25yo, 100k NW, what now?

Hey all!
My first post in this community, I’d like to introduce myself :slight_smile:
I’m 25, I have been working for about 3.5 years after my studies in IT.
I have about 100k saved up due to my high savings rate (60-80%). I’ve recently gotten my last big raise at work for a while, and am thinking of other ways to maximize my portfolio.
This year has changed a lot for me, ever since hitting the 100k mark and dealing with the Corona situation.
I’ve opened an index fund account and plan on investing 500.- each month to get about a 2-3% interest out of it. Other than that I have 0 experience or knowledge in investing.
Since I don’t have one yet, I plan on opening a 3rd pillar acccount this year as well, which would reduce about 6k from my taxable income per year.
I’ve paid my AHV ever since my apprenticeship, which means I’m in a good place with my retirement plan.
I live very frugally and share a flat with my SO for about 700.- a month.
I wondered if any of you have any more tips on how I could improve my situation!

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First, welcome.
Second, do read the whole forum. It’s full of good info. Be aware that there is also bad info :smiley:

You need a goal btw…

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First, welcome and congrats on your achievements.

Not a master of life here but my main advice would be not to loose focus of the things that really matter in life: what makes you happy, your relationship with your SO / your family (assuming it’s a positive one), … our most scarce resource is time, not money. Make sure you’re happy with your life.

As for financial advice, you’ll find plenty of it on these boards so I’m supporting ma0’s advice of binge reading. I’m strongly supporting the goal advice too.

There are two things that really matter in my view:

  • Know thyself: explore your goals (what you want to do with your money), how subject you can be to either losses (think looking at your balance on the 20th of March 2020 after having put most of your savings in the stock market) or fear of missing out (FOMO) (think whatching stocks grow nowadays, would you be all in or have some cash on the side?). You need to know how likely you are to delve into unplanned market timing if either strong drops or ups happen, then, plan for that so that emotions won’t interfer with the execution of your plan when the time arise.

  • Get some exposure soon in order to get a feeling on how you react to having money in the stock market, get to know if you like your broker and investing style better.

More specific advice :

Evaluate what you want to do with your 3A : homeownership, self-employment, retirement. If you want any of those to happen soon, you may want to refrain putting this money on the stock market. Otherwise, you have a long investing time horizon so this is a good place to get familiar with the stock market. Choose either VIAC or Valuepension as your broker (search for topics on the forum), pick your investments (the main choices are “do you want to pick your own strategy or let your broker (or fund provider) do it ?” “what markets do you want to invest on (Switzerland, total world, US, other specific ones) ?”) and set that up.

Then you can go through the same process for your taxable assets (decide how much to invest, design a strategy, choose a broker, enact your strategy) with the added benefits of the increased knowledge you are getting by managing your 3A assets.

The most important part of reaching financial goals is the savings rate so you are already doing well. Make sure you enjoy your life, read a lot and if you have specific questions, never be afraid to ask.

Enjoy your stay!

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Sorry for the double post and the self quote, I wanted to make sure this would be read so felt like editing my post wasn’t the proper way to do it:

Note that my quote above is advice targeted on the short term situation of someone starting to invest on the stock market with some assets already piled up. Nobody knows what might happen in the future but, if it should for some reason go to zero, 3A assets are usually not life-critical assets in the short term and since they have offered a tax reduction, there is less money lost if they go to zero rather than if you had that money in a taxable account that went itself to zero.

The focus of my advice was to get a feeling of what investing in the stock market was like and, for that, almost freely manageable assets in a 3A account look good to me. Past the getting to know your basics phase, my sole advice is to reassess your situation based on your experience and design a plan that suits your own risk profile and hazard management. This include evaluating what 3A solution(s) is/are right for you, which might or might not be a VIAC or valuepension invested in stocks solution (disclosure: mine is not at the moment).

Hi @Wolverine , thank you for the extensive response!
I definitely am a newbie when it comes to investing. Since I don’t really think I will panic at the ups and downs of the market I’ll soon look into a bit of a more aggressive portfolio and see how that goes.
Regarding the 3a pillar I’d point towards homeownership - I don’t think I’m much of the “networking type” which to me is necessary to build a company or succeed in freelancing. Retirement is obviously also a goal - but I’m only at the start of my journey, so that’s nowhere in sight.
In any case thank you for the insight - it definitely is good input for me to further figure out where to go from here.

@ma0 I’ll definitely start binge reading ASAP!

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