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What’s the best way to make money on your investments in Switzerland?

You must have noticed by now that your bank savings accrue very little interest these days — well below 1 percent. And rates are not likely to go up in the foreseeable future.

What's the best way to make money on your investments in Switzerland?
Where should you put your Swiss franc in 2020? Michele Limina/AFP

The Swiss National Bank (SNB) is keeping its key interest rate at minus 0.75 percent, charging banks that park their money there negative interest. The pressure is now increasing on the banks to pass this penalty interest on to their customers.

You may therefore be tempted to invest your money elsewhere, but be cautious. The promise of a potentially higher yield may actually backfire, according to the financial expert from the VZ Vermögenszentrum in Zurich

Consider these options carefully:

Shares

Shares are an attractive investment, Rolf Biland, head of investment at VZ Vermögenszentrum told the Bluewin.ch web portal. “Depending on the stock index, dividend income of around 1.5 to 3.5 percent is distributed before taxes,” he said.

However, keep in mind that there are risks involved: larger fluctuations in value can occur in the equity area, which can significantly — though temporarily — reduce the invested assets. “Therefore, in addition to the necessary risk capacity and risk tolerance, equity investors also need a multi-year investment plan,” Biland noted.

Gold

In terms of risk, investing in gold is similar to investing in stocks but, unlike stocks, “no long-term asset accumulation is to be expected”, Biland noted. And gold does not generate any returns, while savings interest rates could rise again.

However, “gold can make sense in a diversified portfolio as an addition to other investments”, he added.

Bitcoin

Bitcoin and other cryptocurrencies are hot-button topics, but they are “a highly speculative investment”, according to Biland. The price fluctuations are immense and there are no signs that this could change in the future. Bitcoins should therefore “not even be seen as an investment, let alone as an alternative to cash or bank balances”.

READ ALSO: Switzerland leads the way as Bitcoin makes a return 

Real estate

Real estate can generate a higher dividend yield than other investments. “However, there are also major risks on the real estate market, particularly in Switzerland, such as bubbles or liquidity risks”, Biland said. But, like gold, real estate could make sense as part of a diversified investment portfolio.

Art or vintage cars

If you are considering investing in art objects, watches, vintage cars, and such, think again, Biland said. The lack of a regulated market is particularly problematic and “a very high level of specialist knowledge is required to make a purchase decision. Such items should, in the best case, make up a small proportion of a large fortune”.

Conclusion:

You have to decide how much of a financial risk you are willing to take in order to grow your assets. If you are not totally risk-averse, then a diversified investment portfolio may be your cup of tea. Otherwise, stick to the traditional savings account, which will not yield you interest but at least your money will be safe — unless the bank goes bankrupt.

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Five things to consider when organising childcare in Switzerland

Switzerland's childcare costs are among the world's highest, although there are some ways to save. Originally from the United States but now raising children in Zug, writer Ashley Franzen takes you through some of the most important things you need to consider when finding childcare in Switzerland.

Five things to consider when organising childcare in Switzerland

Switzerland has a peculiar dichotomy when it comes to childcare. Although many parents both work full-time, Switzerland has traditionally been hands off when it comes to childcare support for families with children under five, leading to some of the highest childcare costs in the world. 

For older kids there is before and after-school care that is offered by the canton, but for younger kids who haven’t quite started kindergarten, it can pose problems for parents who are in need of reliable care, particularly those who don’t have grandparents to rely on. 

According to the Swiss Federal Council, “Grandparents as well as daycare centres and extra-school care facilities are the most frequently used forms of childcare, with each category accounting for a third of provision for children aged 0 to 12 years. 81 percent of families in large cities turned to extra-family care for their children compared with 66 percent of families in rural areas. Parents’ satisfaction with the care facilities is high, but there is still unmet demand.” 

What alternative childcare options do I have in Switzerland?

There are various childcare and nursery options for babies and toddlers up through young children aged five or six. Each canton offers childcare, though often there are lengthy waitlists for available spots.

READ ALSO: ‘A developing country’: Why do so few Swiss children attend childcare?

An alternative might be a private or bilingual daycare, but the costs for these are even higher than the locally-run childcares, and sometimes have longer waitlists.

Get on a list early as it’s important to get the ball rolling on paperwork, especially as a foreigner in Switzerland. 

An alternate option is to find the equivalent of a Tagesmütter, or a carer who opens up their home to taking care of up to four children at a time, when there is space available.

The costs remain about the same, but it can be easier to get placement for childcare with an in-their-own-home carer.

Some families opt to hire a nanny, but it may not be possible financially for all families. As for bringing an Au Pair to join the family, there are specific rules and regulations in Switzerland surrounding pay, number of hours they can work (about half of which you would need to be present for), and language rules– the main one being they cannot speak the same language as the family. Additionally, language classes are stipulated for the duration of their stay. 

Suffice it to say, that there are quite a few hurdles to overcome and in order to make sure your family is supported with reliable childcare to meet your needs.

Below are five things to consider as you plan out and organise childcare in Switzerland.

Children play with educational tools. (Photo by Thomas SAMSON / AFP)

1. Compare the options

Childcare in Switzerland is top notch, albeit expensive, so make sure you take the time to figure out where you want to enrol your child.

Some of the best programs are actually run as not-for-profit organisations, such as KiBiz in Zug.

READ ALSO: What alternative childcare options do I have in Zurich?

Most daycares offer a pedagogically strong curriculum and having them at a local daycare gives your child the opportunity to learn the local language. 

2. Decide on someone to name as your emergency contact

This can be a bit harder if you don’t have family or friends nearby, but double check with a colleague or someone that you trust in the case of an emergency or illness.

Finding a colleague that is willing to help by picking up the kids when they were sick when both parents find themselves out of town can be incredibly helpful. 

READ MORE: How much does it cost to raise a child in Switzerland?

3. See if you qualify for subsidies

According to the OECD, Switzerland has the highest cost for childcare among wealthy countries. Cantons are in the process of trying to increase the amount of money they’re able to allocate for assisting families with the costs.

If your household income is under a certain amount (it varies by canton), then it might be possible to have some of the costs of your family’s childcare covered. 

4. Consider having a babysitter or two on hand that you can call

As a foreign parent in Switzerland, sometimes it makes sense to have someone extra to call on for help with childcare coverage– even if you don’t think you’ll need anyone.

Meetings get moved, appointments need to be rescheduled, and sometimes there’s the odd school workday, where kids do not attend classes.

READ MORE: How to save money on childcare in Switzerland

In situations like these, having someone to reach out to, who can help provide coverage (and perhaps even the occasionally date night) helps provide a safety net for parents that might not have any backup to call at the spur of the moment. 

5. Be open for and prepared to have a hurdle or two, be it language or logistics

Many of the institutions around the country, particularly for younger kids are really good at filling in the parents on what the kids have done during the day, what they’ve eaten, how they’ve acted. The seemingly hardest part is actually filing the paperwork and piecing together care, particularly if you don’t speak the local language.

Wendy Noller is originally from Australia, and now lives in Luzern with her husband, and their two children, aged five and seven.

When they were getting signed up for Kita, she expresses that there were quite a few hurdles to consider.

READ ALSO: How different is raising kids in Switzerland compared to the United States?

Initially they received a letter from Canton Luzern stating that there weren’t enough places for their daughter. “We had heard negative reviews from other expats, but learned that there really are a lot of myths around childcare– that it’s not good quality, or there aren’t enough places. My husband and I work 100 percent and [when registering the kids], found the local authority to be both very helpful and responsive.”

She adds that she would call or email every couple days after receiving the letter to express that they both worked full-time and were really interested in their daughter integrating.

In the end, just a couple days before school started, they were told there was a place available for her. 

While their situation had a happy ending, sometimes other backup plans need to be put in place. Organising childcare in Switzerland is doable and having a fellow foreigner who has gone through it before to help share their experience or how to go about it can make a difference in how easy or how difficult it feels. 

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