I am deeply passionate about efficiency. And I love to apply this passion to money:
- For the first few years of running Trigami, my take-home salary was 2500 CHF per month, so I was forced to master the money-game very early on. From that, I saved 1000 CHF per month and paid back my 25’000 CHF of incorporation debt in less than two years. (Before Trigami, Alain and I actually paid ourselves on a “need to have” basis, about 1000 CHF per month, which was our Masters Degree in frugality.)
- Focus on the most expensive items first: usually rent and car.
- Car: When you factor in all the costs like parking, traffic tickets, depreciation, amortization, repairs, winter tires and so on, a car easily costs 500 CHF per month, often actually up to 1000 CHF per month. I don’t own a car (but occasionally use Mobility.ch car sharing), so my car costs are as low as they can be.
- Rent: For a long time, I lived in a very old apartment. The rent was about 50% lower than market-rates. Today I live in a housing cooperative (“Genossenschaft”) which is very popular in Switzerland. It’s a self-organized, member-based house ownership. That way I save 35% compared to regular rent, but only had to pay equity of 1000 CHF per room (which is similar to a 2–3 month deposit for regular apartments). That means I have the same benefits as home-ownership, without the downsides (everything from gardening to repairs is taken care of, no money is tied up, and no mortgage to take care of). It took us almost 2 years to find and get this apartment. It was well worth the effort! Most cooperatives have waiting lists, so all you need to do is to put yourself on as many waiting lists as possible, and stay in touch.
- Health insurance: This is a no-brainer. Simply move to the cheapest insurer and immediately save up to 2000 CHF per year. I have a yearly task to make sure I’m on track.
- Insurance: Be smart about what insurance you really need. After careful review, I cancelled most of my additional insurance policies I “inherited” from my parents. I cancelled my dental insurance and the additional health insurance. Current policies I own: Legal assistance insurance (via TCS), global health extension including free transport back to Switzerland and included travel cancellation insurance (via TCS), and we’re members of Rega Swiss Air-Recue and Swiss Paraplegic Centre (mostly to support these organizations, but also to have the benefits if necessary).
- Alcohol: In 2009 I stopped drinking alcohol 100%, and this alone probably saves me 50–100 CHF per month.
- Beverages: I mostly drink tap-water (sometimes I spice it up with a bit of apple and lemon juice) but this alone has made my life a lot simpler and cheaper.
- Second hand: Whenever possible, I buy stuff second-hand. Most of my furniture is from thrift shops (“Brockenstube”) and also for Trigami we bought most office furniture second-hand (there are gigantic stores selling stuff from bankrupt companies). In Basel there are dozens of thrift shops, and it’s unbelievable what great stuff you can find for almost no money. I even worked in several thrift shops for 6 months during my civil service and was selling on flea markets as a teenager. It’s a great business model and very similar to what we try to achieve at Exsila on a much larger scale.
- Groceries: We buy our groceries in Germany (in Aldi) and save at least 50% on that.
- Dentist: Sorry Swiss dentists, but I boycott you. I rather drive 10km to Germany and have not only much lower prices, but also much better service. Example: In Switzerland you usually get a second appointment to fix a problem they found during checkup. In Germany they just fix it in one go. That’s how I like it. Efficient and cost-effective!
- Doctors: Same with doctors. I drive 10km to Germany and — because I’m a self-paying private patient — am treated like a king and get access to professors and head doctors, while in Switzerland I pay much more, feel like a commodity, and mostly am serviced by young inexperienced assistants. No, thank you! Besides, I try to avoid doctors as much as I can anyways, by doing my daily 7 Minute workout.
- Transport: I use a combination of a 125cc Scooter (my main vehicle), an electric bicycle, and Mobility.ch car sharing. The best and most cost-effective combination for my needs.
- Taxes: My private limited liability company allows for some added benefits, because I can use pre-tax money for certain expenses, and have some flexibility with how much I pay myself in salary each year. If you already have such a vehicle, you should make use of it. Else, don’t bother.
I know, I am an the extreme side of things. My key point is: If you really want, you can be extremely efficient with money. If that’s too extreme for you, simply focus on your biggest 2–3 expenses (usually rent and car), and alone with that you can save up to 1500 CHF per month. Yes, it’s possible.
It’s not about austerity, it’s about efficiency. This frees up money to spend however you wish. I invest my additional cash through Value Investing, with the goal to build my own compounding machine. I also buy some fun stuff: I bought an Apple Watch and fell in love with it, even though for many years I didn’t wear any watches. I also bought a supply of 5-hour Energy shots, to increase my quality of life by boosting my energy level when needed.