Managing personal funds
I've been trying to make a plan about how to manage my future earnings. Here's roughly how that plan currently looks like. I would like to hear what people think about the overall structure of the plan, as well as give me some answers to the questions that appear throughout. I'm talking about solid 6-digit income in the first year of employment, expected to grow in the future.
Here's how I plan to partition it:
1) Most liquid, accessible form: ~10% of it to be saved in Bank of America or a similar bank with easily accessible ATMs, and overall easy and simple to spend for usual, everyday needs. Not meant to earn interest or anything like that. Mostly for convenience.
2) Savings in an American bank, in dollars ~20%. This will be money expected to earn reasonable interest, as well as be accessible in case of dire need. Is this a good idea? Which bank would you recommend that is secure enough, but also pays decent interest?
3) Savings in a Swiss bank, ~40%, in Swiss franks. This is to safeguard against the dollar plummeting, as well as meant to be my bulk life savings for future needs. Is this a good idea? Are Swiss franks a stable, safe currency, or you would recommend something else? Which Swiss bank would you recommend? How are their terms and fees?
4) Investments in stocks, ~30% using a buy and hold strategy advocated in A Random Walk Down Wall Street. No details specified right now. Any advice on this?
.......why arent you investing more of this in the market? youre going to get crap returns in the banks.. buy bonds or something at least, HEARD MUNIS ARE GREAT
i keep 5-10k in my bank account for rent etc expenses and everything else i have invested in one way shape or form
i think u need a fin advisor lol
I wouldn't put a percentage on the money you want easily accessible. Have a liquid emergency fund of 6-8 months of living expenses.
For a young person it seems like you are putting way too much in savings. Are you worried about equities blowing up? If you have 40 years to retirement you should be more aggressive with your allocation to equities.
I wouldn't go for muni's until you are in the 35%+ tax bracket.
Put a large sum of money in Vanguard or something that gets back a high amount of interest. Then just use a credit card and pull out money at the end of the month to pay the bill/rent.
I get it, so less savings, more investing.
This is just a demo version, so definitely subject to a lot of tailoring. Btw, I am in my early 20s, and this will be my first job.
How about foreign currency savings? Which one do you recommend? Are Swiss franks a good choice for it? Also, which bank for this purpose?
Just out of curiosity, why the desire to go into foreign currency savings? Are you trying to hedge against the decline in the dollar?
Swiss 'franks' are fine but if youd be buying them now it would be at an all-time high.
I was in Geneva last weekend and you know how much a Big Mac trio - sorry, Combo costs? 14CHF (i didnt buy anything). And thats regular size, which is a small size for us North Americans. Add a 'menu XL' (which is really just normal size now) and thats an extra 3chiefs.
All this to say, the living standards in Switzerland are extremely high, but you pay for it.
Yes id keep some money in CHFs but not yet.
Look at gold and silver which is where im parking my money for the short to intermediate term.
I would say that 6-8 months of living expenses is on the high end. I'd shoot for 3-6 months.
Also, I think your swiss bank account seems a bit extreme. I would put the larger part of your savings into tax advantaged plans. Open a Roth IRA and max out the $5,000 contribution. If your company has a 401(k) plan, at least contribute enough to receive the match from your employer.
You get really high living standards (best in the core of EU, arguably better than Scandinavia as well) but it all comes at a price.
My friend makes $100,000 2 years out of college at a boutique (base!) but his monthly rent is 3000CHFs for a (nice, but) smallish loft. Rest is spent on ridiculously overpriced food as a mentioned. Decent dish at a restaurant is about $30 whereas its probably $15 here back home.
It all adds up.
Unless youre looking to hide away $1MM+ in a Swiss bank account, id keep it here and put it in some silver/gold or in the money market.
Red Baron,
Rather than looking at certain names of banks, shop around for the best rates. Big name doesn't always equal best rates.
With respects to the Swiss banks, don't invest in banks with US offices (i.e. CS or UBS). Also don't put all of your savings in 2 currency's if anything get a basket of them. It should be noted, most offshore bank accounts require a minimum of 250K (these countries being Panama, Liechtenstein, Channel Islands, etc.) and some others have 1M USD minimum required deposits (i.e. Swiss, Singapore). Lastly I would look into having more of your assets in stocks given your age. Mainly developed countries...Canada, Australia, US and Japan.
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