Early Retirement in Helvetia

Where are you and where are you going?
herp
Posts: 171
Joined: Sat Apr 08, 2017 1:11 pm

Re: Early Retirement in Helvetia

Post by herp »

Yes, I agree with most of your points.

I also avoid Financials as these tend to have inflated balanced sheets. Resource exploration companies I will also avoid, as they tend to not have existing operations. That's really a hard requirement for me - either the company must have operations or be facing actual liquidation (the latter of which I have not yet experienced).

I don't make any adjustments to the balance sheet, but I do like net nets trading below net cash. That seems like such a hard black and white case.

When I say positive past earnings, I wasn't implying needing a strong track record, but normally I would pass on a stock like GRVY. I do recall reading a study where the authors concluded that money losing net nets actually outperformed the entire universe of net nets.

At any rate, I think we will do well as long as we apply a few sanity criteria like the ones mentioned above and keep playing in the right sandbox by buying a diversified basket of net nets.

EDIT: Do you have a specific holding period for net nets? My rule is to sell once the net net reaches intrinsic value (so, once it bounces back up to NCAV). If it hasn't reached that point at the end of the calendar year 2 years from the time that I purchased it, I will re-evaluate and see if there's a cheaper net net that it could be replaced with. This rule prevents me from hanging on to idle net nets if there's cheaper alternatives available.
Last edited by herp on Sat Jul 22, 2017 2:54 am, edited 1 time in total.

SalutNounou
Posts: 39
Joined: Sun May 08, 2016 2:45 am

Re: Early Retirement in Helvetia

Post by SalutNounou »

Yes, i forgot to mention it but i also avoid financials. First they may have inflated balance sheet, but above all, I don't understand their balance sheet and how I could adapt it to a net net strategy.

Regarding holding period :
I usually sell when the price is above Net Tangible asset value (so that would be Net net asset value plus the remaining tangible assets). This leaves more room for the upside.If it does not happen then I would agree with a time period of 2 years. However, to be honest I use this strategy since less than 2 years, so I never had to apply this rule.

wolf
Posts: 1102
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Early Retirement in Helvetia

Post by wolf »

Congratulations to the first 100k! It's one milestone on your way to FIRE. There will be several more and I am sure that you will hit them all. :-)
How is life in Swiss? Are you planning on buying some real estate or apartement? How are your thoughts on buying vs. renting in Swiss?
I also thought about working in Swiss. Could be an experience, but I guess there is some effort involved and changing work&living country, e.g. moving from Germany to Swiss. What attracts me is quality in life and the low tax rates. On the other sider there are high costs of living. Well, but an ERE knows how to tackle them, right? :-)
I have read your journal from the beginning and I am looking forward to read the next Update from you.

SalutNounou
Posts: 39
Joined: Sun May 08, 2016 2:45 am

Re: Early Retirement in Helvetia

Post by SalutNounou »

From a quality of life point of view, Switzerland is really great. I live in the border of Zürich and this is the view I have on the city from my balcony :

Image
Even if I live in a 400k Inhabitants city, I can hear the cowbells and chickens every morning :)


Public transportation is really fantastic and surprisingly not that expensive for Switzerland. (My subscription for unlimited access in the area 50 km wide constituted by cantons of Zürich, Zug and Schwyz costs me around 55 CHF per month (i.e 50EUR). On the other hand, buying single tickets instead of subscription is really expensive. (A single ticket is 4.40 CHF in Zürich, instead of 1.10 EUR in Paris for instance.

I also go biking a lot, even if the landscape is quite hilly : I ended up having much better legs :D

The cost of life in general is very high here compared to other european cities, but it is compensated by high salaries.
For instance :
-Housing : It is very difficult in the Zürich area to find housing at less then 750CHF/month per person, even in a shared flat. I considered sharing a flat at some time but realized that I would end up paying the same, so it was not worth it. To cut down housing costs further, the next step would be to live in a RV or similar arrangement.
-Food : If you go to discount stores (ex:Lidl), you can expect to pay around 250 CHF per month per person for food. You could go down to 150 CHF if you don't eat meat (In the household our diet consist of vegetables and meat). However, if you go to regular stores (Migros, Coop), it will be much higher. Swiss retail economy is organized in cartel and neither Migros nor Coop has any incentive of lowering their price (they make a 30% margin). So if you don't have access to discount stores, It would be closer to 400 CHF/month/person.
-Healthcare insurance : Currently it is 250CHF/Month/person for private mandatory minimum coverage, with a deductible of 2500CHF /year before the insurance starts reinsuring you. Of course you can pay higher premiums and add mutual insurances to have better coverage and lower deductible.
-Utilities : we pay around 35CHF/month for a 60sqm apartment so it is not very expensive.
-Internet : the absolute minimum I could find is 40CHF/month for a DSL connection.
There will be other minor annual expenses, but roughly I think the minimum budget to leave in the area would be 1300CHF/month/person. Which would make 15600CHF per year. Which, from what I can see, would be roughly the double of your budget :)

On the other hand, Salaries are much higher here and tax lowers than anywhere else in Europe. I am a software developer, and when I was living in Paris my annual salary was 60kEUR brut per year, of which almost 25k would go in diverse taxes. Here I make now 112kCHF per year (not counting bonuses) and only around 15kCHF go to taxes.

Regarding real estate, I looked it up in detail and i concluded it is not worth it here for the moment. To give you an order of idea, for a 60 sqm apartment we pay monthly 1500 CHF. If I want to buy a similar apartment in the surroundings, it would cost us almost 900k CHF! So the brut yield is at 2%, meaning that with all the diverse costs, I am not even sure the landlord make actual money.
Another thing is that when you are a landlord, you pay taxes on the "Eigenmietwert", which is the fictional revenue you would get if you rented your house (you pay the tax even if you don't lease your apartment to a tenant).

So I think real estate is not worth it here. On the other hand, a good thing we have in Switzerland is that capital gains are not taxed => It is a strong incentive to invest in stock market.

Jason

Re: Early Retirement in Helvetia

Post by Jason »

Holy Zwingli is that beautiful.

Stahlmann
Posts: 1121
Joined: Fri Sep 02, 2016 6:05 pm

Re: Early Retirement in Helvetia

Post by Stahlmann »

I hope we'll meet there one day!
I PM'ed you!

SalutNounou
Posts: 39
Joined: Sun May 08, 2016 2:45 am

Re: Early Retirement in Helvetia

Post by SalutNounou »

Stahlmann wrote:
Sat Jul 22, 2017 10:25 am
I hope we'll meet there one day!
I PM'ed you!
I may be mistaken, but so far I did not receive anything :(
Jason wrote:
Sat Jul 22, 2017 6:08 am
...Zwingli ....
Ahah! Good reference ;)

thrifty++
Posts: 1171
Joined: Sat May 23, 2015 3:46 pm

Re: Early Retirement in Helvetia

Post by thrifty++ »

Congratulations on your net worth! You seem to be making very swift increases. It looks like your move to Switzerland was well worth it and the quality of life sounds great too.

User avatar
Jean
Posts: 1890
Joined: Fri Dec 13, 2013 8:49 am
Location: Switzterland

Re: Early Retirement in Helvetia

Post by Jean »

Hi,
I'm glad to see you're happy in our beautifull country.
You are right about real estate, unless you fall on a very good opportunity, it's not worth it to buy.
I hope thing will keep being fine for you.

I just want to add that if Migros is globaly more expensive than Aldi, stapples are as cheap in migros as in hard discounter like aldi and lidl.

wolf
Posts: 1102
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Early Retirement in Helvetia

Post by wolf »

SalutNounou wrote:
Mon Apr 10, 2017 2:57 pm
April 2017
Yeah! I passed over the 100k threshold, and it keeps holding me motivated.
Hi SalutNounou. A year has passed away since you achieved your 100k milestone. I guess you have achieved another one? How are you? I haven't heard anything from you in a while. Hope you are ok.

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