My New Journey to Financial Freedom

unbalanced

unbalanced

New member
Hi everyone, I'm new here. šŸ‘‹


First of all, I want to thank Baptiste. Iā€™ve learned a lot from his blog, and when I saw he had a forum, I jumped right in! :)


Let me be honest and share a bit about my journey. Unfortunately, Iā€™ve realized many things too late and missed several opportunities. However, I now have a clearer idea of what to do (and what not to do).


Iā€™m a 40-year-old software engineer earning 120k CHF annually, + a monthly child support payment of 330 CHF. Iā€™ve decided to invest most of my extra funds since we have a separate emergency reserve that covers 3ā€“4 months.


Initially, I was considering buying a house and was almost ready to proceed. However, after my calculations, I realized that investing was a more logical choice. In fact, I even gave 42k CHF to my parents so they could purchase a summer flat in my home country. Also, my wife has already set aside this yearā€™s tax money, so Iā€™m not factoring tax deductions into this yearā€™s calculations.


My monthly expenses total around 4,700 CHF (including Serafe, car tax and insurance, home insurance, etc.). Typically, after deducting roughly 1,200 CHF for taxes and 1,000 CHF for other contributions (ahv, bv etc), I net about 8,130 CHF, leaving me with around 3,430 CHF per month after covering my expenses.


I plan to invest 3,000 CHF for myself and set aside 330 CHF for my daughterā€™s future (sheā€™s about 15ā€“18 years away from independence :)) ).


My current investment strategy is as follows:


  • ETFs (80%): Iā€™m allocating funds monthly into ETFs. Based on my analysis, Iā€™ve chosen a portfolio mix of:
    • VOO: 40%
    • SCHG: 30%
    • SMH: 15%
    • SCHD: 15%
  • Cryptocurrencies (20%): Iā€™m focusing solely on Bitcoin and Ethereum. Given my long-term horizon, Iā€™m comfortable taking on a bit more risk, and I believe in the future of crypto.
This means out of my monthly 3,330 CHF available for investment, approximately 2,664 CHF goes to ETFs and 666 CHF to cryptocurrencies.

Currently, I have a lump sum of 10k CHF in Interactive Brokers (with an initial 550 CHF already invested in ETFs). I also hold around 26k USD in crypto, mostly in altcoins, which are quite risky (I had more than 55k USD). I plan to leave those as they are (perhaps with occasional rebalancing) and direct all new crypto investments exclusively to BTC (60%) and ETH (40%).


In 2023, I made my first deposit into my 3a account, but I skipped deposits last year and this year. Iā€™m not entirely sure if that strategy is logical, especially as I aim to retire early and might even leave this country. I suspect my personal investments could eventually outperform the benefits of the 3a, though I might be mistaken.


A bit about my side situation: my wife is currently not working, and I have a side project generating token-based income. It currently earns around 600 USD per month (it used to be over 1,500 USD when the market was better). I plan to reinvest any additional side income directly.


In short, my goal is to achieve as much financial freedom as possible and spend more time with my family. Iā€™m not after a luxurious lifestyleā€”just enough to free myself from working for someone else. (hello boss šŸ˜… )


I welcome any advice, criticism, or thoughts on my topic.

Thank you all in advance


 
Welcome to the forum, and thanks for sharing your story!

It looks like you have your future well thought! Congratulations on taking all these steps for the future of you and your family.

I cannot comment on the crypto strategy, although it seems reasonable to focus on BTC and ETH. If you are comfortable with 20% in crypto, this is fine for your situation.

How early are you planning to retire? I am asking because if you are 40, you may not have that long for your portfolio to grow, right?

unbalanced said:
In 2023, I made my first deposit into my 3a account, but I skipped deposits last year and this year. Iā€™m not entirely sure if that strategy is logical, especially as I aim to retire early and might even leave this country. I suspect my personal investments could eventually outperform the benefits of the 3a, though I might be mistaken.
Click to expand...

This may make sense depending on your marginal tax rate. With your income in some of the low tax canton, the returns on the 3a may not be that great, but if you are in a worse canton, this may be interesting.

You can use this calculator to figure it out.

Third Pillar Contribution - The Poor Swiss

This calculator will simulate a contribution into a third pillar and compare it with an investment into free assets (outside retirement benefits). This
thepoorswiss.com thepoorswiss.com

unbalanced said:
ETFs (80%): Iā€™m allocating funds monthly into ETFs. Based on my analysis, Iā€™ve chosen a portfolio mix of:
  • VOO: 40%
  • SCHG: 30%
  • SMH: 15%
  • SCHD: 15%
Click to expand...
I think there is a lot of overlap in this portfolio. SCHG, VOO and SCHD are all only US stocks. They are not adding anything one to another. You should pick one, and I would recommend VOO over the others. If you only want US stocks, then do 85% VOO and 15% SMH, this will save yourself in fees and rebalancing and simplicity. If you want some international diversification, you can use VT either instead of VOO or next to VOO (if you want to keep the US bias.
 
Hi Baptiste, thanks a lot for your detailed reply and the useful insights.


Regarding the crypto allocation, I agree that 20% might seem risky, but Iā€™m mainly focusing on BTC and ETH, and I believe that over a 15ā€‘year horizon, this approach will pay off.


As for retirement, I like to joke that I aim to retire ā€œtomorrow,ā€ though I know thatā€™s not realistic :D .
Iā€™m aware Iā€™m starting a bit later than ideal, so Iā€™m actively looking for ways to boost my income to invest even more. I truly appreciate all advice on how to accelerate this process.


A few more points on my situation:

- I live in Basel-Land, where taxes are higher than in Basel-Stadt. Thatā€™s partly why weā€™re looking for a flat in Basel-Stadt, even though Iā€™m currently paying high rent, any leftover funds after rent will go straight into investments.

- My initial plan was to allocate 80% to VOO. However, after finding SCHG, which offers a higher dividend yield, I decided to include it, leading to some overlap with SCHD as well. I checked this website for more details on overlap issues: etfrc.com/funds/overlap.php.
I realize that my heavy focus on US stocks might be risky, so Iā€™ll definitely consider adding VT for international diversification. Ultimately, Iā€™m targeting an annual return of around 13% with dividends. :D

Tax Question
- I ā€™m a bit uncertain about the tax declaration process for these ETFs since Iā€™m not planning on withdrawing any funds soon. I recently transferred 10k CHF from my account to IBKR (after having paid tax on it), so I hope thatā€™s all in order.

I also have crypto spread across various exchanges and wallets. Because their values are so volatile. Sometimes 10k, other times 50k. I havenā€™t declared them yet to avoid unnecessary complications. Iā€™m hoping to simplify this in the future, especially since I have another citizenship that might offer more flexibility for transferring funds. For now, Iā€™m leaving these as they are.


Thank you again for your feedback. I look forward to any further advice you or others might have
 
unbalanced said:
I realize that my heavy focus on US stocks might be risky, so Iā€™ll definitely consider adding VT for international diversification. Ultimately, Iā€™m targeting an annual return of around 13% with dividends. :D
Click to expand...
Be careful that 13% per year in CHF is very high.
unbalanced said:
- I ā€™m a bit uncertain about the tax declaration process for these ETFs since Iā€™m not planning on withdrawing any funds soon. I recently transferred 10k CHF from my account to IBKR (after having paid tax on it), so I hope thatā€™s all in order.
Click to expand...
It's really not that difficult. I think have an article about it:

thepoorswiss.com

How To File Your Taxes With Swiss And Foreign Securities In 2025 - The Poor Swiss

A step-by-step guide to file your taxes with Swiss and U.S. securities. It is really not that complicated!
thepoorswiss.com thepoorswiss.com

unbalanced said:
I also have crypto spread across various exchanges and wallets. Because their values are so volatile. Sometimes 10k, other times 50k. I havenā€™t declared them yet to avoid unnecessary complications. Iā€™m hoping to simplify this in the future, especially since I have another citizenship that might offer more flexibility for transferring funds. For now, Iā€™m leaving these as they are.
Click to expand...
Not declaring anything is always a bad idea. Since we pay wealth tax in Switzerland, you are supposed to declare everything. And when things appear out of nowhere suddenly, this may trigger some red flags at the tax office.
 
unbalanced said:
- I live in Basel-Land, where taxes are higher than in Basel-Stadt. Thatā€™s partly why weā€™re looking for a flat in Basel-Stadt, even though Iā€™m currently paying high rent, any leftover funds after rent will go straight into investments.
Click to expand...
Just curious: how much is a high rent in Basel-Land?
 
Baptiste Wicht said:
Be careful that 13% per year in CHF is very high.

It's really not that difficult. I think have an article about it:

thepoorswiss.com

How To File Your Taxes With Swiss And Foreign Securities In 2025 - The Poor Swiss

A step-by-step guide to file your taxes with Swiss and U.S. securities. It is really not that complicated!
thepoorswiss.com thepoorswiss.com


Not declaring anything is always a bad idea. Since we pay wealth tax in Switzerland, you are supposed to declare everything. And when things appear out of nowhere suddenly, this may trigger some red flags at the tax office.
Click to expand...
Thank you a lot for your reply.

I understand that the 13% rate is high :) , but itā€™s manageable with dividends. I also have a strong position in crypto, which I believe will help balance things out in the long term.

Thanks for the link. Iā€™ll check it out. My wife handles the tax matters.

I'm a bit too lazy to add everything myself, but I'll probably add the ETFs, although not the crypto since that seems like too much work.


@Max, we are paying 2294 for a four-room flat in Allschwil.
 
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I have a couple of questions regarding the tax declaration for crypto assets:
  1. Once I've read that if you're not considered a professional trader and don't earn more than 100k from trading, then you're not taxable in Switzerland. Do I understand that correctly?

  2. If I hold around 50 different altcoins, how should I declare all of them? Considering factors like staking rewards, various airdrops (both big and small), and the frequent buying and selling of tokens, it all seems very complicated. How do you manage tracking and declaring everything accurately?
 
unbalanced said:
Once I've read that if you're not considered a professional trader and don't earn more than 100k from trading, then you're not taxable in Switzerland. Do I understand that correctly?
Click to expand...
If you are not a professional trader, your capital gains are not taxable, but your wealth is still taxable.

unbalanced said:
If I hold around 50 different altcoins, how should I declare all of them? Considering factors like staking rewards, various airdrops (both big and small), and the frequent buying and selling of tokens, it all seems very complicated. How do you manage tracking and declaring everything accurately?
Click to expand...
I am not an expert, but you would have to declare at least the value on the 31.12 of the previous year so that that wealth can be taxed properly.
In theory, you may have to declare all transactions because that can help the tax office differentiate between professional and non-professional traders, but I know many people do not do that.

And when in doubt: Ask the tax office.
 
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