For many of us, it all begins with paying the bills: that’s the moment when you realize your money is not stretching as far as you’d like. Or maybe it’s covering expenses and you’re saving today but you fear you aren’t prepared for what tomorrow might bring.
You’re 27 and you want to travel, buy clothes and a car, and set aside money, but where do you begin, especially if you’re not sure if you want to return to South Africa or Canada, or wherever “home” used to be?
Or you’re 45 and your blood runs cold when you hear a financial advisor say that too many people in Switzerland foolishly leave their money in a troisième pilier (individual retirement) savings account that offers tax relief. That’s you!
Your best friend mentions that there’s no inheritance tax in Valais but there is in Vaud. Is this true and is it reason enough to decide to buy that second home in the Alps?
Your first step is to draw up a clear picture of your current situation.
Online tools, such as the one UBS offers, or the more UK-oriented one offered by Blackden Financial can be a good starting point, but before you pull out all your files take a few minutes to think ahead.
Age can be a factor. What you thought you wanted at age 30 is often very different from what you want at age 50. A second home sounds wonderful until you reach the point where you want a less stressful life and downsizing suddenly seems very attractive.
Sometimes your perception of what you want undergoes a serious shift. A senior manager in Geneva, a single woman, wants to change jobs now that she has a new boss, after thinking she would grow for another 5-10 years with her company.
She doesn’t want to change her lifestyle, so she may need to wait a while before making a move to give herself time to reallocate some of her assets and rebuild others.
Ask yourself the right questions
Key questions are: Where are you now, financially? Where do you want to be? When do you want to be there? The toughest question is, of course, how do you get there? You need to build in flexibility for all those “what if” parts of the equation, which often involve other currencies and other financial systems.
You need details about your income and taxes as well as your rent or mortgage(s), your pension plan, insurance schemes and investments, including savings.
You also need to understand how the Swiss and French systems differ from the one you’re most familiar with, information that most of us gather only as we need it, not when we first set foot on Swiss or French soil. Getting the bigger picture before you need it can help you avoid costly mistakes. Part One of this guide sketches out the main differences as a reference. In Part Two we’ll look at how you can make these work to your advantage and in Part Three we’ll talk to financial advisors and others to create typical case histories you can study for inspiration.