Blogger Saving Rate INDEX (Silver Badass Saver).

Dear Friend,

Mustachian Post another Swiss FI blogger created 2 years ago the Blogger Saving Rate Index, this year results was published in his last post (Blogger Savings Rate Index 2016).

Last year, we obtained the Silver medal with a saving rate of 44.3%, this the best rate we obtained so far. Let’s see if we can continue like that in 2017.

2016_bsri_silver_badge

Check-out the others Badass savers from his excellent blog. MP is inspirational for me and we funny enough, we were working on the same project buying our own house. He completed this project before us. As you know we will move in our own apartement in 2018, still 1.5 year to go.

Cheers,

RA50

Yes, we have signed the contract for the building of our apartment

Dear FI,

Another step in our objective to own an apartment in Switzerland, we have signed the construction contract with the architect as well as we bought the part of the land that we own based on the surface of our future apartment.

I must say that we are very happy but at the same time, a bit stressed because you know that now you have a big debt to the bank and that you hope that nothing will happen: lost of my job, accident, and worst death. so yeah, doing this crazy purchase is quite stressful.

The construction of the building has started 2 months ago with first, the destruction of of the old house. Then they dig around 10 meters for the foundation and the garage. So there is not much except a big hole in the middle of the city.

Looking forward to see some part of building coming up the ground.

I will update you soon with our financial.

Wish you a good weekend and best regards

RA50

2015 Bonus (Variable Incentive Compensation)

Dear all,

This week was the big week as we received our 2015 Bonus and last year, I was very happy with my bonus (Yes, Yes and Yes).  Guess what, this year it’s even better!

The company I work for had a great year, all financial metrics were above the objectives and as the bonus takes into account the company performance x my performance x my rate based on my job description (Functional move – Positive financial impact) and my own performance was quite good.

So the results is that, we get a bonus of 53k CHF; yes, you read it right correctly half 100k. Ouhaa, when you look at your paycheck and it’s 3.3 times more than the previous month, it makes you a nice smile on your face :-).

And it’s great news, because that goes straight to our account for the purchase of our apartment. So it’s an excellent start of the year, I am already thinking of the next year bonus, hopefully it will +/- equivalent.

What about you, do you variable incentive compensation? is it based as well on your performance? And when do you receive it?

Wishing you a good weekend,

Cheers,

RA50

Difficult not to invest

Dear all,

As me, you are probably on the edge to know if it’s the right time to invest considering the significant market fluctuation.

As said in our previous post, we are going to invest in an apartment, so we had to sell quite a lot of our position to have enough cash for the requested 30% of own equity. Therefore, we are sitting on slightly more than 400’000 CHF. In a way that makes me crazy, we could have invested quite a lot especially when the market dropped by around 10-15%.

On top, we are close the dividend distribution, so we could have make good money but I cannot take any risks at this moment and risk to have the cash at disposition because market drop again.

If we were in this situation, what we would have bought? We would have invested in Swiss RE for the high dividend yield, Roche and Novartis and probably Nestle, even if the 2015 results were not extraordinary but the potential is there.

So we are looking at replenish our broker account to be able to reinvest but we start almost from scratch, hopefully our positions will give us around 10’000 CHF, thanks to UBS and Credit Suisse that will distribute their dividend from their reserve and therefore not subject to taxes, that’s good for us.

Next week, I will receive my annual bonus, so part of it goes for the apartment and the other to our broker account. I will give more details in the next post.

What about you, have you been able to pick to drop to make some shopping or are you waiting for a more stable market situation?

Cheers,

RA50

Mortgage for our new apartment

Dear all,

Let me give you some information regarding our future new apartment:

It is a new construction and the completion is due in autumn 2018. Yes, you read it right 2018, so a certain number of article will be published until we move in :-).

As you already know based on several previous posts, everything is very expensive in Switzerland and it’s not surprise, houses, apartment and construction follow the same rule. So please attach your seat belt, we are purchasing a property for an amount of 1’535’000 CHF, yes, 1.535 mio. CHF. If we put all our wealth + our pension fund, we still missing around 90’000 CHF!

Clearly, we need to go to the bank to get a mortgage. By Swiss law, 20% of this purchase price must come from own equity, so 307’000 CHF, so you think that’s ok, fairly easy to get in our case. But when, you go to see the banker, he says that the loan need to consider additional information, like your salary, family situation (kids, wife working, etc.), so the 20% transform to 30%.

In discussion with the banker, we added 55’000 CHF to the purchase price to cover the notary fees + some additional reserve, so final price will be 1’590’000 CHF. We decided to put 530’000 CHF of own equity; therefore our mortgage will be 1’060’000 CHF.

I mentioned that the building need to be constructed, which mean that we cannot have a regular mortgage but a construction mortgage that will be transformed in a regular mortgage when we get the key of our apartment. Unfortunately for us, the construction mortgage is more expensive than the regular one 😦 we get it at 2.5% compare to an average of 1.7% for the regular one). The only positive point, is that loan enter in action only when the constructor need the money, and based on pre-defined schedule, 10% at the start of the construction, 20% when the first floor is completed, 30% when the 4 floor is completed, 30% when the windows are fixed and 10% at the key delivery. So we don’t pay interest on the full amount until we get to the end.

Something that we didn’t know is that the notary fee is of 5% of purchase price, so in our case it would have been 76’750 CHF but as we are construction mode, we just need to pay the fee based on the ground price, which is 322’000 CHF and therefore the notary fee will be only 16’100 CHF, which is an economy of around 60’000 CHF, that not bad and was a good surprise.

We will sign the contract in April; you will get more details on further posts.

Cheers, RA50

 

 

 

oh Boy, what a 2016 start

Dear friend,

I am sure that you thought that we left the net after one month without a post. No, we are still on the air, but so many things happened that I had no time or too tired to write new articles.

I will summarize, what happened during the last month:

  1. With Mrs Retired, we took a big decision by buying an apartment in Switzerland (more details to follow in specific posts)
  2. On the 2nd of January, Retired50 celebrated ONE YEAR anniversary!!!
  3. The market goes crazy and the variability is not controllable
  4. First step in preparation of the min 20% equity to put down for the purchase of the appartment (sold SwissRe and Roche shares)
  5. Meet with banker for the first mortgage meeting

So, I am preparing some articles to explain you what is required to buy a house/apartment in Switzerland .

Wish you a good weekend

Cheers, RA50

Merry Christmas

Dear all,

We would like to wish all of you a Merry Christmas, hoping that this day will be full of happiness, joy and fun.

In 7 days, retiredat50, will celebrate it’s first anniversary, one year in the blogging world, I must say that is a great experience but challenging at the same time to find the time, to blog on subject that would interest you. Since I move job (October) that time even reduced further.

The next 4-5 months will be the fun months for dividend paycheck, as you know in Switzerland companies paid in one time and not every quarter.

I will prepare the post for our dividend simulation to give you an overview of what’s coming, but I am already expecting a lower dividend income as most of the companies will this year distribute regular dividend (taxable @ 35%) and not cash distribution.

Again, we wish you a great Festive Season and enjoy your families and friends.

Cheers, RA50 Family