Case study: Living in Sweden, what to do with $32000?

[Cloudberry]

Hello everybody!
I'm an Italian girl living in Sweden. I just became unemployed and as everyone here I want to get the best out of my money :)

Monthly income: total $1900
 $1200 (unemployment benefits that I will get from March 2015) + $100 from a website I manage + $600 that I get from renting out my apartment (on which I have a mortgage)

Monthly expenses: total  $1120
 $500 to rent a room in a shared apartment +  $120 public transport + 500 food an other things.

Cash:  $32700
 $16700 that I will have to pay by May 2015 to the Swedish tax office, it's taxes from an apartment I sold last year +  $16000 of savings.

Question: I was thinking to invest  $16000 in safe funds and keep the other 16700 in my saving account (1.4% per year interest rate), I really cannot lose the money I own to the tax office :D In May I could pay the taxes and than I would have  $16000 left. I would than invest about 10000 and keep the 6000 in the saving account, in case something happens! What do you think? What would you with the money?

Meanwhile, if I find a job soon I could afford to take a little more risk with my savings but it might be pretty hard for me to find something soon. I want to stay here in Stockholm but my Swedish is so bad so I'm considering other countries. Like Norway where the salaries are great! Let's see :)

[lemanfan]

Hi there!  Another swede here. 

While I'm usually the one to recommend investing and saving, I would put high speed into finding a job quickly.  That would improve your situation considerably. If you think you need the $10000 for living costs in the next couple of years do not invest them into stocks or funds - we're currently at an all time high in the stock market, so the risk of a temporary correction is not negligable.

If you have all your finances in Sweden so far, do consider performing any investments in funds or stocks in an ISK account (investeringssparkonto).  Avanza.se is my trading platform of choice and my routine investments goes into the Avanza Zero fund - a no fee index fund.

If considering working in Norway, check the tax situation thoroughly - both countries have high taxes and you don't wanna pay double.  Normally you would be paying in Norway if you're working more than 6 months there. (again, assuming that Italy wants no part of your taxes).  I'm also sure you're aware that not only are salaries higher in the west, the cost of living is also quite a bit higher.  Have you considered Denmark?  Simliar situation - higher salaries but also higher costs.

Re the monthly figures:

- I assume that the apartment is a BRF (bostadsrätt) - you probably have fees to the association in addition to the mortgage too?   The interest on the mortgage will also give you a tax credit each year.

- Your costs of living are impressingly low.  Kudos! 

What lines of work do you perform?  Do you actively try to learn Swedish? 

[Cloudberry]

Hej lemanfan :)

I will definitely look into the avanza trading platform, I didn't know about it!

I have a degree in biochemistry and I've been working as an engineer at the university. I would prefer to stay away from academia and work in a company but it doesn't seem to be the best time for biotech companies in the Nordic countries. A few ones, including the giant AstraZeneca have been shutting down their research facilities here in Sweden.
I'm considering any other job as well but since my Swedish is not that good it's going to be hard to be picked for jobs that are not in my field of competence.
Jobs in biotech seem to be pretty well paid in Norway, even though the cost of living is higher I would be able to get quite some money saved. I have the feeling that Nordic countries have a pretty salary/cost of living ratio, I wonder if there is any other European country where that is better.

I'm dedicating about 2 hours per day to studing Swedish, I am a level intermediate now and within 6 months I should really be fluent :)

Yes, I have a bostadrätt with a pretty high loan on it :D so I'm going to get around 12 000 sek back from skatteverket, the tax office, I didn't include them in the calculation though. The 600 dollars are just my earnings, I already removed from that the avgift (all monthly expenses),"ränta" from the mortgage and taxes I would need to pay.

And thanks for advices!

[lemanfan]

You seem to have a grip on things, to be honest.  I can really see why you like Stockholm, I did too when I lived there ten-fifteen years ago. I miss the bars, the resturants, the theatres, the live music... as I only live 2 hours away, I still visit from time to time.  But I usually avoid Stockholm in November.  Too cold, dark and damp.  Next trip in December :)

Since the thread started with investment themes, a few Sweden-specific pointers:

• Buying stocks or funds can be done in two ways in Sweden- "direct" or in an "ISK - Investeringssparkonto".  In most cases you want the later since is both much lower taxes and easier to to your self declaration of these taxes.
• Most major banks have both kinds of accounts, but with different fee structures.  The majors are Nordea, Swedbank, SEB, Handelsbanken and Danske Bank.  The two main alterantives to these are Avanza and Nordnet. Fees vary. My favourite is Avanza but do you own homework.
• If your going the investing way, stick to low-low-low fee broad index funds.  Our options are smaller than the americans, but there are some good ones out there.  The one I use is Avanza Zero which is actually a loss leader with a fee of 0%, the downside being that its based on the SIX30RX index which has only the biggest 30 companies in the Stockholm stock exchange in it (but still represent half the value of the exchange in question).

Given your situation, and the fact that the stock market is at an all time high here, I would put more energy into job hunting than investment thoughts at the moment.  Once you find steady income, start monthly savings in both bank accounts and in an ISK with index funds. 

For biochemistry, I guess that also the Malmö-Lund-Copenhagen area can be an option? Some biotech down there too, and if you manage to live in Sweden and work in Denmark, the financial gains may be good.