Saving money during PhD

[evangelinaa]

Hi Everyone,

I'm a foreign student starting soon my PhD. Salary starts from CHF75K and increases by CHF5K annually. I'll be living in Zurich. All of my CHF money is currently managed at the Zurcherkantonalbank.

I want to put some of the money aside as an investment so that it doesn't gathers dust in bank.I don't want to invest in something too risky -- so I basically thought of investing the money in things like S&P500 and other index funds; however, I'm open to other suggestions on how to better diversify my portfolio.

So I have two questions for you:

1. How much money would you put aside?
2. Is there any recommended service that can do that for me? For instance, would you recommend me doing that through my bank?

I'm kinda noob with all of this so any kind of help would be very much appreciated!

Thanks

 

[daxta]

@evangelinaa Get an account at interactive brokers, switch to the tiered pricing model (way cheaper than your bank), put a bit of money in Vanguard Total World (VT) every month. This is a a broadly diversified ETF (9000+ companies, from all over the world with various sizes). Takes about 5 minutes every month. Expected return over 15 years is about 7% per year.

Additional advantage is that this strategy is tax efficient (no stamp tax and you can get the dividend tax back on your tax return).

As for how much money, investing is as much about emotions as it is about numbers. Ask yourself, what would you feel comfortable with and how would you respond if another crash like 2008 happend (-40% but fully recovered in a few years)?. If you're unsure just start slow

Keep in mind that the market is going down at the moment if you're investing for the long-term this works in your advantage (since stocks are now cheaper than last year but still represent the same companies) but be prepared to potentially lose money for the first few months that you're investing. Don't try to time the market, no-one can predict the future, changes are tht you'll wait to long and miss out on a big part of the recovery.

 

[jesusbecoming]

@daxta Do you need to file a tax return even if you earn less than 120K if you buy ETFs?

 

[daxta]

@jesusbecoming No unless you own property or hold more than 180k in combined assets. You can check with your local tax office to be sure. It might still be worth filing for taxes if you contribute more than the minimum to your pension fund and/or have other deductable. In Züri you can now do it online these days, it's pretty doable.

 

[jesusbecoming]

@daxta Thanks! Do you have a source you can provide me about the 180k limit? Would be really useful, thx!

 

[daxta]

@jesusbecoming Your local tax office will be the best possible source there should be someone at your Gemeinde that can handle all tax questions.

 

[jesusbecoming]

@daxta Makes sense, although it is a bit weird that this info isn't online (even in German)

 

[resjudicata]

@evangelinaa Do it by yourself. Banks are very expensive in these matters. Get a broker like degiro for example. Regarding the amount, just try to put a certain amount to aside each month and see how it goes. More, less, etc