Podcast
Behandelte Themen
- Steuern in der Schweiz
- Das Drei-Konten-Modell
- Worauf Sie bei einer Bank achten sollten
- Wie Sie in der Schweiz ein gutes finanzielles Fundament aufbauen
- Versicherungen in der Schweiz und wie Sie prüfen können, ob Sie sie benötigen
- Investieren in der Schweiz
- Die Kern-Satelliten-Strategie für passives und aktives Investieren
Haftungsausschluss: Dieser Podcast stellt weder eine Finanzberatung dar noch ersetzt er eine persönliche Beratung. Wir empfehlen dringend, sich bei spezifischen Fragen oder Anliegen zu finanziellen Angelegenheiten im Zusammenhang mit dem Leben in der Schweiz professionelle Unterstützung zu suchen. Die Verantwortung für alle Handlungen, die auf der Grundlage der Informationen in diesem Podcast vorgenommen werden, liegt ausschließlich beim Leser.
Mit wem wir sprechen
Seit 2019 betreibt Eric den beliebten Blog „Schwiizerfranke“. Er verfolgt damit das Ziel, Schweizerinnen und Schweizer durch kluge Investitionen, passives Einkommen und das Drei-Säulen-Rentensystem zu führen.
Wenn er nicht gerade Finanztipps zusammenstellt, genießt er die Natur, treibt Sport oder trifft sich mit Freunden.
Über die Episode
Einige von Erics besten Finanztipps sind:
- Achten Sie immer auf die Gebühren: Schweizer Banken verlangen oft hohe Gebühren, die Ihre Ersparnisse oder Investitionsrenditen schmälern. Eine der einfachsten Möglichkeiten, Ihre Finanzen zu optimieren, ist die Wahl von Anbietern und Konten mit niedrigen Gebühren. Bei Investitionen ist es am besten, die Gesamtkosten unter 1 % oder noch besser unter 0,5 % zu halten
- Schließen Sie nicht zu viele Versicherungen ab: Viele Schweizer sind überversichert. Es gibt für alles eine Versicherung, aber die einzige Pflichtversicherung ist die Krankenversicherung. Bevor Sie eine neue Art von Versicherung abschließen, fragen Sie sich, ob Sie den Schaden selbst bezahlen könnten und wenn ja, wie wahrscheinlich es ist, dass er eintritt. Wenn Sie keine Probleme haben, den Schaden zu bezahlen, und das Risiko gering ist, brauchen Sie wahrscheinlich keine Versicherung
- Seien Sie konsequent: Legen Sie automatisch einen Teil Ihres Gehalts beiseite, wenn Sie bezahlt werden. So können Sie einen Notgroschen aufbauen und in den Aktienmarkt investieren
- Erstellen Sie ein stabiles Portfolio: Halten Sie den Kern Ihres Portfolios, vielleicht 80 oder 90 Prozent, in stabilen, kostengünstigen Indexfonds. Den Rest können Sie dann in einzelne Aktien oder spekulative Finanzprodukte investieren. Das bedeutet, dass Sie von risikoreichen, aber lukrativen Gelegenheiten profitieren können, ohne den Großteil Ihres Vermögens zu riskieren.
Obwohl viele Menschen in der Schweiz ein hohes Einkommen haben, nutzen die meisten von ihnen ihre Finanzen nicht optimal. Sie sind sogenannte HENRYS: High earners, not rich yet (Hochverdiener, aber noch nicht reich).
Sie:
- übertreiben ihren Lebensstil, um ihn an ihr Gehalt anzupassen
- vergessen, dass einige Rechnungen in der Schweiz unvorhersehbarer sind als in anderen Ländern
- schließen zu viele Versicherungen ab
- verlieren viel Geld durch hohe Bank- und Investitionsgebühren.
Eric hat den Blog „Schwiizerfranke“ ins Leben gerufen, um Ihnen dabei zu helfen, all diese Fallen zu vermeiden. In unserer Folge spricht er über die Einrichtung Ihrer Finanzen, den Abschluss der richtigen Versicherungssumme, Investitionen in der Schweiz und vieles mehr.
Ressourcen
Schwiizerfranke-Bankkontenvergleich
Informationen zur Säule 3a (Altersvorsorgekonto)
Podcast über Finanzen in der Schweiz mit Baptiste Wicht von The Poor Swiss
Robert Kiyosakis Rich Dad, Poor Dad-Ressourcen
Nächste Schritte
Wenn Ihnen der Podcast gefallen hat, hinterlassen Sie bitte eine Bewertung auf Ihrer bevorzugten Plattform. Vielen Dank fürs Zuhören.
Aktuelle Stellenangebote in der Schweiz ansehen
Senden Sie uns eine Initiativbewerbung
Melden Sie sich für unseren Newsletter an und erhalten Sie unseren E-Book-Leitfaden „Leben in der Schweiz“.
Transkript
Kathrin: Hello everybody and welcome to another episode of living in Switzerland. The series is brought to you by Rigby. We are a staffing and project services company based in Zurich. If you or anyone you know of is looking for a new role in Switzerland or if you're looking to hire, let us know. We'd be happy to help.
The best way to do that is by going to rigby.ch/apply and filling out the form. Then, if we have anything that might be of interest, we'll gladly let you know.
Today we're joined by Eric from Schwiizerfranke, which means Swiss Franc, the personal finance blog he started in 2019. Eric's passionate about guiding Swiss residents through smart investments, passive income, and the three-pillar pension system.
When he's not sharing financial tips, he's out enjoying nature, doing sports, or connecting with friends. Eric, welcome to the show.
Eric: Thank you so much. Hi.
Kathrin: Can you tell us just a little bit more about yourself and maybe your interest in finance?
Eric: Sure. So, my name is Eric, and I was born in southern Germany.
My interest in finance goes back up to my teenage years. When I was a teenager, I read my first books on investing and financial freedom, like the books from Robert Kiyosaki. And I didn't wait long. So, when I was 18, I bought my first stocks.
And since then, I'm really excited about it.
Kathrin: Amazing. It's so good to get an early start, isn't it? Because of compounding.
Eric: Yeah, definitely. The longer you're in the game, the better it gets.
Kathrin: Absolutely. And what's also interesting is that in addition to, you know, being an expert on finances, you also have an expat background.
So, you came to Switzerland as an expat, didn't you?
Eric: Yes, correct. So, I studied engineering. I was always a technical guy, and finance was always a hobby for me. And it was not my professional career or anything. But when I came to Switzerland due to my partner, I realised that in Switzerland, financial things are running completely different.
So I tried to find like, many information about how to invest, like the same stuff that I do at home in Germany before, and I found that so many things like investing but also retirement, health systems, even the taxation is completely different in Switzerland. And it was not easy to find all this information that I needed, so I did a lot of research. And I tried to find more, but the beginning was not easy. So, I tried to document all of that, and that's also when the idea for the blog came up later on.
Kathrin: Right. So now you've created this resource that for new people who are coming or even people who've been in Switzerland for a while, it's a bit easier to get started with all that.
Eric: Correct. Yes. Because you have to know, for Swiss people and for expats, it's completely different in many belongings. For example, like the taxation can be different at least if you're an expat. So even if you want to ask a Swiss person or if your partner, for example, is Swiss, maybe they can't help you regarding that.
So, you always need to find some good resources, to get started.
Kathrin: Yes. And that's because some or many expats are taxed at source, aren't they? And Swiss residents or citizens are often not. Is that right?
Eric: Yes. So, Swiss residents are not taxed by source, they are taxed in a, in the Swiss way, let's say. But if you're an expat and if you don't have like, the permanent residency, and if you earn below 120,000 Swiss francs a year, then you are taxed by source.
That's completely different than Swiss people are taxed. So, in this case, the taxes are like deducted from your salary every month. And also, you don't need to file the text return mandatorily. But that was also like, one of my biggest mistakes. And I came here, I talked to many people, and I had no idea what to do about my taxes.
I even went to a tax expert, and he recommended me to file the non-mandatory tax return and to even use the Pillar 3a. But in hindsight, it was a big mistake because of that, I not just had more work because I filed a tax return, but I even paid more taxes because, yeah, so...
Kathrin: Oh, right. Okay, so it's good to know these things up front.
Eric: Absolutely. And, uh, these days, there are more options to find these resources, but a few years ago, there was not too much to find.
Kathrin: Okay. Yeah. So, this is really helpful. Let's talk about someone, maybe either who is coming to Switzerland or already in Switzerland and getting started with their Swiss finances.
So, I know that you have a three-account model that you often use to talk about how to organise your finances. Can you tell us a little more about that?
Eric: Sure. So, there are many different models that you could use. And they're just like a mental construct that could help you organise your finance.
Kathrin: Right. Of course.
Eric: A three-account model is a really simple one. There are like five or six-account models on my blog if you want to know more about them to get more sophisticated. But with these three accounts, you could start really easily and get some structure into your finance.
So, the first account is basically your main account, probably the one that you get once you arrive. Your main salary account, probably with a big bank because they're more easy, or more accessible, for expats in the beginning. And this account, probably you will use it as your salary account and for your regular expenses in Swiss francs, whatever you need to pay into.
Kathrin: Do you mean just a normal current account or checking account?
Eric: Yes, correct. A normal checking account. And in Swiss francs. And from there on, uh, you have your basis, let's say.
Kathrin: Yes.
Eric: And then I would recommend quite early, as soon as possible, to open a second account. And, this one may be with a digital bank because the modern digital Swiss banks, they offer way better conditions for you.
And I would recommend this account because then you don't have any running fees on your account. Also, probably you will get some interest or more interest than with your main account, I guess. And also, you have better conditions, for example, in terms of exchange rates.
Kathrin: Oh, right.
Eric: Yeah. So, if you, let's say go home to your home country or you travel abroad and you need to spend your Swiss francs and other currency, then the traditional banks will probably charge 1 percent or even more, sometimes up to two or 3 percent for the exchange.
And with the digital banks you can get really, really low and affordable exchange rates. So...
Kathrin: Okay amazing, yeah.
Eric: So, this would be your second account also for your short-term savings, but also for your abroad spending, let's say.
Kathrin: Okay, so an account where, sort of, your day-to-day spending would come out of?
Eric: Yes, uh, doesn't have to necessarily, I mean, you could even use your main account with the traditional bank if you want to keep that for your day-to-day spending in Switzerland.
But once you go abroad and, uh, once you want to save some money aside and get some interest on it, then I would recommend to get the second account for that.
Kathrin: Okay. That makes sense. And then there's a third account?
Eric: Yes, absolutely. And that's, uh, the golden bucket, I would say. There you can put the money that you don't need in the long term.
And as a rule of thumb, I would say, the money that you don't need for the next 10 years, let's say, you can invest it in a stock market. This is like really for the long term, not for the short or middle term. But if you have some spare money that you can put away, I would definitely recommend to get an investment account.
Also not with your traditional main bank, but actually with an online brokerage or Robo advisor, let's say.
Kathrin: Okay, because they charge lower fees?
Eric: Correct. And they have more functionalities. Like, um, for example, one of the main reasons that I started the Schwiizerfranke finance blog was that back in Germany, I used to have an automatic ETF savings plan that I used every month.
And when I came to Switzerland a few years ago, this was not even technically available. So, this was the first thing that came to mind when I searched it. Okay, how can I do that here too now? And it was not available. So definitely, the digital broker services and robo advisors, they have not just lower fees, but also often more technical functionalities.
Kathrin: Okay. And what do you look for? Well, apart from maybe what you've already said, the functionalities, but when deciding which banks to use for these three accounts, what are maybe some criteria you can give us?
Eric: So, the first account, your main account, probably, as I mentioned, you will, I guess, open it with a traditional bank like UBS because they are more flexible in taking customers if you in the beginning don't have a Swiss address and are just arriving.
But after that, for your like, second account and where you have more flexibility in choosing, I would advise you that you first look on the fees. So, compare the fees. How much is the account? How much does the bank like take? in terms of exchange rates or other fees from you?
And I have to say it's not easy to compare because banks as insurance companies, for example, are masters in hiding some of these fees. You can use comparison services like moneyland.ch or even on my blog or on other resources you can find really good comparison sites.
Kathrin: Yeah, you've got lots of resources, haven't you, for that kind of thing, for different types of accounts?
Eric: Yes, correct. That's one of my main work that I do because yeah, it's so hard to find all these fees and to have like a fair and good comparison, uh, chance.
And after the fees, of course, fees are not everything. I would advise you to also look on the interests or how much interest are you getting if at all, because it's also another part of the equation, right? To get some interest on your savings and also the functionalities, like a mobile payment or in Switzerland, we use Twint a lot. It's a special Swiss payment service that you will probably need day to day.
And even if you need some investment or pension services, there are many digital banks that combine all of these offers.
Kathrin: Right, okay. And then that's more convenient.
Eric: Yes, correct.
Kathrin: Yeah. Okay, excellent. So, I guess if someone is starting from a point of maybe not being very organised with their finances yet or not having very much spare money, I think there's two parts to that, aren't there? The first one is what we've already talked about, organising yourself and making sure you've got that nice setup. And then the second part is actually getting to the point where you do have, you know, spare money to invest and where you're not, sort of, hit by unexpected bills all the time.
Um, do you have any tips for setting yourself up in that way and getting to that good, solid financial place?
Eric: Absolutely. Because it's a big issue in Switzerland, you have to know, we have a lot of HENRYs here, as we call them. So, it's an acronym which stands for “high earners, not rich yet.”
Kathrin: Okay, interesting.
Eric: That's a person who earns above, let's say 100K a year. And especially expats, I see at least, often coming with really high education and they get good jobs and they earn good money, but then often people tend to rise their lifestyle also a lot.
Kathrin: Okay. Yeah.
Eric: You earn a lot. You work a lot. So, work hard, play hard, which is nice, of course. But also, I would advise you to get some money on the side at the end of the month for your pension or your savings at least. And if you are in this trap, or if you really want to make the transition from paycheck to paycheck to long-term wealth building, let's say, I would advise you to start small.
So, I don't want you to have like a new hobby, which is finance now, because my opinion, these days, it's really easy to automate your finances. So, you can set up automatic savings plans, so at the end of the month, or let's say the first, so after your salary arrives at your main account, automatically some money, let's say 20 percent or fix some transfers to your savings account.
So, you're always automatically without even thinking about it, put some money aside because it's always good to have something. And yeah, before you start investing, actually, I always tell people to have an emergency fund because if you invest for the long term, you only can be like, relaxed in the stock market if you have some money aside for unplanned bills, let's say.
So if you have an accident or you lose your job or the dentist has like an extra-large bill for you, which is not covered in Switzerland, by the way, um, then you need some money and you don't want to need to sell your stocks in this moment, but actually have some emergency fund for this. So, before you start investing, I would recommend to have some emergency money aside.
Kathrin: Okay. So how much do you think is sensible?
Eric: Well, it really depends on your psyche, let's say, and...
Kathrin: Like how many months of expenses or something like that? Do you have any, sort of, rule of thumb for that maybe?
Eric: So many people actually calculate three to six months of their monthly expenses, so you calculate or you sum up your rent and your groceries and all the stuff that you really need, not the luxury expenses, but only the necessary ones.
You add them up and you get a number and then you say, okay, I want to have this number aside, let's say for three months. If I lose my job, I want to be able to cover my expenses for the next three months. Um, that's like a rule of thumb. And if you want to get more specific, I actually programmed a calculator on my website. You can use this one that gets a bit more sophisticated.
Kathrin: Okay. Perfect.
And you talked briefly just before about the dentist bills. So, in Switzerland, I know we already discussed... a few things you don't pay ahead, like for example, there's no insurance really for dentist bills. You just have to go to the dentist and then later you get a bill for it. How can you plan for that? Or maybe protect yourself against these unexpected expenses? I mean, aside from dipping into your emergency fund, is there a way to calculate them or to anticipate them?
Eric: So, that's a really good question. I think it's not really always able to be calculated in advance, but, to put some money aside, this is always good, right? To have like, at least, like 10 percent of your salary and put it in a savings account. But also if you think ahead and you know, okay, I will go to the dentist twice a year. Or if I have glasses, for example, and I will need new glasses every two years, and this will cost so and so much, you can do some budgeting in advance, which would be really smart in the beginning.
If you don't have like lots of spare money yet in the beginning, of course, also an insurance would be a great idea. But Swiss people love insurances, and most of us, we are way over insured. So, I would also advise you to check which insurances you need and which you don't.
Kathrin: Yeah, that's another thing that is often said about Switzerland, that people are a bit over-insured. They tend to, sort of, go on the safe side, maybe because there are quite a lot of expenses that you pay for afterwards that they tend to insure quite a lot. How can you maximise the benefits of insurance while not overspending on it?
Eric: So, I have a quick insurance check that I always run in my head whenever, uh, I'm talking with someone about an insurance. And it goes as follows: In the beginning, I would ask myself, or you can ask yourself, if you can afford to cover the cost if the case happens. So, let's say you’re thinking about taking an insurance to cover your phone. If you break your phone to get a new one. But if you can easily afford a new one, then you pass this first test.
Kathrin: Okay.
Eric: Then there comes a second question. So you should check the frequency of the accident. Like, did you break your phone many times in the past? If you didn't, then I guess this insurance is not necessary for you.
Kathrin: Okay.
Eric: These two questions give you an easy idea if you need an insurance or not.
Kathrin: So, how difficult would it be in the worst case and also how likely is it that this is going to happen to you? And which might be individual, right? Some people break their phones more than others or have an accident more than others. So in that case, it might be sensible, but for most people, maybe these small insurances like phone insurance might not be necessary?
Eric: Yes. And they add up so easily if you insure like everything, because these days there's an insurance for everything and yeah, you really need to check so you only have the basics that you really need, so that you feel safe, which is important. I want you to sleep good, of course, but yeah, as I mentioned, Swiss people are really over-insured. It's a well-known fact.
Kathrin: Okay. But of course, there's one type of insurance that you can't go without, which is health, like, basic health insurance. Do you have any tips for not overpaying on that?
Eric: Yes. So, this is, as you said, the only mandatory insurance we have in Switzerland. You need to have the basic health insurance. But also, a really new fact probably for many expats will be that you can vary how much you want to insure here. So you can actually choose the deductible, and you can choose if you want to and if you're generally healthy, you can choose a really high deductible up to 2,500 Swiss francs.
So if you do that, this reduces your monthly premiums a lot. And which is also important to say here is that this basic health insurance, the basic coverage is the same everywhere. So it doesn't matter which company you choose, uh, the price will vary a lot. There's huge differences if you check this, but actually the coverage of the basic health insurance is the same everywhere.
Kathrin: Interesting. Okay, so it's not like you get less if you pay less, it's just this insurance is offering you a better deal.
Eric: Correct. Of course, there can be some small variations on how easily accessible the support is, for example, or how good the app is, let's say, but the coverage will not be a problem.
Kathrin: Nice. And It's also important to know that you can only switch once a year, right?
Eric: Yes, correct. There's a deadline that you need to check and people really should check into their health insurance and probably make the comparison yearly. I think it's a good idea to check all your insurances, like once a year.
Maybe if there's like bad weather and end of the year, like in October. So you just sit down and check, what do you have? What do you really need? And if you need an insurance, what's the alternative? Is there something better on the market now? Because new products are arriving all the time and there's competition, which is good.
Kathrin: Yes. And so, I think we published this in our newsletter in the autumn that your health insurance provider has to give you a breakdown of your costs in October so that then if you are not happy in November, you can switch.
So that's the time of year that you're meant to do that. So, put October or early November in your diary to do that check.
Eric: Yes, just already, maybe right now, open your calendar and set like a yearly reminder for that.
Kathrin: Yes. Exactly. That's a good idea. So then, you never get caught out by that and miss the deadline. And then you have a whole year where you can't do anything about it.
Eric: And even about the supplementary health insurance. So some people maybe even think about having a better insurance. If you want some alternative treatments, let's say, or if you want a private hospital room, or if you have glasses as I do, uh, there are supplementary health insurance options. And, uh, you can choose, by the way, a different insurance company compared to your basic health insurance. So it doesn't have to be the same company. So also here you can find the best deal. And that's a really good idea, if you need one, or if you want some of these options, to check for supplementary health insurance, because sometimes here for really little money, you can have a huge benefit.
Kathrin: Okay. So, yeah, some people, if they want to minimise, maybe they go too minimal and they don't look into supplementary health insurance when actually, it might be useful.
Eric: Yes, it can be even like also a good combination to have a really high deductible at the basic coverage, but then still add a supplementary health insurance on top.
Kathrin: Okay. Yeah. That's an interesting option.
And then some other types of insurance that you might come across include things like liability insurance or household insurance and car obviously, and even life insurance. And so I guess the, rule of thumb is just check if you really need it?
Eric: Yes. So, the first one you mentioned, the liability insurance, I would say every person should have one, because to be honest, it's not really expensive. It's, I would guess 50 to 70 Swiss francs a year, depending on a company and the coverage. But if you need it, you will be really happy because otherwise it can end really bad. So, liability insurance, I would say is really necessary. The rest that you mentioned, like car insurance, depends if you have a car and then what type of insurance you need. Really check it specifically, maybe even get some new offers every year, negotiate with the companies because there's a lot of room for how much you pay.
Kathrin: Okay.
Eric: And with the household insurance, it really depends on how valuable your belongings are. Sometimes you're even forced to, like my landlord, for example, he wants me to have a household insurance. Otherwise, to be honest, I wouldn't have one myself.
Kathrin: Yeah, that's right. Sometimes landlords specify, uh, different kinds of insurance that you need.
Eric: Correct. Especially if the building is new or in cases like that.
Kathrin: And then I guess life insurance is necessary if you have dependents, but not necessarily if you don't.
Eric: Correct. So, life insurance is a really tricky one because it sounds good to have like, this huge coverage in case something happens, but, often it makes me really sad when I see the specific cases of people having a life insurance because especially young people often get sold on a life insurance. And to be honest, if you're young, if you don't have a family, people who are dependent on your income, if you don't have a mortgage, let's say, then probably you will not need a life insurance.
This is really a tricky one because you have to know, the brokerage companies, they get a huge bonus if they sell a life insurance to you. So, they're really hot in, in selling these products.
Often expats are ending up with one of these because they don't know, and they want to save some taxes, which you can if you use it in the Pillar 3a. But uh, this one, I would really advise you to not do it. If you need a life insurance, you can do it, but use it for the open market and not within the Pillar 3a.
Kathrin: Yeah. The Pillar 3a being your third retirement account.
Eric: Yes.
Kathrin: That is tax advantaged, but there are two options, right? So you can get, just get an investment or just general savings pillar...
Eric: Correct, yes.
Kathrin: Or you can get insurance. And a lot of the time the insurance is really not a very good option.
Eric: Yes. Especially here because then the life insurance all of a sudden is within a contract that you normally like, sign up until you retire. So, it's a long time and you're not flexible anymore.
Kathrin: Yeah. Okay.
Eric: Yeah. So, you always want to be flexible because the third pillar normally is not mandatory.
Kathrin: Yes. And your situation might change, or you never know. Yeah.
Eric: Correct.
Kathrin: All right. And then once all that is sorted out, you can start investing of course.
Eric: Now it gets fun.
Kathrin: Yes. There we go. Uh, so if someone is a beginner, they maybe are sitting there and there's all these options and companies and everything and what, where do you even start? What do you do first?
Eric: Yeah. That's where beginners typically get lost or get scammed also in investing. There's so much stuff in the internet and many traps to fall into. So, I would advise beginners actually to focus on simplicity and low costs.
So, there's many options to start with, but I would advise you to go, if you want to, maybe to a digital robo advisor, or if you want to invest yourself, so if you want to pick the products yourself, you could open an account with an online broker and choose some ETFs and index funds.
These are stock baskets with really low fees and you can invest really easily and even with automatic savings plans every month, so there's not much work to do at all once it's set up. And that's really my advice for beginners.
Kathrin: Okay. So it takes a few hours to set up, but then after that, you're all good to go. You don't really even have to do anything most months.
Eric: Yes. Up until the end of the year, I would say, then maybe you want to do a rebalancing, at least check. And definitely you want to download the documents for taxes, but that's it.
Kathrin: Okay. So yeah, pretty straightforward. Once you know where you're going, it's kind of straightforward, right? And you have lots of resources, some of which we're going to link to for beginners to get started.
And then of course, as you said, there's so many traps and one of the big traps is the costs. So if you go, for example, if you're with a big bank and they have an advisor and they talk you into going with them, you might pay a large proportion of your gains to that person instead of them going into your account, right?
Eric: Yes. And often you don't even see that. As I told you before, like with the bank account, same here in investing. There are some fees which are quite obvious. So, if you have like an active fund and they show you like the TER, the total expense ratio, and you see this is like, 2 percent a year, then it's quite obvious.
But then behind the scenes, let's say, for example, for every currency exchange or in other situations, there are more fees probably. So at the end, you just wonder where your money went, the stocks went up, but there's not too much return in your portfolio.
Kathrin: Right. Okay. It's gone everywhere, but in your account.
Eric: Yes! Someone, someone got money, but it's not necessarily you.
Kathrin: Oh dear. Yeah. So, what are your tips on reducing the investment costs?
Eric: Yeah. So as mentioned before, I would not recommend to go with your traditional bank, let's say. Even if you like them a lot, but probably if you compare their conditions to an online service, like a broker, like Swissquote or Saxo Bank, for example, or Degiro or Interactive Brokers, there are many, and you can find comparisons on my blog.
Um, yeah, I would really check them on their fees and start with a really easy, accessible and affordable solution from there.
Kathrin: Okay. So, that helps you just to keep more of your money.
Eric: Yes.
Kathrin: Do you have a rule of thumb or anything like that about what your expense ratio should be? Like you mentioned 2 percent in a fund, and that would be very high, wouldn't it? Because the average, what, you know, the average return would be what, 7 or 8%, so that's like a quarter of your gain already gone. But what is a good ratio? What should maybe someone aim for?
Eric: That's a really good question. Uh, yeah, 2 percent is a lot, even though you will find funds which are even more expensive. It's ridiculous to think about, but that's the reality. Uh, but actually if you go for passive products, like ETFs or index funds, you can find these with, uh, 0.1 or even below that. So I would say 0. 2 percent a year is a good TER to like, have a number in the head.
Kathrin: Okay. Yeah. But then maybe platform fees come on top of that a little bit, right? So you might be slightly above that, or...?
Eric: Yes, correct. There can be additional platform fees, but typically with the online services, they are really low, up to zero. And it really depends on the platform you use.
Kathrin: Okay. So definitely keep it well below 1%, right?
Eric: Absolutely. Yeah. But once you're below 1%, you're already good because many people pay definitely more.
Kathrin: Yeah. So, when I was starting investing, and this is not in Switzerland, so maybe the rules are just different, but I was always, sort of, told below 0.5 percent is not bad, but as long as the total costs stay somewhere in that region, I think you're okay. Right?
Eric: Yeah. You can optimise really all the way down. And in the end, I would say it depends on how much work you want to do yourself.
Kathrin: Yes.
Eric: Because not every person wants to go in all these details and do all the research and structure their portfolio in their own way. But you will find then companies who do that, which are doing the same as the big banks, let's say, but they're doing it around 0.5 percent a year.
Kathrin: Okay. So like robo advisor type companies.
Eric: Correct, yes.
Kathrin: Alright. So some people are happy to just stick to that. So, stick to a broad index fund and just invest in passive products. But others want to get a little bit more exciting and they might want to invest in crypto or individual stocks. Um, and that's also possible in Switzerland, isn't it? So what is your take on that or your strategy for that?
Eric: Yes. So here it gets really interesting because many people get lost here. Also because the internet and friends, maybe will always discuss like, hot speculations and crypto tips, for example, or the newest stock that you want to have in your portfolio, but it's so easy to get lost here.
And if you want to do that... I would not advise you to do it, but if you still want to do it, I could recommend the core-satellite strategy, for example. So, this strategy in the core has like a huge passive core, which is the centre of your universe, let's say, and this is like up to 70 to 80 percent made of ETFs and index funds. So still really broad and passive.
And if you still want to put some money into speculations like individual stocks, for example, you can place some small amounts into these satellites and you can really imagine it like a small universe and all these small satellites will then fly around your core.
And they could make up to 5%, for example. So, you put some money into Bitcoin, some into some individual stocks, and if one of these speculations will go down to zero, it will not be a problem for your whole portfolio. But if one of these speculations will go really well, let's say the Bitcoin speculation will be really huge all of a sudden, then it's nice because you still have the gains and then the idea would be to sell a portion of it and transfer it back into your core to still have a really stable portfolio.
And yeah, that's the main idea of the core-satellite strategy. And if you want to do that, I would really recommend this one to you.
Kathrin: Okay. So always keeping, sort of, something like 80 or so percent of your portfolio in this core, this stable, more stable or more diversified maybe.
Eric: Yes. So always have a clear strategy and do not get too emotional about some speculations around it.
Kathrin: Amazing. All right. Really helpful advice today. And there's even more on your blog, right? So, tell us a little bit more about the resources that you offer and if someone's new to your blog, where should they start?
Eric: Yes. So that's... there are a lot of resources on the blog. To be honest, they are written in German, but there are some translations into English.
And if you want to start, actually, I would advise you to go to schwiizerfranke.com/blog and just switch it to English if you want to, or leave it in German if you want to learn German or already speak it. And there you can search and find articles around probably every topic that you need when you start your financial journey in Switzerland.
And if you want to go further and you are really into it, you can actually also subscribe to my newsletter. Every Wednesday I send out the so-called wealth letter and I'm sending my best financial tips there. But this one is in German, to be honest.
Kathrin: Okay. But I mean, there are good translation software options now, right?
So, people will also be able to translate it if needed.
Eric: Correct. Or it's also another opportunity to get better in speaking German.
Kathrin: Exactly. Practice your German with all the financial terms, that'll be interesting.
And if someone wants to get in touch with you directly, maybe they have a question or want some more personalised advice, how can they get in touch with you?
Eric: So, you can send me a DM on Instagram if you want to, or an email, or if you really want to get deep into your finances and you speak German already, you could even come into one of my courses. Twice a year I'm holding a course. You will find that on the website also. But yeah, just send me an email. I'm happy to help.
Kathrin: Excellent. And we can also link to your courses, so they're right there in the show notes as well.
Eric: Yeah, great. Cool. Thank you.
Kathrin: All right. That's it for today. So, thanks once again to our guest, Eric, for joining us.
Eric: Thank you for your invitation. It was a lot of fun.
Kathrin: And thanks to you for listening.
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