August was more disappointing than July because of medical expenses and money advanced for gifts. We are therefore below the 50% savings rate this month...
On the other hand, the good news is that we were finally able to open our account (consignment account for the moment) of our new Swiss LLC!
If you are new to the blog, I recommend reading the article that introduced this series about my net worth (including my lucky number, as well as the rules of the game).
Also, following questions from some readers, I would like to point out that the green or red figures below correspond to the relative evolution compared to the previous month, and not to the absolute amounts of the current month.
August: restaurants (again!), car breakdown, SBB half-fare, ophthalmo, orthodontics, new shoes Mrs. MP, booking autumn vacations, and gifts
CASH FLOW AND SAVINGS (-CHF 14'116.83): Don't get it wrong, negative cash flow doesn't mean we've completely cracked up spending like crazy over the vacations. It simply represents a transfer of CHF 20'000 to our new Swiss LLC account :) (more info about this below).
As usual, let's take a look at our unusual expenses first:
- Restaurants: as in July, these restaurants were all worth it. Especially the one with Mrs. MP to celebrate our crossing of the half million CHF of net worth's milestone Nevertheless, with ~CHF 500 spent, it is still too high compared to our average. I'm on the verge of the second yellow card that would bring us to the red card... not good!
- Car breakdown: I'm telling you that a breakdown on a Toyota Prius is very rare. Our beloved's age is advancing and we had to change the water pump. Total bill: about CHF 500...
- SBB half-fare: as every year in summer, it's time to renew our two half-fares with Mrs. MP. Mine is at CHF 150 as I am a long time customer, and Mrs. MP at CHF 165 as she is newer in their systems ;)
- Medical: that hurts! A new pair of glasses for one of our toddlers, vaccine reminders, and dental stuff. A good trio bringing us to more than CHF 2'000 of bills in August alone. Fortunately, we have the right level of Swiss health insurance and complementary health insurance so we should get back some of these funds quickly. Phew!
- Shoes: Mrs. MP had hiking shoes that were 9 years old. So she bought a new pair at CHF 90 — which will cost us CHF 10/year if she keeps them that long :)
- Vacations: our originally planned vacations having been cancelled (cf. July recap), we planned a plan B for the month of October with a vacation at home in Switzerland. As a result, the prices are not the same... In short, it will not be under the tent, but at the hotel with half board this time. And thanks to our friend Google, we came across a very good deal with the "Vacances Migros" website. I would never have thought to look on their site, but they manage to negotiate really great offers. We saved about 30-40% of the price compared to what Booking and co were announcing us
- Advances of expenses: we organized some big birthday presents in August (long live the round figures...). As a result, I count this in a separate expenses category in YNAB. And directly after that, I add a credit transaction (at the expected repayment date) that represents when the person will repay us in the future. So I never forget when someone owes us cash ;) (especially such large amounts — we're talking about more than CHF 1'000 here!)
Concerning unusual cash inflows (i.e. excluding our Swiss salaries):
- A tax refund for overpayment of taxes in 2019 following our last tax return: CHF 720 which are welcome :)
- Two reimbursements from Assura and Groupe Mutuel for about CHF 150
- Some micro-dividends from our Daubasses shares
- I repeat it every month, but I think I will never get tired of it: many of you have used my recommendations to save as much as possible on your Swiss bank charges (often more than CHF 300/year) as well as on your brokerage fees as a Swiss investor. And I'm not talking about the "Kickstarter" support of my book project (which is by the way coming out on Tuesday, November 24th, 2020 — note the date in your calendar!) Thanks again to all of you for supporting the blog by using my affiliate links. It's really nice to see it take off in terms of revenue, while bringing you value
STOCK MARKET INVESTMENTS (+CHF 7'241.75): This incremental amount represents capital gains (unrealized, as nothing was sold) in one month. It's nice to see when you do your accounting at the end of the month and discover this figure on Interactive Brokers :D
Otherwise, no purchase (or sale) on the horizon because I keep all our current savings in cash in view of a potential real estate acquisition in France. I'll tell you more once we know if we're going ahead (or not), but for the moment we're waiting to hear from our bank. We're talking about a 600'000€ project...!
P2P INVESTMENTS (-CHF 36.39): No surprises on the Mintos side. I've stopped all investment, and I'm gradually getting my cash out. It's not that I wouldn't want to go faster, but the Mintos "Invest & Access" program doesn't allow me to. Once the account is completely emptied, I will close it definitively and do a post-mortem article to explain in detail my motivations for not continuing in P2P investments.
CRYPTOCURRENCIES SPECULATION (+CHF 278.41): Once it goes up, once it comes down. As unpredictable as we thought. The day I'm at +1 million CHF, I'll sell. In a century maybe...
MP'S 2ND PILLAR (+CHF 602.85): Filling my second pillar as usual.
MRS.' MP 2ND PILLAR (+CHF 352.20): Filling Mrs. MP's second pillar as usual.
MP'S 3RD PILLAR (n/a): Nothing to report because I make my lump sum payment at the beginning of the year (only Mrs MP is lucky enough to be at VIAC... my 3rd pillar being one of the guarantees for our mortgage), and my updated surrender value also comes at the beginning of the year.
MRS' MP 3RD PILLAR (+CHF 340.87): As Mrs. MP's pillar 3a is invested at VIAC 100% in global equities, its value also varies according to the stock market (and not only according to the CHF 564 paid monthly). This means that this August, our portfolio lost CHF 303.77.
SWISS LLC/GMBH/SÀRL (+CHF 20'000.00): As announced in a previous article, we finally opened our account (consignment one for the moment) for our Swiss LLC/GmbH/Sàrl. We will use this company to declare the income from the blog and other projects (coaching, book) and thus optimize our tax situation.
For your information, although I will detail it later, we chose to go with the Migros Bank which, at the time of writing, is the most frugal bank for corporates in Switzerland with its fees of CHF 3/month (no limit on the number of transactions).
APARTMENT AND MORTGAGE IN SWITZERLAND (n/a): Nothing to report, we still do not repay anything as mortgage rates are so low, and we have not made a revaluation of our property so we do not speculate with its value (i.e. we keep the amount of our initial 20% down payment that we had to pay when we bought our home).
REAL ESTATE INVESTMENT IN SWITZERLAND (n/a): As a reminder, the 30kCHF invested here is a participation in a real estate project (i.e. not in my own name). I am still considering getting 55% of annualized return.
RENTAL BUILDING IN FRANCE (n/a): Same as for our apartment in Switzerland, no speculation on the price of our rental property. We will wait until we want to sell it to make an evaluation.
MORTGAGE LOAN IN FRANCE (+CHF 719.13): The magic of real estate investment: the loan repays itself "on its own" thanks to the rents.
SCI (SOCIÉTÉ CIVILE IMMOBILIÈRE, REAL ESTATE INVESTMENT COMPANY IN ENGLISH) IN FRANCE (-CHF 545.87): The cash flow was negative in August because we had to change a toilet faucet (less than CHF 50), and especially because I readjusted the amount we had in euros in CHF with the exchange rate of the day (difference of almost CHF 1'000...). To clarify this last point: I have an automatic transaction in YNAB for each rent, and it's been since we got the building that I hadn't adapted the EUR-CHF exchange rate, so the variations accumulate quickly.
In terms of financial independence, we are at 24% of our objective of CHF 2'156'000 with our net worth of CHF 517'367.77.
Which visually gives us this:
Savings rate for August
In the end, we finished with a savings rate of 34% for August 2020. We continue to move towards a very good vintage for 2020. But we remain focused because the second half of the year has just begun, and we still have half a year to continue optimizing our revenues and expenses to widen the gap between the two as much as possible.
And you, what was your net worth and savings rate in August?
PS 1: if you also want to have access to bonuses such as the screenshot revealing the amount of each of my assets (I post it every month when this net worth update's article is published online), then you just have to become a patron of the blog via Patreon.
PS 2: I've added a new "bonus" for the blog's patrons. Since last month, I publish a live notification of my buy/sell on the stock market and other investments (translated into three languages like the blog — i.e. EN, DE, and FR). Just to be clear, I follow a rather passive investment methodology with ETFs disclosed on my blog, so you won't learn anything transcendental. But if it can motivate you to invest regularly and in a disciplined way, then I will have succeeded in my wager.