Increase Net Worth and Achieve FI

The Path to Financial Independence

What is it like to achieve financial independence (FI) in one of the most expensive countries in the world?

Today, I asked The Poor Swiss, an established personal finance blogger based in Switzerland, about his FI journey.

The Poor Swiss is, in fact, NOT poor and his successful blog receives over 50,000 in monthly pageviews.

He has surpassed $230,000 in net worth from $54,000 just two years ago. That’s a whopping 326% increase!

The Poor Swiss routinely documents his financial journey including his net worth status, savings rate, and investment portfolio on his blog.

Let’s get ready to learn about his secrets to financial success and how blogging helped him stay focused on his financial goals!

This post may contain affiliate links, which means I may receive a commission, at no extra cost to you, if you make a purchase through a link. Please see my full disclosure for further information.

How to Grow Your Net Worth

1) Hi Mr. TPS, thank you for joining this interview. Please tell us about yourself and your blog.

Hi! I am Mr. TPS (The Poor Swiss), a 31 years old Swiss guy living in Switzerland. I am a software engineer, and I blog over at The Poor Swiss. I started this blog about two years ago to document my journey towards better personal finances. And since then, I have written many articles about investing and frugality.

I am married, and my wife just joined me in Switzerland from China. We are planning to buy a house and have children in Switzerland.

The main reason for me to start a blog was simply to make public my effort. I was hoping this would make me more accountable! And it did! Now that my finances are open, I am much more motivated to make them better.

2) How did you increase your net worth by 326% to $230,000 within two years? What are the biggest driving factors behind this high growth rate?

I think two things contributed to our net worth growth rate these last two years.

First, I have done my best to grow my main career income. I think this is the best way to increase my net worth and my savings rate. I am trying to work hard and make myself valuable. Of course, the fact that I work in the IT industry helps a lot because salaries are currently very high!

Second, even though our income increased two-fold over the last two years, our expenses increased only by about 10%. And they only increased because we are now paying for two people. Therefore, we have managed to keep several of our expenses very low. Additionally, we have not fallen into the trap of lifestyle creep. In fact, the more income we got, the more we saved.

I think too many people focus on the expenses side of things. But reducing expenses is not unlimited. There is a point at which you cannot reduce expenses anymore. You still have to eat and live under a roof. And a lot of people are making themselves miserable and are not enjoying the journey to their financial goals.

Focusing on the income, on the other hand, can be extremely valuable (unless you start spending more, of course!). But many people are afraid to take risks with their careers. And many people think they do not deserve a raise and simply do not ask for one (at least this is the case in Switzerland)!

Increase Savings Rate

3) You are a big proponent of frugal living. When did you start following the concept of frugalism and how do you avoid lifestyle inflation?

I like frugality, but it did not come very naturally to me. When I got my first salary, my first instinct was to spend more! And I have not been very spendy in the past either. My frugality comes more from the fact that it helps me reach my goals! I see more value in getting financially independent than in getting a new TV!

And, we are still not that great at frugality! In 2019, we spent more than $5,000 a month! I think we should be able to reduce that significantly! So, we are not the best example of frugal people in Switzerland!

At the beginning of my career, I have seen what lifestyle inflation did to my savings rate. And I do not want this to happen again. A lot of high-income earners are not wealthy at all because they simply spend much more than they should. I think wealth is more important than income.

I see my income as a tool to achieve my goals. And my goals are to build wealth for the long-term. So if I get a raise, this works towards saving more money every year and not towards new things!

4) What is your current savings rate and what was it before you started your blog? What has changed in your spending habits in these past two years?

Once I started receiving a salary, during my Ph.D., my average savings rate started at about 22%. And I managed to keep it flat for a while. However, at the beginning of 2017, it started dropping significantly. I was spending more and more every month!

At this time, I did not realize this fact. I did not even know what was a savings rate! And then, I came across the notion by luck on a blog post. So, I calculated my savings. And this is where I realized that even though I was earning more money, I was savings less.

Then I started reading around some more resources. And I discovered the concept of financial independence which is really interesting. So, I set out on a journey to improve my savings rate as much as possible!

Currently, we just surpassed 50% of savings on average for the last 12 months. I am really happy about that. One of our goals for 2020 is to reach an average of 55%.

I am a big number geek, so savings rate improvement has become a kind of game for me. I always try to improve it. And the gamification of it helped me a lot!

As for what has changed, I am spending much less on meaningless things. Nowadays, I have a much better knowledge of what I am spending on.

Nevertheless, we are still spending too much. In 2019, we spent about $64,000. We would like to get that down to $60,000. We will see if we can reach that amount.

Additional Reading: “Affluenza: The All-Consuming Epidemic“

Investment & Teamwork

5) Your blog talks about investments and you also detailed your investment portfolio. What are your top three tips and lessons learned during your investment journey?

Here are three fundamental concepts of investing that I follow:

1. Passive Investing is the key! Passive investing means investing in index funds (passive funds) rather than in funds actively managed. These funds have much lower fees. And in the long-term, they also have much better returns!
2. Simplicity is important! If you invest in index funds, you already have a much simpler investing approach than stock picking. You will not have to worry about what to invest in. But keeping the number of index funds to a minimum is also a great thing!
3. Starting early is great! If you start investing early, your returns will compound over time for a great time. Many people do not invest early because they think that investing a little money does not help. But investing a few hundred dollars each month can help a lot in the long-term! And this helps build a habit!

These three concepts are representing quite well the lessons I learned. I have made many investing mistakes over the years. For instance, I started investing early, but I sold out being scared of negative returns. Now, my investing has become much simpler. And I do not worry about it.

Additional Reading: “The Intelligent Investor“

6) We see Mrs. TPS made some appearances in your blog from time to time. Can you tell us a little bit about your joint financial goals? How does Mrs. TPS feel about living frugally and achieving financial independence?

Our main joint goal is to be able to buy a house in Switzerland. Then, we are planning to start a family, and we want to be able to do that without impairing our budget.

Actually, Mrs. TPS, for the most part, is more frugal than me. So it has not been difficult to start being frugal in Switzerland. This is especially when we consider that everything here is about six times more expensive than in China, where she came from. A lot of Chinese people are quite frugal, and saving money is in their culture.

As for financial independence and my retiring early, she is not yet entirely convinced. But we have a lot of time before we could even think of retiring. So, we are taking it slowly!

The Advantages of Blogging

7) You started your blog two years ago in October 2017. What were your successes and failures? How much did you make from your blog in year 1 and year 2 (i.e. net income including revenues and expenses)?

I would say that my biggest success is simply to keep at it. Even when I had a very small audience, I was still writing between two and three posts a week. And then I tried many things to improve traffic. Some of them failed (Pinterest!) while some others picked up (SEO!).

I would say that my biggest failure was to post some articles without any value for the website as a whole. Now, I am trying to be more intentional. If it does not increase the value of my blog, I will not write it. And I have deleted some of my older articles that were not on the subject. Also, I know what my audience enjoys. I try to work on things that people enjoys the most. I do not want to work on small things that have no impact!

During the first year, I lost about $100 on the blog between hosting and some services that I tried. I did not make any money in the first year.

During the second year, I made a net profit of $292. This is already great for me. Even if it is nothing in the grand scheme of things, it is interesting to note that in the three months after the blog anniversary, I already made as much as the entire second year! So I must be doing something correct!

8) Do you think that blogging about your financial status online has helped you with better managing your personal finances? What inspired you to share your financial journey via your blog?

Yes, I think it helped a lot! At the very beginning, my blog was more of a journal for my personal finance. But publishing my numbers online made me accountable.

Having all these numbers open on the internet made me much more motivated to improve them. And starting to read many other blogs, I realized that I could do much more.

Only after a few months, I try to write articles other than my numbers. And then, I realized that I really liked blogging. And I am still enjoying it a lot!

9) Do you think blogging can be a viable side income venture? What are the taxes (and hidden costs) to consider for starting a blog in Switzerland?

I think it can be a good side hustle, yes. I think it can even be the main income for some people. Although I think this would be very difficult in Europe due to a more limited audience. But it should be possible as well.

If your blog makes money, you will declare it as a supplementary income. This will add to your taxable income. But if you make a lot of money, then you should start a company and pay yourself a salary. This should generate lower taxes which is the case here in Switzerland.

As for the costs, they are negligible in the beginning. You can host a blog for less than $50 per year without issue. Taxes are not going to be a problem in the beginning. And if you start a company for your blog, I think you can do it without paying too much taxes.

Final Remarks

10) To close this interview, what are your recommendations for those who want to achieve financial independence? And what are the tips for those who want to start a blog and grow it as big as yours?

To reach financial independence, I would advise starting early. The earlier you start to save money and invest it, the easier it gets. And it is really not as difficult as people think. Once you start tracking your expenses, you will realize that there are a lot of things that are not really necessary for your life! And once you have kept your expenses to a comfortable level, you can start working on your income.

As for starting a blog, I would advise to just start writing. Do not focus on the tiny things. Focus on writing good content that helps other people. This is what makes a blog good, not the color of your buttons!

As for growing, just keep at it. And if you do a good job, it will grow! But, do not think it will happen overnight. Building an audience takes time and a lot of effort. It is not a get-rich-quick scheme. You will have to work hard if you want to make a living out of it.

11) Is there anything else that you would like to add?

I would like to emphasize two things that many people ignore:

• While you may need a budget at the beginning, once you get into it, you will not need it. I have not been keeping a budget for a long time. But we are tracking every single expense that we do. And this is much more powerful than a budget!
• Do not forget to enjoy the journey if you are trying to reach a financial goal. There is no need to make yourself miserable for years to reach financial independence. If you enjoy the journey, it will be much better and it will probably be more profitable also. And financial independence will not solve all your problems!

And finally, thanks a lot to Mama Bear Finance for doing this with me! It was a great pleasure to do this interview! And thanks to you, MBF reader, for reading this!

Let’s Summarize

What an eye-opening experience to learn about Mr. TPS’ story on finances and how starting his blog helped him stay focused on achieving his financial goals.

In summary, there is no shortcut to financial success. In order to grow your net worth, you need to increase your savings rate and invest diligently over the years.

Based on Mr. TPS’ story, he did not only increase his income, he also did not spend it frivolously either. Instead, he kept his eyes on his goals and managed to save over 50% of his earnings in order to balloon his net worth from $54,000 to $230,000 in two years.

Often times, it’s easy to fall into the trap of lifestyle inflation when “everyone else” is doing it or “everyone else” is having more fun. But just remember, not everyone can achieve financial independence either.

So that begs the question: What’s more important to you? Is it to satisfy your instant gratification urges while the future can wait or is it to tighten the belt now to ensure a better future?

Please feel free to share your thoughts in the comment below. There’s no right or wrong answer!

And thank you, Mr. TPS, for joining us and sharing your secret to financial freedom.

If you want to learn more about personal finance subjects and follow Mr. TPS on his financial journey, then check out thepoorswiss.com.

To start your own blog with self-hosting option, you can check out Siteground (used by The Poor Swiss) or Bluehost (used by Mama Bear Finance). For a complete list of blogging tools, check out the Resource Page.

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