Are you an advanced investor?
Is this blog for you?
AskMargot is a blog about advanced investing. Why this choice?
I wanted to create a blog that was different.
I wanted to be able to cut to the chase and get straight to the point. Instead of spending a lot of time trying to convince people and justify my views, using the same content you find everywhere else.
In my opinion, there are only 4 criteria that define an advanced investor.
You know your goals, and where you stand
Do you understand all the implications of compound interest?
You take the right risks and stay in control
You always diversify whenever possible
If you meet at least 2 of the 4 criteria, you’ll get the most out of my articles and be able to read them on your own.
Otherwise, no problem: I recommend starting with more basic, educational blogs, such as Mustachian Post or The Poor Swiss for Switzerland, and Avenue des Investisseurs for France.
Take the quiz: Are you an advanced investor?
You know your goals, and where you stand
How much do you need to live happily?
You've stopped throwing random numbers in the air. You know the actual cost of your lifestyle depending on your circumstances:
your country of residence (Switzerland vs. France) and your housing status (homeowner vs. renter)
your family situation (single, in a relationship, with children)
your lifestyle (frugal vs. comfortable or even spendthrift)
Example for a childless couple living in Switzerland, renting, and enjoying a comfortable lifestyle: 160k per year.
How much independence do you want to have, for whom, and when?
Do you want to be 100% independent, or are you willing to accept certain limitations?
Do you have any future or current income other than capital (retirement, pension, inheritance)?
Are you seeking independence just for yourself, or to pass it on to your children?
Example: For the couple mentioned above, if you want to stop working entirely but your spouse continues to work part-time in a job they’re passionate about that brings in 60k- per year, the need for passive income drops to 100k- per year.
So, how many productive assets do you need?
It is your income-producing assets that must generate the passive income needed to cover the difference.
The 4% rule can be used as a guideline, even though the exact figure is a matter of debate.
For the couple in our example:
To finance the 100k- per year that allows him to be partially independent, he needs 2.5m- in income-generating assets
To finance the 160k- per year that allows him total independence, he needs 4m- in income-generating assets
More generally, for complete independence:
It takes between 2m- and 5m- for Swiss residents
It takes between 1m- and 3m- for French residents
How many do you have today?
You make a strict distinction between net worth and income-producing assets. Only the latter are considered when it comes to generating rent, dividends, or regular capital gains.
You systematically exclude the following from your independence calculation:
your primary and secondary residences.
your pension accounts as long as they are unavailable (e.g., 2nd and 3rd pillars).
your luxury assets (classic cars, works of art)
2. You understand the implications of compound interest
The exponential nature of returns
At first, your investment moves at a snail's pace. Then the snowball effect picks up speed.
At a 6% return:
| x2 | x3 | x4 | x5 | x6 |
|---|---|---|---|---|
| + 12 years | + 7 years | + 5 years | + 4 years | + 3 years |
It takes 12 years at the start to earn what you initial invested, but only 3 years at the end. Your money works faster and faster.
As a result, you invest as much as possible over the very long term, starting early and avoiding large withdrawals.
The best way to start investing early is to invest as soon as you have the money: so you’re a fan of regular investments—using the dollar-cost averaging (DCA) method—which you supplement whenever you receive a windfall.
The impact of fees
They, too, benefit from the snowball effect... but work against you! With a gross return of 6%, saving 1% in annual fees allows you to accumulate nearly 50% more capital after 40 years.
| Avoided costs | After 10 years | After 20 years | After 30 years | After 40 years |
|---|---|---|---|---|
| 1.0% per year | 10% | 21% | 33% | 46% |
| 0.5% per year | 5% | 10% | 15% | 21% |
| 0.2% per year | 2% | 4% | 6% | 8% |
So you cut out unnecessary expenses.
It’s the easiest way to boost your performance without taking any additional risks:
Avoid the -1%: you stay away from traditional wealth managers who charge you a 1% annual management fee
Avoid the -0.5%: you choose your accounts wisely. In Switzerland, the difference between an expensive 3rd pillar (or robo-advisor) and an inexpensive one is around 0.5%. The same is true in France for life insurance policies.
Avoid the -0.2%: you compare your ETFs. Two funds that track exactly the same index can vary by 0.2% depending on the provider or the fund's inception date.
Paying a 0.5% extra fee is unacceptable. Only when it reaches below 0.2% can you finally relax.
3. You take the right risks and stay in control
You have a good understanding of risk and its implications
There are no miracles: a much higher return always involves more risk and/or less liquidity.
You know how to say no: you turn down a tempting return if the risk becomes too high.
Examples:
Individual real estate club-funding bonds with a 10% return carry a risk of total loss
High debt can boost the return on a real estate project but make it riskier than the stock market
Private equity growth/buyout investments with (non-guaranteed) returns of 10–20%, but your money is tied up for more than 6 years
You mentally prepared yourself for a loss and adjusted your portfolio accordingly
For speculative assets (>10% net of inflation): you are mentally prepared to suffer a total loss.
As for the global stock market: are you ready to see your investments drop by 50% and wait 10 years for them to return to their peak—without panicking?
And there are only two ways to avoid panicking:
maybe you don't need that money
or you've structured your investment portfolio to include more stable assets as well.
You manage your emotions and control your actions
A concrete safety net: Keep six months' worth of expenses in cash to weather tough times without having to liquidate your investments at the worst possible moment.
Automation rather than action: you’ve learned (often through painful experience) that acting too much undermines your returns.
buying and selling at the worst possible times
or, on the contrary, waiting for the perfect moment to buy — at the lowest point…which never comes
The best way to control your emotions is to automate your investments and leave them alone.
You have a balanced life, which keeps you from getting too emotionally involved: you don’t absolutely need a particular investment to go up, nor are you looking for an adrenaline rush.
4. You always diversify whenever possible
You have financial humility
You know the science and the empirical data:
The market almost always wins: you know it’s virtually impossible to consistently beat the market over the long term. Nearly 90% of professional fund managers fail to do so, even over a 10-year period (source: SPIVA reports)
Overconfidence is costly: you know that overconfidence leads to more trades, which undermines performance. Even if you’re a man, you have the modest attitude of a woman when it comes to your investments!
"Diversification is the only free lunch": you know that diversification is the only “free lunch” in finance—and you like eating for free.
You diversify within each asset class
Regardless of the asset, you systematically avoid concentration risk. You prefer:
Global stock index ETFs to thematic ETFs and individual stocks
Bond ETFs to single-issuer bonds
Shares in a real estate investment trust (SCPI) to a single property investment that depends on a single tenant
A private equity fund to a direct investment in a single private company
You limit undiversified investments to a maximum of 20%. You know that stock picking, crypto, solo projects, or investments driven by passion should stay concentrated bets. These are a form of entertainment—one that could pay off, but comes with additional risk.
You diversify across different asset classes
Many brilliant people concentrate all their assets within their comfort zone because they have an illusion of control:
The entrepreneur: his specialty is creating successful businesses. After selling his company, he reinvests the entire proceeds into his next venture.
The American tech engineer: he lives and breathes tech. He swears by the NASDAQ, which makes up 90% of his portfolio. Everything is going well... until the tech market takes a nosedive.
The real estate pro: He avoids the stock market due to a lack of knowledge or a bad experience in the past. One businessman, for example, has amassed a fortune of 50 million, 100% of which is in Swiss real estate with 50% leverage… without even bothering to invest a few million in a global ETF to hedge the rest.
You invest in global stocks but also in more stable assets or those that are negatively correlated, such as bonds, gold, or real estate.
About the author
Hello, you can call me Margot.
I'm a French expatriate living in Switzerland. I've been investing for 15 years.
With assets in the low millions, I'll probably never have a family office, so I have to stay in the driving seat. How can I grow my assets further and pass them on to my children?
AskMargot is my testimonial, that of a peer, to go further in wealth management.
You'll find unique content, more advanced than what you'll find on beginner investment blogs or in the wealth reports of French or Swiss asset managers.
Don't hesitate to contact me if you'd like to discuss your wealth strategy with a peer.
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