How I saved 10 CHF by changing my mobile plan

Hi,

Before I already had a very cheap mobile plan for my mobile phone. I was using MBudget Maxi One with 2GB of data per month for 29CHF/month. This is pretty cheap as Switzerland goes. However, I’m very rarely using mobile data on my phone. I’ve got Wifi at work, Wifi at home and Wifi at the gym. Some restaurants are starting to have Wifi, but this is not a lot in Switzerland.

So I decided to switch to the MBudget Mini One plan with 600MB of data per month for 19CHF/month. This will save me 10CHF/mo (120CHF/year). It’s not a big saving but it’s a correct one and a easy one. I’ll have to be a bit careful about using my phone when going out, but it should be fine. Since there are no delays, I can also switch back to Maxi One if I cannot keep below the limit, but this should be fine. This month, I’ve use less than 60MB on my phone.

So, if you pay a lot for your phone, be sure to check if there are no alternatives that could be more advantageous and try to save some money!

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Book Review: The Bogleheads Guide to Investing

Here is another book review about an investing book. This is the second book I read in my way to personal finance enlightenment: The Bogleheads Guide to Investing, by Taylor Larimore, Mel Lindauer and Michael LeBoeuf.

This book is a complete guide about personal investing, how to save money and how to invest it. I personally think it’s a really good book, well-written and full of very good advice. The book is full of quotes from other financial figures and every argument is well supported by facts.

What is really good about this book is that it’s very complete, it covers a lot of different subjects and contains really tangible advice that you can follow.

This book contains several very important messages:

  1. Avoid debt: This one is a no-brainer 😛
  2. You should start to invest early: By the magic of compounding, starting early even with small sums, will amount to a large amount
  3. Know what you are buying: This one is very important. You should only consider investing in assets that you actually understand. If you don’t understand an asset, you should not invest, you should always research before you invest or seek advice
  4. Know how much you need for retirement: If you plan to retire early, you should know exactly how much money you’ll need and how much expenses you have each month.
  5. Keep it simple: Invest in few index funds that are replicating the entire stock market and stick with you strategy
  6. Minimize the costs of your investments: Only use no-load funds with very low fees.
  7. Don’t try to time the market: Market timing is not possible in the long term, simply stick with your long-term strategy.
  8. Rebalance if necessary: If some of your assets are doing extremely well, as will be the case for stocks in a long run bull market, you should rebalance by selling some of your stocks and invest them into bonds. This should help you by buying low and selling high automatically. Not everybody likes this rebalancing idea, so you need to be careful about that. The important thing is to be aware that unbalancing will occur eventually.
  9. Diversify: Don’t put all your eggs in the same basket. There is no point in investing in two funds that have the same assets inside.

All these messages (and a lot more) are quite well explained and well supported by facts.

Overall, I think it’s a great book that deserve to be read. If you are willing to invest but don’t know exactly how, you should definitely take a look at this book and profit from its advice in order to elaborate a sound investment strategy.

Goals for 2018

For once, I’m gonna try to set clear goals for this year! I’ve set up a nice spreadsheet for my goals for this year (credits to retirebyforty for the spreadsheets idea):

I’ve tried to not see goals that are too high but still strive for better than this year. This is my first attempt at setting yearly goals, so maybe I’ll add new goals during the year, but I’ll not remove any goal nor downsize any goal.

Financial goals

The first goals and probably most important goals are the financial goals.

  1. Save 10’000 CHF: This was already my goal last year but I failed. This a really important goal for this year but I don’t know if it will be possible since I’ll have some big expenses planned.
  2. Monthly expense < 4500 CHF: I want my average monthly expenses to be below 4500 CHF this year. Again, given some very large expenses that are planned this year, I don’t think this is possible, but I’ll strive for it anyway.
  3. Max out my 3rd pillar (3000 CHF): Since I have a 3b life insurance, I can invest only 3000 CHF in my 3rd pillar directly, but this is something really important. I don’t think this will be an issue. I already did it last year.
  4. Dividend Income 500 CHF: I’d like my dividends to give me 500 CHF this year. I think it’s pretty doable with my new portfolio, especially if I’m able to save enough money to contribute to it.
  5. Add 5% EUR Bonds to the portfolio: I plan to change a bit my portfolio in order to add 5% bonds from the euro zone. I haven’t decided on which ETF to choose, but it will probably be an ishares.

Blog Goals

I don’t have great ambition for this blog, it’s more a hobby and a motivation tool for me, but I’ll try to develop it a bit more this year:

  1. Blog 24 times: At a minimum, I would like to blog around twice a month on this blog. This will probably be easy, but I didn’t want to put this goal higher in order to avoid pressure to post mediocre content.
  2. Get the blog out of wordpress.com: Currently the blog is simply a sub domain of wordpress.com. I plan to buy a .com (or .ch) domain for the blog. I don’t yet know if I will host the blog myself or get it hosted at wordpress.com, but I’ll see to that later. I’ll also do some SEO in order to give the site some visibility, but nothing fancy either.
  3. Add DEGIRO referral link: I plan to add DEGIRO referall link to the website as a small monetization tool.

Personal

A few personal goals, somehow related to this blog:

  1. Finish scanning all documents: I started scanning all my documents to store them safely in PDF format. This will save me quite some space at home and will also help me to find these documents if necessary.
  2. Get a new job from 01.08: My current job will finish the 31.07. By the end of March, I would like to have a contract signed for the next job.

Conclusion

That settles it for these goals. I think having clear goals like these will help me focus my effort during the year.

If you have comments on these goals, don’t hesitate to let a comment 🙂

Book Review: The little book of common sense investing

Since I started to pay closer attention to my finance, I’ve read a few books about investing and finance. I’m going to review them on this blog.

The first book I have read is “The little book of Common Sense investing”, by John C. Bogle. It is coming from the founder and former CEO of the Vanguard Mutual Fund Group. This book is highly recommended by a lot of people in the bogleheads community, so I decided to give it a try.

This is a good book, with sound basis. The idea of the book is simple: You should only invest in low-cost, no-load, mutual funds that replicate the entire market (index funds) and you should buy-and-hold these funds for as long as you don’t need the underlying money (no market timing). This message is quite repeated along the book. I honestly think that this book insists upon itself. It could have been much shorter than it his. Most of the chapters are simply showing, using strong facts, that most active funds cannot beat the market. Therefore, index funds are better for indexing, since over a long time, your returns will the same as those of the market. Moreover, the costs of passive index funds are generally significantly lower than active funds. The costs of the funds is actually one of the only things you have control over, therefore you should always minimize them. However, this book is quite well written and there a lot of strong facts with evidence. The author advice mutual funds rather than Exchange Traded Funds (ETFs). However, it is stated that ETFs are a good alternative as long as you don’t trade them but buy them and hold them.

Let’s review the main points of the book:

  • Prefer passive index funds rather than active funds
  • Use index funds that replicate the entire stock market or the entire bond portfolio
  • Choose the funds with the lowest costs (no-load, low TER)
  • Buy and hold for long-term
  • Never time the market
  • You can use ETFs but not trade them (buy-and-hold)
  • Minimize taxes

Overall, it’s a good book. If you already are convinced that passive index funds are better than active funds or stock selection, then, you probably wont’ learn anything new in this book. On the contrary, if you prefer active funds or prefer to hold stocks, you should probably read this book to get a different point of view. On the other hand, it lacks in advices on exactly which ETF to use, which allocation to bond and to international stocks, but it’s a very good starting point.

December 2017 Update + 2018 perspectives

Hi,

Happy new year to you all!

It is time for the last monthly update of 2017.

December 2017

December 2017 was quite good in terms of saving. The savings rate for this month is 34.67%. There was a lot of expenses with all the insurances and parking arriving at the end of the year, but I also got half of my 13th salary this month, which obviously helped.

In terms of spending, I have been able to keep it very low. I have been three weeks in the army, so I haven’t been going out a lot and haven’t needed a lot of food since I’ve been fed for free (at least one advantage to the army). I bought a few gifts and new gaming headset for my computer, nothing really fancy.

Here is an overview of my spendings:

  1. Insurances: 255.00 CHF – average
  2. Transportation: 1373.60 CHF – well above average (insurances and parking)
  3. Communications: 186.80 CHF – average
  4. Personal: 503.76 CHF – below average
  5. Food: 162.65 CHF – well below average
  6. Apartment: 1783.05 CHF – well above average (power and caution)
  7. Taxes: 705.45 CHF -average

As for my earnings, I’ve received a few gifts for Christmas (200 CHF) and the first dividend from my portfolio (50 CHF).

Portfolio

I’ve almost finished moving my portfolio to DEGIRO. Still one fund to sell from PostFinance, that I’ll sell when it gets back to earning.

Here is what I settled on for my portfolio:

  • 55% World Stocks – Vanguard Total World
  • 10% Swiss Medium Stocks – UBS SMIM
  • 10%  Europe Stocks – Ishares Europe
  • 10% High Divident – Vanguard High Dividend Int.
  • 5% Tech – Vanguard Information Technology
  • 5% Pacific – Vanguard FTSE Pacific
  • 3% Bitcoin – XBT ETN
  • 2% Ethereum – XBT ETN

I’m pretty satisfied of this portfolio except for the cryptocurrency part. I’ve been investing in cryptocurrencies for only one month and I already don’t like it. The volatility is way too high. Once they are back to earning, I’m going to sell both and transfer to an European bond ETF, probably from Ishares.

In total, my net worth is now 54’279.49 CHF.

2018 Perspectives

Starting from February, I’ll be finally be paid at 100% (from 85% now) since I’ve finished my Ph.D. This will make a nice increase in revenue. Moreover, this year, my company will increase very slightly the salaray, so that’s also a nice bonus as well. In August, I’ll very likely change my job, but nothing is final now, so more on that later. In any case, I’ll have a better salary from August. My current expenses should not increase in 2018, but there will be some big expenses in 2018, we’ll see how bad it turns.

As for January, it should be good, just a few gifts to buy. I expect a good saving rate, but I’m often wrong about that, so we’ll see about that.

 

November 2017 Update

Hi,

It is time for the monthly update.

November 2017 was not bad in terms of savings, but a bit lower than I was expecting. The savings rate for the month is 14.25%. It’s not perfect, but still much better than last month. My objective is to go to 25%, but probably will need a raise to go there (I’m still gonna try without the raise).

I had a few spendings while I was in China at the beginning of the month. Moreover, I also bought plane tickets to go back to China in February. It’s a very fair price (598.50), but still puts a big dent in my savings.

Here is an overview of my spendings:

  1. Insurances: 255.75 CHF – average
  2. Transportation: 140.43 CHF – below average
  3. Communications: 163.35 CHF – average
  4. Personal: 1318.56 CHF – above average (plane tickets)
  5. Food: 297.47 CHF – below average
  6. Apartment: 1300 CHF – average
  7. Taxes: 805.45 CHF – above average (firefighter tax)

I have started to transfer my investments to DEGIRO. I still need to transfer quite some money and I still need to sell some PostFinance funds, but they are at a loss now, I’m still waiting before I sell and transfer. I still have to decrease my cash and bonds, but that will done slowly in December. I’ll post an update once my portfolio is updated and ready. Once my portfolio is more or less ready, I’ll also include my net worth in the monthly update.

December should be quite good since I’ll have half of my 13th salary. However, there will some big expenses as ever at the end of the year (already paid 245CHF today for parking at my company). Moreover, I’ll be three weeks in the army. Even, if it’s not an happy deal, I’ll still save some money on food. I’ve done some effort to reduce the recurring monthly expenses. Indeed, I’ve reduced my rent and changed my car insurance.  Moreover, Iv’e also changed my Internet provider contract, saving about 50 CHF per month starting this month!

First deposit at DEGIRO and first ETF investment

My first deposit just reached my DEGIRO broker account! Let’s start with the good, there is no fee for transfer! I’ve transferred 1000 CHF and exactly 1000 CHF arrived in my account. I was afraid of an hidden fee or transfer fee. With the bad now: The transfer took 8 days. I sent the transfer Friday 17th, it was debited from my account Monday 20th and only arrived today, Tuesday 28th on my broker account. I’ve contacted DEGIRO several times in the meantime to inquiry as to the whereabouts of my money. They did have an issue with their bank (CIC Bank, Basel) that was not transferring the money statements to them for about a week. So, normally, this should not be so slow. I’m inclined to give them the benefit of the doubt for this one. I’ll see what happens to my second transfer that was debited yesterday (should arrive tomorrow on my DEGIRO account). If this is something that happens regularly, this is a really bad thing for DEGIRO, but we’ll see.

With some part of this money, I bought 13 shares of Vanguard Total World Stock ETF (VT) at 73.16 USD. This ETF is a passive fund that holds 7955 stocks in the entire world, weighted by capitalization. It contains around 50% of the stocks from US and the rest is from the entire world. It contains 2.6% of stocks from Switzerland. It has a very low Total Expense Ratio (TER) is 0.11%, which is very low and absolutely fine for me.

Since this ETF is in the list of free ETF offered by DEGIRO, I didn’t pay any fee to buy the shares. Nevertheless, I paid a small fee for the currency conversion. I paid 0.19CHF on an order of 936.80 CHF, which means a fee of 0.02%. This is pretty good since I was used to pay 0.5% fee for funds on PostFinance 🙂

The buy was pretty easy do on DEGIRO, no issues here. At first, not very clear, but it turned out quite OK. I’ll post more information on the future on how to use DEGIRO. I received a mail notification for both the deposit and the trading transactions. Everything seems fine.

I’m not totally sure on my final portfolio, but VT will definitely be a part of it and probably a large part at that. I’ll keep you up to date as soon as I update my portfolio.

N.B. I’m not a financial advisor and not nearly an expert in investing. What I share here is my experience, not financial advices.