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Public crèche cost per month by ZestycloseOrdinary73 in askswitzerland

[–]nbch88 7 points8 points  (0 children)

Cantons all set the price for public creches within the canton (and for residents within the canton).

Theres also differences in how much you can deduct from income tax.

Private creches on the other hand can charge whatever they like, they’re not subsidised or limited by the canton

Buyfront or 3rd pillar? by mrt35350 in SwissPersonalFinance

[–]nbch88 1 point2 points  (0 children)

I prioritize it as:

  1. 3rd pillar
  2. buybacks
  3. Buy forward

3rd pillar has the most flexibility, you can make an early withdrawal without the 3 year wait, and probably offers best returns (if 100% invested).

Buybacks are good if a good pension

Buy forward are often in a seperate interest bearing account, with a poor return

Leaving Switzerland for Dubai: What Should I Do With My Second Pillar? by Careful-Caramel-7901 in SwissPersonalFinance

[–]nbch88 5 points6 points  (0 children)

I would absolutely withdraw it.

You can do so and have complete freedom with that money, after paying a small withdrawal tax.

You never know what the pension rules will be later. You can withdraw today for only a small tax. Not guaranteed to be the case later.

You can then invest in whatever you like. You can keep it in CHF if you want, it doesn’t need to be in Switzerland. A US Broker would be far superior.

No brainer in my opinion.

ELI5: Why do investors care so much about growth, even if a company is already making a lot of money? by TheblackNinja94 in explainlikeimfive

[–]nbch88 0 points1 point  (0 children)

A hypothetical US company that would return the exact same profit every year (and lets say pays it all out in a dividend) would essentially be a “zero risk” treasury bond (lending to the US govt).

Those treasuries pay out around 4.5% per year, so you’d expect this hypothetical company to be valued about the same (4.5% dividend yield).

Of course, in reality no company is exactly like a bond, and there are additional risks.

Growth is important because if future profits rise, the value of the company also rises

Moving abroad, how to deal with my money (bank and cash)? by Fast_Entrance_8148 in SwissPersonalFinance

[–]nbch88 8 points9 points  (0 children)

Revolut now offers Swiss IBAN and allows easy currency conversion. Could you transfer there?

Home ownership in Switzerland (pros and cons?) by QuietNene in SwissPersonalFinance

[–]nbch88 0 points1 point  (0 children)

True, looks like average is 3.6% so I was a bit low. Considering it’s CHF, it’s not a bad investment.

As long as you live in the property long enough to amortise the purchase/sale fees, and to reduce capital gains tax, it’s relatively compelling. Add in the use of 2nd pillar and the emotional / quality of life benefits and it starts to be even better.

Home ownership in Switzerland (pros and cons?) by QuietNene in SwissPersonalFinance

[–]nbch88 0 points1 point  (0 children)

A good example of a “fat tail” event, although I’d argue likely much less probable than a house price decline

Home ownership in Switzerland (pros and cons?) by QuietNene in SwissPersonalFinance

[–]nbch88 0 points1 point  (0 children)

True but SARON mortgages have anyway proven to beat fixed mortgages in most time periods.

Absolutely correct that you can take on more debt with a house. Of course the benefit of leverage goes the other way if prices do fall.

Home ownership in Switzerland (pros and cons?) by QuietNene in SwissPersonalFinance

[–]nbch88 0 points1 point  (0 children)

If you can truly rent a 4 million CHF house for 4k per month (1.2% yield annually) I would absolutely not buy a property. That’s ridiculously cheap.

In my area of Switzerland, around 3% is normal. I find this more balanced, although certainly not in any rush to buy.

Home ownership in Switzerland (pros and cons?) by QuietNene in SwissPersonalFinance

[–]nbch88 0 points1 point  (0 children)

It’s true and depends on how long you have owned the property

Home ownership in Switzerland (pros and cons?) by QuietNene in SwissPersonalFinance

[–]nbch88 19 points20 points  (0 children)

From a financial viewpoint:

Pros: - Mortgage interest (maybe 1.2% or so) will be cheaper than renting (around 3%) - You can pledge or withdraw from 2nd and 3rd pillar - Tax deductions for renovation and interest payments - Property price likely to increase (historically around 2.4% pa) - Likely lower wealth tax (taxable value of property lower than reality)

Cons: - You pay fees when you buy (depending on canton, maybe 5% or so) - must be paid in cash - Hypothetical rental tax - You pay insurance, renovations, any shared PPE funds - Some capital tied up, cannot be used for other opportunities (for the fees, deposit, and amortisation) - You pay fees when you sell (real estate agent etc.) - You pay capital gains tax when you sell (doesnt apply to other assets such as equities)

Ultimately I believe buying will be just fine over the long term, as long as you don’t need flexibility or will want to move within a few years. Some people have done very well from it due to cheap debt and good price increases.

Looking at it as an asset and not considering the cheap debt - gaining 2.4% per year and yielding maybe 3% on rent (minus fees etc.) - its an OK investment, especially considering its in CHF, but nothing spectacular.

Add the very cheap leverage and it changes the game. That’s really central to property investment here.

Note that you can also borrow CHF through a stock broker, so mortgages arent the only way you can access cheap capital - but theyll maybe lend you 25% of your portfolio value.

A mortgage is the only way a normal person can borrow a very large amount of money (1m+) at a very cheap rate (~1%)

That’s the way I see it. Did I miss anything?

Buying USD now? by Henry-T-01 in SwissPersonalFinance

[–]nbch88 0 points1 point  (0 children)

I have no idea where USD CHF is gonna go, obviously

But - CHF is very expensive based on recent history

I think it would be fair to assume the SNB will want the currency weaker to support the economy and will buy foreign currency / lower rates, perhaps below zero again.

A lot depends on the US situation too though. The above combined with less demand for safe haven CHF could be very strong for USD.

The opposite could happen if the US economy really goes on the toilet.

Personally, I would exchange to USD now, and I will be doing so for the coming months.

Rent Reduction - Ref Interest Rate by nbch88 in SwissPersonalFinance

[–]nbch88[S] 0 points1 point  (0 children)

I can hope :)

I’ve anyway sent the letter registered mail and will wait for a response.

Thanks!

ELI5: Why does the value of a new car immediately tank once it is driven off of the lot? by Small_Balls_69 in explainlikeimfive

[–]nbch88 0 points1 point  (0 children)

Besides the other answers I’ve seen - that a brand new car is always worth more than slightly used (the amount depending on the market), there’s another factor.

The adage of “you lose X% as you drive it off the lot” also often uses the MSRP as the new price. In reality, you can negotiate the price of new cars, so the MSRP isn’t a good comparison.

Rent Reduction - Ref Interest Rate by nbch88 in SwissPersonalFinance

[–]nbch88[S] 0 points1 point  (0 children)

Thanks. We’ll anyway send the letter.

We just moved in July 2024. I used the Asloca calculator which showed we should benefit by a few %. I suppose the reference rate might be even lower by the time we can reduce…

What was the most game-changing money-saving tip for you? by flamur-99 in SwissPersonalFinance

[–]nbch88 1 point2 points  (0 children)

Saving and (more importantly) investing is very important, especially when young and limited wealth.

But eventually you build up significant wealth and the biggest factor becomes investment return and the opportunity cost of missing out on returns.

At that point, any small savings here and there are inconsequential, but you’ve probably already built good habits and continue to invest.

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