We came in touch with FIRE about three months ago and are “on fire” for it ever since. We are 40, Swiss, married and have one little kid. Retrospectively, we have of course made some bad financial decisions, which seem now obvious … (especially we left out savings and investment opportunities). Thanks to the many helpful blog and forum posts, we have already made good progress regarding our saving rate (increase from historical 15% to budgeted 25% this year, although we reduced our % of work due to the child care for the junior).
Our approx. financials in kCHF
- Cash: 250
- Trading account (diversified with mutual funds and some stocks → reallocation pending in 1/3 Swiss passiv stock index etf and 2/3 world passiv stock index etf): 130
- Third pillar (all VIAC global 100): 190
- Second pillar: 450
Important decision - Long-term investment of the excess cash of kCHF 200 (safety cushion of kCHF 50 already deducted)
- Topic 1 - Potential real estate ownership (back-up)
- With a likelihood of 90% we will stay tenants. However, 10% chance remains that we will buy real estate for ourself 5-10 years from now
- Working assumption: We want to buy a house for kCHF 1’000 in five years and need hard equity for the mortgage of kCHF 200 (but don’t wand to liquidate any of our longterm investments)
- Based on my internet research it should be possible to pledge (verpfänden) my 3a account. Has anybody practical experience how this works? → Do you have to change the 3a accounts to the “bank” you get the mortgage? To what percentage the “bank” accept all-stock-3a as hard equity?
- Furthermore, does such a pledge also work with the “normal” trading account or is it limited to 3a?
- Topic 2 - Timing investment excess cash of kCHF 200
- For the future, we will invest the excess cash per month monthly
- I fully agree with the concept against market timing, but we are really emotionally struggling to go all in with the kCHF 200 with a big bang …
- Our provisional plan would be to go in with TCHF 50 and with kCHF 4 per month over the next 36 months (in addition to the excess cash per month)
- It would really help us, if you could share you personal view (if you were in our situation)
Thank you very much for your feedback?
ps. if I missed potential posts in the forum to these questions, please leave a link