, I count on saving more now as kids are expensive.

 

[zachj912]

@georgehay P2P landing has not produced much for me. I stopped

 

[georgehay]

@zachj912 I am still trying to see the advantages, started t o try for 6mo-12mo and then I decide. What kind of loans were you accepting? People were not paying the loans?

which platform?

 

[smta276603]

@georgehay Very similar to what I have. The only difference is that I don’t have p2p lending (I used to, and was disappointed; where do you do it?) and that my single stock part is smaller (I used to do it, I am bad at it).
Another small difference is that I have a small portion in real estate etf (REET), which tends to anti correlate with the stocks.

To answer your questions:
1. 85% broad stocks and 15% real estate is the combination that yields the highest guaranteed return over a 20 year horizon, based on the last 50 years of data. I think you are good.
2. No don’t care about that. Consider that only in fixed return stuff like bonds and lending.
3. It is considered a good one.
4. There should be super standard ones, they are equivalent as long as they are zero fees. I use SCHB, SCHF because I am on Charles Schwab
5. Yes, the pillar 2 will be your fixed return part. It’s too big now, in my opinion, it will be adequate later. Outside of the pillar 2 you can do full stocks until quite late, I am planning to switch to bond ladders and stuff like that basically at retirement.

 

[georgehay]

@smta276603 p2p in Mintos, but I just started, so no sure if I will keep it after the 6-12mo test

 

[smta276603]

@georgehay The thing with p2p is that a few bad borrowers can ruin the entire thing, the profit is so uncertain. And it’s kind of correlated with the general economy, because people stop paying when they lose their jobs, so it doesn’t really serve the purpose of guaranteeing a fixed return like a company bond would do (to some extent).
Maybe mintos has solved some of these problems, I don’t know.

 

[hrosec]

@smta276603 Is it possible for people with Swiss domicile to be on Charles Schwab? Or are you American?

 

[smta276603]

@hrosec Charles Schwab international is open to all. I am nor Swiss nor American, I live in Switzerland.
It works well for me, but maybe others are easier to open. When I opened it it was one of the very few that were offering zero fees on trades, now there are more.

 

[deserthiker24]

@georgehay Not financial advice but if the top positions of the S&P 500 and Intl. stock market are the same i probably wouldn’t split it myself and focus on a single one.

I noticed that the portfolios of my pillar 3a and bank investment funds are roughly the same (both ZKB funds). Thats why I decided to move a larger percentage to volt by vontobel as I like their concept and the funds included there to diversify a bit more.

 

[husbandfather]

@georgehay Honestly you're doing great. You said you don't plan to add more to the gambling money and will stick with ETFs, which is good. Don't worry about wealth tax, it's the cost of doing business.

 

[georgehay]

@husbandfather Makes sense, thanks

 

[virtualhope]

@georgehay P2P lending; never did it myself but from what I read the average experience is that you make good money with 9 out of 10 loans and then the last is a complete loss and that eats away all of your profit.

2) Unless it's hedging, the currency of the ETF is only the "reporting currency", it has absolutely no value to you and makes no difference between the CHF and the USD ETF (in terms of currency risk, of course one specific ETF can be better than the other one).

3) Yes, if you can live with it being a bit more complicated you will get the cheapest, stable broker that is available.

5) Yes, 2nd pillar is the save part. When and how do exit will depend on my factors including your withdrawal rate.

6) 3rd pillar and if you earn more than 120k, 1e

 

[mj2017]

@georgehay How the fuck does a 30yo have 180k in todays economy?

 

[georgehay]

@mj2017 Migrant from a poor country into France when 18. (was already living away from family at 16).

I have worked through my studies as my family couldn't help me pay for life in EU, finished Uni at 24 with 20k (had already worked over 4 years).

Now Eng, joined a big company worked 60h/wk as i was already doing that in Uni.

Moved a few levels up in France and got to 100k in 4 years (i accepted all career growth opportunities I could and kept changing region or countries every 8 months).

and now live in CH making 120k+ and got to 180k in 2 years.

 

[hesmyrock]

@georgehay Good job buddy and congrats! Thank you for showing that it is absolutely possible by hard work and effort.

 

[thechgz]

@georgehay Can I ask which industry?

 

[georgehay]

@thechgz Pharma, but I am not sure there is that big change in salary like ABB has offered a little more and people at my level in GE were making the same, but bonus was 10% instead of 15%.

At senior manager level there is a bit more of a difference like heave industry ABB, Hitachi, GE 140k.

Pharma 155k.

What is really shitty is On Running/Yamo/Estee Lauder paying 120k for a Manager/Senior manager with 8 direct reports...

 

[kenjackson]

@georgehay Awesome job. Took responsibility and made it yourself. Good going.

 

[kufe]

@georgehay Don't get your financial advice from reddit.

That be 5k, thanks.

Ah, BTW, VT vanguard total for total stock etf.. and IBKR is alright.