We’ve purchased a 2.3M CHF home as a married couple in our early 30s. We probably got carried away by the phenomenal view of Lake Lucerne, Mount Pilatus, and the thoughts of raising our kids at this beautiful place. A 50-year-old home with 3 floors, a spacious 1’000-square-meter garden, and a 270-degree unbeatable view of nature and endless sunsets. Tourists love the area and are willing to pay CHF 200 for a room or even CHF 800 for a house like ours a night during summer.
Now the reality settles in: we’re highly illiquid without any significant investments outside of the property. Let’s dive into the numbers:
Real Estate: CHF 2’250’000
Liquid Cash: CHF 50’000
Pillar 2: CHF 65’000
Pillar 3a: CHF 5’000 - global fund
ETFs: CHF 500 - VT in IBKR, yes, a freshly born account
Stocks: CHF 55’000 - employer stock program
(Hypothek: CHF 1’800’000 - below 1% and fixed until 2031)
Net Worth: CHF 625’000
Cash, pillars, and investments are at an all-time low. Plus, the change of Eigenmittel legislation in 2029 pressures us to move forward ~CHF 150’000 in renovations. Distributing them smartly between 2026-2028 will save us CHF 50’000 on tax deductions (~30%).
Our annual income is strong, however, stocks will continue to skew our portfolio:
Annual Household Income: CHF 366’000 - gross
Annual Employer Stocks: CHF 70’000 - options without any vesting constraints
Monthly Saving Rate: CHF 10’000 - without employer stocks
My wife has been half-joking for many years that we should retire at 40. Possible? No, if you ask me. Sometime in our 40s? Maybe! However, only if we rethink our portfolio and start to build wealth outside of the property and company stocks. Our situation feels like a valley right now and I believe that a sound financial plan, carefully executed in the next 10 (or more?) years could really change our future…
it also leaves out the opportunity costs of the 450k chf equity in the house not being invsted. Applying a theoretical longterm inflation adjusted global equity return of 6%, that would add an opportunity cost of around >2k CHF per month (27k per year). imo, this is the most neglected aspect of most house buying decisions.
Amortisation isn’t a cost as such. Yes it requires cash, but you are paying down debt, it isn’t quite the same as rent, which is entirely an expense item.
Depending how much you save now and thus put into the market, your situation can indeed look pretty rosy in 10-15 years.
But:
should retire at 40
raising our kids at this beautiful place
I don’t think this goes together. With such an expensive house, unless you have a really high income right now and build up significant other (more liquid) assets, I would not retire if I am still actively raising kids in such an expensive house.
I quickly read through your post and am puzzled. Maybe it was just me and I missed something, but with your annual income… how come you have such a relatively low amount in savings?
The good thing is you’ve locked in low mortgage expenses for a long time. I’d focus on rapidly expanding cash and equity portfolio (also useful in case something goes wrong career wise).
OP is doing well income wise (also for his age) and has taken a leap with a significant house purchase (by the way, I also have a wonderful view of Pilatus and Vierwaldstattersee so fully get where he’s coming from!) but my initial read was that with the income coming in, savings could/should be higher (i realize that’s subjective), at least going forward and even more so as a counterbalance to the relatively high portion of personal net worth being tied up in house and the risk related to the mortgage vs low savings (in case there’s a professional dip - e.g. restructuring).
Depends on your more complete numbers, ability to avoid lifestyle inflation, ability to keep a similar or better income while not endangering your mental health to the point the costs of it become too high, potential future expenses (kids?) ability to follow your investment plan and the goodness of the markets.
As a rough back of the envelope calculation assuming things stay the same and the markets behave, I’m more around 15 years to reach FIRE than 10, which would still be great.
It would help to have a better grasp on your expenses. Where are they now, where are they likely to be in 10 years? What is truly mandatory? What brings you joy? What doesn’t really bring you much or is even detrimental?
Another thing to assess would be where your taxes would be post FIRE.
As mentioned by @ZHCycle, it doesn’t seem to me that you are categorizing your expenses and savings correctly.
Amortization would be savings (not an expense). It reduces the debt, which reduces interests and would get you more available money if you happened to sell the house. For mental accounting and provided you don’t intend to sell the house in the future, you may apply a discount on that number to account for the fact that the actual financial benefits you derive from the house are pretty low (savings on rent vs all other costs to bake in).
I’m not sure if you account for future 2nd pillar contributions (deducted from your salary + from the employer side). They can be used to amortize the mortgage so could be participating to FIRE even if the retirement part happens fairly early.
Not sure you have to rethink your portfolio, rather, you have to decide what you want it to be and build it. At 10k/month of new liquid inputs, it should start looking the part quickly.
It could also give you more conviction and change how you tackle your present too. Having a plan is great!
I dont recall having seen a case of house poor as extreme as this. That is not as such a bad thing as long as you can keep your income. 15 years ago we prioritized a nice house as a frame for the family. We loved it. No regrets. Is it compatible with FIRE? Hell no!! Can you FIRE in your 40s like this?. Hell no!! It is a life Choice you make and that you can change when ready
what are your expenses? you make 440k, probably pay 90k taxes, so 350k net. You save 10/k month so can we conclude you spend 230k/yr? On what?
do you really save and invest 10k/mo or is it put into an account and then later used for house improvements, new cars etc? Lots of people confuse savings with deferred spending. What exactly was balance difference in your accounts 31/12/24-31/12/25? How much came from your own contributions/ savings? Thats what you actually save
I’ve never really understood this rule. If 80% of the value of the property is in the land I don’t see what relevance the property value is for maintenance. Mowing doesn’t take much time
I agree with a lot of the points made regarding „house poor“-ness. However you’ve fixed an excellent rate - not as long term as I would like to see given the level of leverage quite frankly, but still good.
For me, as someone who might be a bit more risk averse than a lot of the people here, I think the level of leverage might force you to be less aggressive with other assets. I worry about potential UNCLE points.
65k in pillar 2a: this seems very low given your level of income. I see potential here to save tax and build up assets uncorrelated with your property, that could in theory be put towards mortgage with the WEF clause. Heavily depends on the coverage ratio and assets of your pension funds - but I can’t imagine you don’t have significant buy in potential.
3a obviously needs to be maxed out: this could represent a bit of a compromise if you go 100% stocks here.
Focus should be building up as many assets apart from the house as possible. Indirect vs direct amortisation I don’t have a strong view.
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