financial journey

My Financial Journey: The Truth About What Happened

The Start Of My Financial Journey

My financial journey did not begin with a smooth ascent. But it was a sloppy mess through a landscape filled with bumps and potholes. Here’s how it unfolded: When I first started my career in Geneva, I threw money into the stock market. I followed the latest trends without a solid foundation of knowing what I was buying. This did not end well. This approach quickly led to financial losses. At that time, terms like index funds and ETFs were unfamiliar to me. Discouraged by my failures, I stepped back from investing in stocks and turned to a more conservative financial instrument: fixed deposits. The best option available then was the UNFCU shared certificate, which remains a reliable choice today.

What I Invest In Nowadays

Since those early days, my understanding of financial instruments has grown significantly. I can now confidently discuss the specifics of various ETFs, such as my favourites VT, VOO, VWRL, and IWDA, including where these funds are domiciled and the currencies in which they are denominated. I’ve also learned why ETFs domiciled in Ireland might be a better option for some investors compared to the typically cheaper U.S.-domiciled counterparts. This insight is important for making informed decisions, especially for those planning to manage their investments across different countries.

Spoiler alert: While Irish domiciled ETFs come with slightly higher fees, they sidestep the complexities of the US estate tax—a significant advantage for certain investors. If you’re residing in Switzerland, this point can be ignored since there is a tax treaty between US and Switzerland. So, it is better to buy US ETFs for those living in Switzerland, due to their lower costs. However, if you’re thinking of leaving Switzerland one day, particularly to a country lacking a tax treaty with the US, then Irish ETFs deserve serious consideration. Knowing this can safeguard your investments from unforeseen tax complications, ensuring that your financial strategy remains robust.

Why Do We Need To Invest

But I digress; let’s refocus on the beginnings of my financial journey. Our money is rapidly losing value due to inflation. It’s crucial that our investments grow significantly faster than inflation to preserve and enhance our financial worth. Failing to do so means all our years of hard work and savings might not suffice for a comfortable retirement. This realization spurred me to explore more proactive investment strategies, ensuring that my hard-earned money not only retains its value but grows to meet future needs.

Transformative Tips for Your Financial Journey

Financial Improvement #1 – Buy Index Funds

The first transformative book that seriously reshaped my approach to investing was Andrew Hallam’s Millionaire Teacher. Hallam began his investment journey at a young age and later moved to Singapore, where he worked as a teacher. Despite earning a modest teacher’s salary, his disciplined investments in index funds allowed his wealth to grow into several million dollars. This exemplifies the potent force of compounding—small, consistent investments growing exponentially over time.

my financial journey: millionaire teacher

Hallam retired in his late 40s and now travels the globe, occasionally speaking about his financial philosophy. His key lessons—invest as early as possible in global index funds and bonds, and tune out market noise—resonate deeply with anyone looking to build a secure financial future. His book not only underscores the importance of frugal living but also provides practical advice on smart investing, particularly focusing on low-cost index funds. Through personal anecdotes and a straightforward explanation of his nine rules for accumulating wealth, Hallam illustrates how understanding compound interest and avoiding common investment pitfalls are crucial.

The key takeaway from Millionaire Teacher is that building wealth does not necessarily require a high income; rather, it hinges on cultivating smart financial habits: invest early, spend less than you earn, and adhere to low-cost investments. Inspired by Hallam, I have been consistently directing my UN salary into index funds and ETFs for many years. This strategy, initially influenced by his insights, has significantly expanded my portfolio, often more than I realized was happening.

Financial Improvement #2 – Keep Investing

Following the insights of Andrew Hallam, I discovered Nick Maggiulli’s book Just Keep Buying, which echoes a philosophy akin to Hallam’s but with its own unique emphasis. Maggiulli advocates a steadfast approach to investing: continue purchasing ETFs irrespective of market conditions—hence the book’s title. His strategy is simple yet powerful: avoid trying to time the market. By investing a fixed amount regularly, you buy more shares when prices are low and fewer when prices are high, effectively averaging out the investment cost over time.

my financial journey: just keep on buying

Maggiulli supports his strategy with data-driven insights that challenge prevalent personal finance myths. He makes a compelling case for consistent investing, demonstrating how it can result in substantial financial growth, despite the market’s inevitable ups and downs. His book simplifies complex economic theories into practical, actionable advice, stressing the importance of regular investment as a pathway to significant wealth accumulation.

The key takeaway from Just Keep Buying is that making regular investments in the stock market, even in modest amounts, when combined with wise financial decisions, is vital for building long-term wealth. One of the most impactful lessons I learned from him was the idea of saving 50% of my salary. Following this strategy, he suggests, could potentially lead to retirement within just 17 years—an inspiring goal for anyone looking to achieve financial independence at an early age.

Financial Improvement #3 – Don’t Forget To Spend

The third person who have influenced me is Ramit Sethi and his book I Will Teach You To Be Rich. I had previously discussed Sethi’s impact in another blog post, focusing on his practical approach to personal finance. Sethi’s book meticulously outlines methods for saving money, automating finances, and making savvy investments. Sethi blends behavioral psychology with straightforward, actionable advice, empowering readers to manage debt and save efficiently for retirement.

My Financial journey: i will teach you to be rich

Before reading Sethi’s book, I was overly cautious with spending, driven by an unsustainable desire to retire early. This was partly due to the high stress of working under a toxic boss a stressful work environment 😉 This self-imposed austerity led to significant personal anxiety and detracted from my quality of life. Sethi’s concept of “guilt-free spending” was a revelation to me. He suggests allocating 20-35% of one’s salary to enjoy life’s pleasures without financial guilt. Although I have not yet reached this level, I have allocated up to 16% of my income to this. This shift has dramatically improved my mental state, reducing the pressure to save excessively.

Sethi’s philosophy is a reminder of the impermanence of life. We have to assess our lifestyle choices, emphasizing the importance of enjoying life while we have the health and vitality. After all, accumulating wealth for later years loses its value if we no longer have the energy to enjoy it.

The key takeaway from I Will Teach You To Be Rich is that effective money management hinges on automation, making informed spending decisions, and wise investing—all aimed at cultivating financial abundance without the burden of stress.

My Financial Journey Is Still Ongoing

In summary, my financial journey has taught me several invaluable lessons that have reshaped my approach to money management:

  1. Start Early and Invest Long-Term: Commit to investing in global index funds or ETFs as early as possible and maintain this habit for as long as feasible. The power of compounding over time means that the earlier you begin, the more significant your financial gains will be by the time you consider retirement.
  2. Save Substantially: Aim to invest at least 20% of your salary, though striving for 50% can accelerate your journey towards financial independence. This aggressive saving strategy ensures you are building a robust financial buffer that can withstand life’s unpredictabilities.
  3. Allocate for Enjoyment: It is equally important to allocate a portion of your income towards activities or items that bring you happiness. Remember, the essence of financial independence is not merely to accumulate wealth but to enhance your life’s quality. Spending responsibly on joys that matter to you can provide a balanced, fulfilling life.

These lessons are the cornerstone of a philosophy that promotes a healthy, sustainable financial lifestyle—one that supports your long-term goals while also celebrating the present moments.

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