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  #21  
Old 28.04.2020, 08:23
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

As you run your calculations, be aware that, relative to many other countries, Switzerland is a difficult place to be 'house poor'. Be sure that you are not over extending yourself, and be sure to keep a healthy sum aside for not only the day to day things, but also for the unexpected.

Because if there is one thing you can expect as a homeowner, it's the unexpected.

So - as you play with the numbers, ask yourself: Could you also handle an unexpected expense to the tune of, say, 30-50K? And again in the next couple years?

If you are a skilled DIY guy you can do a lot around the house yourself to make home ownership less expensive, but if not... nothing gets you Switzerlanded faster than having to call in professionals to do basic home repairs.

Were it me, I'd keep saving. Or consider an income generating property. (Just be sure that the income generated sufficiently covers those 'unexpecteds'.)

All the best with your decision.
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Old 28.04.2020, 08:26
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

200,000 is peanuts. Save it for a rainy day. And that can happen at ANY time.
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Old 28.04.2020, 08:32
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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200,000 is peanuts. Save it for a rainy day. And that can happen at ANY time.
Ι had a friend who worked with me in London and he stayed with his parents. he started working age 23 and by age 29 he had put 300k GBP at the bank.
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Old 28.04.2020, 08:36
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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I took these 3 things out of your post.

You might have the 200K to put down, you however have nowhere near an income that would allow an 800K mortgage. I'd guess you can do half of that max (and don't forget the extra costs involved with buying) putting you in the market for houses of around 600K max.

Often people do forget that even tho they have the downpayment, they just lack the income for the loan.

I'd say forget about it for now.
Agree. No way is $1m affordable or even sensible. With a 'low' income and life savings sunk into the deposit, there's absolutely no financial capacity to account for any contingency that can come up as part of home ownership. What if financial crisis leads the bank to make a cash call of 100k or more? A heating overhaul costing 30k? IMO, way too much risk.
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Old 28.04.2020, 08:37
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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Ι had a friend who worked with me in London and he stayed with his parents. he started working age 23 and by age 29 he had put 300k GBP at the bank.
All the more reason to stop working and blow a bit of the money
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Old 28.04.2020, 08:58
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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All the more reason to stop working and blow a bit of the money
He bought a rental flat and put the rest in the stock markets after a few years. He still lived with his parents age 32-33.
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Old 28.04.2020, 09:06
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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Agree. No way is $1m affordable or even sensible. With a 'low' income and life savings sunk into the deposit, there's absolutely no financial capacity to account for any contingency that can come up as part of home ownership. What if financial crisis leads the bank to make a cash call of 100k or more? A heating overhaul costing 30k? IMO, way too much risk.
I see, your point makes sense for sure, I would like to just understand if, instead of being alone, I had a partner, that let's say, makes around the same, so we bring home 160-180k per year.
Considering the same amount in savings, 200k, would in this case be a smart financial decision to invest in a house of around 1million?

I'm trying to figure out if it's even worth go this path, or I should just invest all my money at 2-4% return yearly and go with rent.

I also read people suggesting buying a property to rent it out, but then, what are the numbers there? is there a calculator or guide to check how much would be worth renting out something, considering the price of the estate, interest rate and so on.

I'm a bit clueless in this stuff but I'm eager to learn and make the best financial decision
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  #28  
Old 28.04.2020, 09:07
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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Interactive Brokers account for investing and just a simple strategy with some stocks. However, I would buy the house in your case if you can afford the mortgage.
What is a simple strategy with "some stocks"? Income vs. growth? Large cap vs. small? Concentrated vs. diversified? Emerging vs. mature markets? Defensive vs. cyclical? Currency mix, ESG and ethical investing etc etc Are (100%) stocks even the right asset class for his risk profile?

The OP has said he is clueless about investing. In which case he may as well use the dartboard approach to picking individual stocks to invest in.

Surely it would be better for the OP to learn enough about the topic to at least understand what I have written above and then find cheap funds/ETFs either active or passive, depending on his preference? Yes, he will lose some of the performance in fees, but would also also hopefully minimise expensive mistakes.
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  #29  
Old 28.04.2020, 09:08
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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200,000 is peanuts. Save it for a rainy day. And that can happen at ANY time.
not sure if you are sarcastic! If not, are 200k really considered peanuts? Like the only comparison I have, are all my friends, and there is no one among them, that by his 30, had 200k in the bank, and we are all university educated with good jobs!
I made so many sacrifices to get here, but maybe I just compared my situation with my close circle, and in the "bigger picture" 200k are really peanuts in switzerland
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Old 28.04.2020, 09:13
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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I see, your point makes sense for sure, I would like to just understand if, instead of being alone, I had a partner, that let's say, makes around the same, so we bring home 160-180k per year.
Considering the same amount in savings, 200k, would in this case be a smart financial decision to invest in a house of around 1million?
That is a big if. You need to find a partner that you trust and can live with. Do not look for a partner, so that you can make a financial commitment. I say commitment rather than investment because you are signing up for a loan together, not just making an investment. You are putting down 20%, they are putting down 0% and the bank is putting down the rest, for which they want repaying.
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  #31  
Old 28.04.2020, 09:15
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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What is a simple strategy with "some stocks"? Income vs. growth? Large cap vs. small? Concentrated vs. diversified? Emerging vs. mature markets? Defensive vs. cyclical? Currency mix, ESG and ethical investing etc etc Are (100%) stocks even the right asset class for his risk profile?

The OP has said he is clueless about investing. In which case he may as well use the dartboard approach to picking individual stocks to invest in.

Surely it would be better for the OP to learn enough about the topic to at least understand what I have written above and then find cheap funds/ETFs either active or passive, depending on his preference? Yes, he will lose some of the performance in fees, but would also also hopefully minimise expensive mistakes.
Thank you for the answer! I am clueless (by clueless I mean that I don't have the knowledge to know WHERE and on WHAT to invest) but in Uni, my secondary branch was economics while my major was computer science, so I got a basic knowledge of finance/stocks.

But I'm eager to learn! And I would like to know, if I want to avoid the big banks to invest, because of their fees, what would be the best platform to do so in Switzerland ? (I would like to avoid Non-Swiss platforms, like Interactive Brokers, so only swiss-based ones)
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  #32  
Old 28.04.2020, 09:16
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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not sure if you are sarcastic! If not, are 200k really considered peanuts? Like the only comparison I have, are all my friends, and there is no one among them, that by his 30, had 200k in the bank, and we are all university educated with good jobs!
I made so many sacrifices to get here, but maybe I just compared my situation with my close circle, and in the "bigger picture" 200k are really peanuts in switzerland
Ignore him or alternatively read some of his other posts and then decide to ignore him.

You've done very well to get to your capital position with that level of income by your age. It sounds like you have sacrificed a lot. I would caution that life should be about balance.
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  #33  
Old 28.04.2020, 09:40
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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I see, your point makes sense for sure, I would like to just understand if, instead of being alone, I had a partner, that let's say, makes around the same, so we bring home 160-180k per year.
Considering the same amount in savings, 200k, would in this case be a smart financial decision to invest in a house of around 1million?

I'm trying to figure out if it's even worth go this path, or I should just invest all my money at 2-4% return yearly and go with rent.

I also read people suggesting buying a property to rent it out, but then, what are the numbers there? is there a calculator or guide to check how much would be worth renting out something, considering the price of the estate, interest rate and so on.

I'm a bit clueless in this stuff but I'm eager to learn and make the best financial decision
Personally, I'd want to have at least 100k-200k beyond the 20% deposit as well as pulling in 100k in savings annually over 2 or more income streams to be comfortable with taking on a million in debt.

Frankly, at current yields, you're probably only getting <2% return so <6% over the long term with leverage (assuming interest rates stay low for a substantial period of time). I wouldn't consider it a great investment, but it is guaranteed rent savings assuming nothing goes wrong.

The problem is that you have all your eggs in one basket. I wouldn't want a single house to be more than 30% of my assets.
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  #34  
Old 28.04.2020, 10:09
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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What is a simple strategy with "some stocks"? Income vs. growth? Large cap vs. small? Concentrated vs. diversified? Emerging vs. mature markets? Defensive vs. cyclical? Currency mix, ESG and ethical investing etc etc Are (100%) stocks even the right asset class for his risk profile?

The OP has said he is clueless about investing. In which case he may as well use the dartboard approach to picking individual stocks to invest in.

Surely it would be better for the OP to learn enough about the topic to at least understand what I have written above and then find cheap funds/ETFs either active or passive, depending on his preference? Yes, he will lose some of the performance in fees, but would also also hopefully minimise expensive mistakes.
He needs to work with a stock advisor. Agreed, by himself he may lose money unless he spends lots of time studying the topic.

Rental flat is also an option (not rental house).
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  #35  
Old 28.04.2020, 10:12
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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not sure if you are sarcastic! If not, are 200k really considered peanuts? Like the only comparison I have, are all my friends, and there is no one among them, that by his 30, had 200k in the bank, and we are all university educated with good jobs!
I made so many sacrifices to get here, but maybe I just compared my situation with my close circle, and in the "bigger picture" 200k are really peanuts in switzerland
It is not peanuts if you are 30 yo but to be honest you could have made more/saved more given that you lived with parents. The example I posted in London says it all but that was 10-15 years ago when interest rates hit 6% and it was easier to accumulate money due to compounding. Now it is much more difficult but still 200k is a good amount for Switzerland. If it was Italy for example probably you would have saved 40k tops.
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Old 28.04.2020, 10:15
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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And I would like to know, if I want to avoid the big banks to invest, because of their fees, what would be the best platform to do so in Switzerland ? (I would like to avoid Non-Swiss platforms, like Interactive Brokers, so only swiss-based ones)
A) What is your reason for that?
B) Popular options are CornerTrader and SwissQuote, with some even PostFinance.
But I don't accept their fees and work with InteractiveBrokers.
Alternatively you could also look at Degiro as they have some "fee free" ETFs on offer.
For Swiss platforms, you can take a look on options yourself here, according to your profile: https://www.moneyland.ch/en/onlineTrading/index.

Regarding what to invest in, I encourage you to explore a bit more on your own before listening to advice online.
But a good, simple and cheap start, before you feel confident (and develop a rationale for investing decisions) with anything else, could be a broad worldwide market-cap weighted ETF, i.e. you simply buy "everything", like VT or VWRL.
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Old 28.04.2020, 10:17
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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not sure if you are sarcastic! If not, are 200k really considered peanuts? Like the only comparison I have, are all my friends, and there is no one among them, that by his 30, had 200k in the bank, and we are all university educated with good jobs!
I made so many sacrifices to get here, but maybe I just compared my situation with my close circle, and in the "bigger picture" 200k are really peanuts in switzerland
Just ignore him. 200K is not peanuts.

A lot of younger Swiss are unable to put down any deposit on a house or apartment as they prefer to spend their money on fast German cars and other flash non-essentials.
You've been incredibly sensible.

The property market could be pretty volatile in the next few years -people may predict what could happen but no one knows for sure so buying property now could be a risk.
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Old 28.04.2020, 11:02
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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Find a cheaper place to live and build up your reserves for the day, you will not have a job or you get tired of it and want to get out early or are forced out.
This is good advice. I am 47 but working 60% (by choice). Ive always saved my money and never really spend it (no children). I am also looking to buy a house. Want to use pension fund and most of my saving to buy a decent place (cannot afford nice...) without need for mortgage. Plan is to have roughly 100k left in savings to live of in case I want to stop working or I am fired. I will inherent from parents, enough for at least 10 years living with no income. Then sell the house and live from the proceeds. I am not really counting on any pension or AHV income...
Am looking for a house now in CH. But if I cannot find anything I like before I turn 50, dependent on how I feel about work I will move and look for a place on the Canary Islands.
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Old 28.04.2020, 11:24
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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A) What is your reason for that?
B) Popular options are CornerTrader and SwissQuote, with some even PostFinance.
But I don't accept their fees and work with InteractiveBrokers.
Alternatively you could also look at Degiro as they have some "fee free" ETFs on offer.
For Swiss platforms, you can take a look on options yourself here, according to your profile: https://www.moneyland.ch/en/onlineTrading/index.

Regarding what to invest in, I encourage you to explore a bit more on your own before listening to advice online.
But a good, simple and cheap start, before you feel confident (and develop a rationale for investing decisions) with anything else, could be a broad worldwide market-cap weighted ETF, i.e. you simply buy "everything", like VT or VWRL.
Thank you for the answer!
A) the reason behind this, I've got close friends from UNI that now are working at UBS/Credit Suisse, investment department, and after telling me to NOT use their banks for wealth management, because of their fees, to look for a Swiss platform (they suggested swiss quote), because even if you pay a small premium compared to international/usa platforms, if I put a lot of money there, it's safer if the company is Swiss, if something bad happens and you can have more problems withdrawing from International platforms compared to Swiss ones!
That is what I've been told, if it makes any sense!

And when the quarantine is over, I ll be meeting with one of them, working in Investments, and I wanted to get a general feeling before that, so I know a little bit about ETF's and good investment options, so I can ask questions and so on!
But of course before investing I will take all the advice I find online, from my friend and from my research, then compare it and make a choice!
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Old 28.04.2020, 11:26
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Re: Should I buy a home or invest? I just reached 200k in savings and they are sittin

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Just ignore him. 200K is not peanuts.

A lot of younger Swiss are unable to put down any deposit on a house or apartment as they prefer to spend their money on fast German cars and other flash non-essentials.
You've been incredibly sensible.

The property market could be pretty volatile in the next few years -people may predict what could happen but no one knows for sure so buying property now could be a risk.
Ok thank you for the input!
I see how the market could be volatile in the following years because of all that is happening! And while it settles down, I 'm trying to figure out if it does really make sense to buy a property compared to rent and invest the capital! That is my big question mark!
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