updated: Feb. 14, 2017 @ 4:56a
posted: Feb. 13, 2017 @ 1:47p
See last year's thread here: https://www.fatwallet.com/forums/finance/1480084
Hello FWF, last year's thread got a lot of positive feedback, so I though I would share my year 2 update. I will try to follow the same format as last year. The biggest update that I have is that I am finally living in Switzerland! I moved in August of 2016. In February 2016, I had my annual review at the UK company. My VP told me that I was doing a great job, and he wanted to put me on a management track, but I turned it down, as that opportunity would have required me to remain in the UK and I would rather move to Switzerland. I ended up turning in a 3-month notice in June, however the following week, my landlord gave me a 2-month notice to vacate my apartment, so I moved up my resignation date. My boss wanted to retain me, and he went out of his way to offer me a remote, professional services consultant job on a contract. I was working as a PreSales engineer at the time, so this would have been moving down in my career. PreSales wasn't an option due to not speaking the local language. In the end, the money just wasn't enough, so I left the UK with no prospects at all. For the first time since I started working at 15, I was without work. I was in for a shock. In the UK, recruiters were contacting me almost on a weekly basis with job opportunities. Nobody was interested in me in Switzerland. I applied anywhere and everywhere. In November, I basically took the first job that came along. Important to note, I had absolutely no problems whatsoever with getting approved for a work visa this time!
2014 salary (last year in the US) - $106.5k, no bonus
2015 salary - £58k + £7k car allowance + £12k bonus
2016 salary until August - £60.5k + £7k car allowance + £12k bonus (slight raise)
2016 salary from November - 115k CHF + 6k CHF bonus (not positive on the amount) + health insurance for both myself and my girlfriend (even though we're not married or registered partners!) worth 10.5k CHF/year
All in all, my total income for 2016 was £47,935.54 + 20,044.60 CHF, which in dollars, using the IRS average conversion rate (keep in mind that the GBP nose-dived in 2016), that works out to $79,298.80. Not great, especially considering that I lived in two cities with extremely high cost of living. Such is life. On this amount, I paid £10965.65 ($14241.10) in taxes to the UK government, and 4,243.30 CHF ($4,139.80) to the Swiss government. I am required to file a tax return in Switzerland, and I may receive some sort of refund. It is also important to point out that Switzerland taxes residents on global wealth, I believe 0.5% of your worldwide assets. I will have more information on this in the next couple of weeks, after I file my taxes. At the current amounts, my effective tax rate in the UK was 22.88% and 21.17% in Switzerland, for an overall effective tax rate of 23.20% for 2016. Effective tax rate for 2015 was 28.6% and around 22.5% in 2014.
In the short term, from a career perspective, moving to Switzerland was a bad move. I didn't have any good career options, I just had to take the first job that came along. I am underpaid by probably 10-15k CHF per year. The company bought me the lowest spec laptop on the market, and the cheapest smartphone they could find. I am writing this from a bus. I had to leave my house this morning at 5:30 am to catch a bus, which took 4 hours to meet with a client. I left at 5:30 pm, and will arrive home after 10 pm. All because the company doesn't want to pay mileage for using my personal vehicle. The 4 hour bus trip + 30 minute tram ride each way could have been done in 2 hours with a car.
In the meantime, I am launching a consulting company with a business partner. My employment contract doesn't allow me to have a second job, so when they find out, they will almost certainly terminate my contract. To be honest, I don't really care. The job isn't great, and nobody else seems to be interested in hiring me for a full-time position. I probably need another year until my language skills don't hold me back. In the meantime, I need a paycheck, so I will try to keep both going for as long as I can.
In the UK, I was paying £1150 (1493.50) per month for a 1 bedroom apartment. In Switzerland, I am sharing a studio apartment with my gf. Our rent is 1280CHF ($1248.78) + some utilities. I have been giving my gf 700 CHF ($682.93) per month. Overall, housing cost is way down for both of us. At first my gf was hesitant about sharing such a small space, but eventually she got used to it. I absolutely love our little apartment. It's in a great location, she is able to walk to work, and i work from home. Gigabit internet is also a huge plus. It is also important to point out, that my gf was nice enough to not charge me any rent during the 3 months I was unemployed!
Overall housing spend for 2016 $11,576. This takes into consideration 3 months of no rent, plus my deposit refund from my UK apartment.
Housing prices in Switzerland are extremely high if we were to buy. A 3 bedroom apartment outside of the city would start at a minimum of 1MM CHF. With a 20% downpayment, the bank will give you a 10-year loan at 1-1.5%. It is also important to note that during these 10 years, you only pay off about 10% of the principal. After the 10 years, you have to refinance at the current rates, and pay off probably another 10% of the principal. In Switzerland, you never really own your own house, even if you have been living in it most of your life. Depending on how our careers work out, if we end up staying in Switzerland, we will probably be in a position to buy something in about 2 years.
I sold my RHD drive when I left the UK. I had a really tough time selling the car, in fact I sold it less than 24 hours before I left the country! I paid £2,200 pounds for my car in June 2015, and in August 2016 I sold it for just £800. During the 15 months of ownership, I drove 8,498 miles with the car. This compares with 39,282 miles of driving during my last year in the US. Luckily, I didn't have to put any money into repairs, just a single oil change + inspection. The emissions system was on its way out when I sold the car, and that would have been a rather expensive fix on a Diesel.
I did not own a car in Switzerland from August until January of this year. Even though we live in one of the best places on earth for public transportation, it's still not as efficient as a car is. Trains are also not cheap, especially with two people traveling. In January, I got the itch to buy a car. After owning crappy cars for the past 7 years, I decided to buy something nicer. After talking to my gf, we decided, that as a step forward in our relationship, we were going to buy the car together, since we would both be benefiting from it, almost equally. We started looking around, we wanted a 5-year old 3-series BMW, Audi A4 or C-class Mercedes, preferably all of them in station wagon form. We wanted to spend around $20k. We quickly realized that getting a car loan was not an option, at least not at a reasonable rate. We would have been paying 8% interest. I wanted to save my cash, since my job prospects for the rest of the year are questionable. Eventually we bought a 9-year old hot hatch for $5k cash. Even though it had 130k miles, it was 1-owner in mint condition, with separate summer and winter wheels. It should do over 150 mph on the Autobahn, I'll find out in the Spring
Transportation costs for 2016
Gas - $1,396
Car Insurance - $1,401
Tolls - $247
Service/Parts/Registration - $229
Parking - $84
Public Transport - $1,149
Car insurance, registration and parking for the new car will be included in next year's post, as they were paid in 2017.
And here is how it compares with 2015:
Gas - $1,253 (this includes rental cars when I was traveling)
Car Insurance - $1,708
Tolls - $40
Service/Parts/Registration - $619
Parking - $346 (there is no such thing as free parking in Europe!)
Public Transport - $1701
Looks like overall transportation costs are a bit cheaper compared to 2015, although it definitely feels like we traveled more this year.
In 2014, I spent $4,301 on travel. This included one European trip (Spain and Switzerland) and several trips in the US.
In 2015, I spent $7,683 on travel, although some of this was pre-paying 2016 vacations.
In 2016, I spent $5,903 on travel. Some of the highlights from this year:
- Scotland road trip. Drove up all the way to the northern-most point in Scotland. Awesome driving roads, a lot of them just a single lane in both directions! You have to use pullover areas when there is oncoming traffic
- 2 days in Venice, followed by a 12-night mediterranean cruise (costs were counted for 2015 spend, as that's when it was paid for), followed by 4 days in Rome
- multiple day trips in the UK, such as Durdle Door, White Cliffs of Dover, etc
- 2000 mile European road trip in a RHD car. This was when I was moving my belongings to Switzerland. I got to drive Stelvio pass, visited Como, Italy, Genova, Italy, Monaco, Saint-Paul-de-Vence, France, Marseille, France, Bordeaux, France, Saint-Georges-d’Oleron, France, Grandcamp-Maisy, France
- 2 weeks in Vietnam + 2 days in Dubai - this was a solo trip. When the offer from the company finally came in, I had 3 weeks before the job started, so I immediately booked this trip. One of the best trips that I have ever taken
In 2014 I spent $2,957 on groceries and $2,211 on eating out.
In 2015 I spent $2,659 on groceries and $1,928 on eating out.
In 2016 I spent $2,855 on groceries and $1,671 on eating out.
Even though food prices are higher than in the US, we're able to keep our costs down by home cooking just about every meal, except when we are traveling. Now that we're living together, we roughly split food costs 50/50.
I got screwed on this one pretty badly. In Switzerland, everyone must purchase private health insurance. I was in Switzerland in May one weekend, where Monday was a UK holiday, but a regular workday in Switzerland. I decided to apply for a temporary residence in Switzerland. Even though I went to the UK until August, Switzerland backdated my mandatory health insurance coverage to May 1st! I spent months trying to argue with the government that I didn't need this coverage until August, they would not budge at all. This was very discouraging because I had to pay this amount right when I was out of work.Overall healthcare spending in 2016 was $5,469. This includes payments on my dental correction from the UK plus health insurance premiums in Switzerland.
In 2014, I spent $2,202.
In 2015, I spent $3,569.
In 2016, I spent $6,074. When I was in Vietnam, I had 3 top quality suits custom tailored. Also bought a new Macbook and a DSLR camera, that's why the huge jump.
In 2014, I spent $542.
In 2015, I spent $817.
In 2016, I spent $841.
Was it all worth it?
The big question. To be honest, last year this time I wasn't feeling too good, mostly because of the long-distance relationship with my gf. However, I had a good job that I absolutely loved. My outlook for the future was uncertain last year.This year, I am in a great mood, and feel great about the future! The distance between my gf and I is finally solved and we're living together. The job isn't the best, however I am really excited about the business that my partner and I are launching. So was it all worth it, this year the answer is a definite yes!