3rd Pillar VIAC for small amounts

Investing / Others
1

Hi all,

I have:

  • 1 3rd in the bank for my mortgage 300.-/month
  • 1 3rd pillar insurance at 225/month (which is pledged for 10 years)

That’s 6300.-/year for my third pillar.

That leaves 526.- to arrive at the maximum sum of 6826.-

According to you, your experience:

  • I invest that 526.00 per year in VIAC? Is it worth it for such a small amount?
  • Do I invest elsewhere?

Thank you in advance for your advice

2

One could even argue costs per CHF are slightly lower if you invest less. Since if you open your account with a referral code you will never pay their ~0.5% management fee on the first 500 CHF invested. If you can do some referals yourself, that rises by max. 3 x 500 CHF to 2000 CHF.

The other costs scale linearly. Except for some things like getting out money for buying real estate (300 CHF I think). Look it up in their FAQ

Also, your own time spent on researching and managing this solution doesn’t get less if you invest less. But the big chunk of research has probably already happened and management is negligible.

On the other hand, the returns scale linearly and smoothly too, since you buy fractions of ETFs.

The question therefore boils down to:

  • Would I invest any money with VIAC?
  • Secondly, which of their strategies will I use?

That depends on:

  • Your investment horizon
  • Your marginal tax rate
  • Alternatives to VIAC (doesn’t have to be 3a, e.g IBKR)

tl;dr: The influence of investment size is negligible or even in your favor.

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4

To prevent you from getting flooded, I sent you one.

Make sure to check their competitors. Finpension is a possible alternative, if you plan to have no cash allocation.

If one doesn’t want to hold 100% stocks, the rest is often held as bonds. But interest rates might not fall again soon, which doesn’t do the bonds any good. That would make cash attractive. Especially if you pay no fees on any cash at VIAC (but you do at Finpension).

5

Hi,

You could open a portfolio with Viac (100% Global or something), and then spread out the 526/yr to 10 CHF per week.

That’ll provide some benefits from continuous rebalancing, volatility pumping, and more generally, the buy-low-sell-high effect if done for long enough.

See my experiments in this thread:

NB: The maximum you’ve quoted above was from 2019/2020. It has since been raised to 7’056 CHF.

1 Like