Clueless how to continue before retirement, and then on retirement

Investing / Others
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I pulled a lot from the market last year as I was kind of nervous, and clueless… so I opted to chill out a bit, figure out the strategy without a hurry

I have ~800k CHF idle, ~500 USD still in stocks. I’ll retire anywhere between next year and 10 years, as I actually don’t want to retire but might be forced to at some point, you know. With this outlook I don’t want to withdraw from the stock completely as I won’t need that portion of the wealth anytime soon so I can even wait 10-20 years if the market suddenly slides down.

The question is what to do with the idling cash. Well, I missed the gold rush, haha. I don’t feel very secure about holding my job till retirement, and then I’m really pessimistic about getting another job with similar benefits, so I’d rather pull the plug and FIRE. I decided to leave, perhaps to Spain/Portugal, or even outside of Europe, when I retire.

With the above, what would be a low-medium risk strategy to protect the money?

US stock market looks like going to crash year after year so I’m not sure if I should keep pushing for profit. I’m rather thinking of having a nice (but not overly large) pot available not to worry too much about where the world is heading on. I was thinking of property investment in Switzerland (that was also weighting on the decision to withdraw from stocks) but I gave up on the idea. I can start topping up 2nd pillar to lower my income tax, with 5 to max 10 years horizon to lump-sum withdrawal that may make sense (I need to actually do the calculation), but that would be only a small chunk. Perhaps I should move towards EUR and/or EUR denominated assets, or would you rather talk me over to move back a large chunk to VT or rather VEU (to tilt more away from US market)?

Cheers

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Do you have 500 or 500k USD invested? Do you really want to time the market? Why go for EUR exposure and investments? Do you have a family to take care of or is it simply a party of 1 to plan for? Do you want to work or FIRE? Have you reached the FIRE number already?

There are many uncertainties in your life. Maybe figure out what YOU want first and then the financial strategy can be built to follow your needs and wishes.

I would follow a simple strategy with MSCI world and maybe an emerging market ETF. Look up “antifragile asset allocation” or “crisis investing” and invest accordingly. Trickle your cash back into the market or buy a big chunk at once. As long as you have an income, you can “dollar” cost average your future investments without the need to time the market. Avoid pension fund buy-ins as long as you don’t have a plan, as this asset is rather illiquid and sometimes underperforming.

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Try professional help?

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Can you identify the problem in this statement?

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this. I’m struggling with this to be precise. 500k. FIRE horizon is also debatable. Retiring or early retiring in Switzerland is by far the most expensive, so I have already definitely made my mind not to pursue this goal. If by any chance I raised 5M+ then I might consider retiring in Switzerland, as what would I do with the money anyway. I’m single so the goal is to by large consume the wealth before I kick the bucket.

OK, maybe let’s start with who I am and what’s are my goals. I got used to living frugally because I had to for nearly half of my life, not the other way around like learning about this later from this forum. I’m a software developer, but I didn’t choose this career for money, so I was more focused on getting the most out of my life rather than sprint on a career treadmill. Well, actually it had to do more with risk aversion than anything. In my 30ties I was happy that my life was steady and easy middle class, I didn’t have anyone around to explain me that I can easily achieve the same in more developed country and that would have a big impact on my future. It just happened by accident that I landed job at FAANG in Switzerland, reaching ~300k total comp, as I got unemployed and hit a lucky jack pot. This is building the wealth quickly, but it’s like dreaming, a high risk asset if I was to make a bet on that income for longer term.

At 40ties I started thinking about where my life trajectory was heading to, whether starting a family was the goal and if it still made sense. I decided that realistically it’s too late and that influenced my next decision to move around the world a bit, but not as a backpacker/traveler but to experience the everyday living in various places.

Back to my current affairs. I’m living quite comfortably on ~3k here in Switzerland. I’m quite sure I can setup an equally comfortable living for half or maybe even less somewhere else, Europe, South America, so why to take the high risk of postponing the end of my career, I’d rather keep it cool and enjoy what I achieved. I like my current job, more so the current income, but I don’t see myself again in a full-time stressful job (yeah, most of them were stressful) working for average salary. Therefore I like the idea that I can make FIRE by matching the retirement destiantion according to the wealth wealth when/if needed.

Well, that’s interesting thought, if I say that I need 1.5k chf/m for comfortable living, what kind of investment strategy would you recommend? How much to keep in a low risk liquid assets, how much to put on the market and for what horizon? I guess that ideal would be thinking in ~5 years periods. Have a solid pot to cover the next 5 years, invest a bit with the goal that I might need it in 5 years to cover the next 5 years, and so on…

sure, I did in the past, but it was as good as reading/talking on forums. I’m an engineer, I need to understand what to do, not an arbitrary advice to follow.

hmm, no, could you help me? I’m concerned with the US money printing machine, stock overvaluation, etc. Sure, I know what inflation is. Even if one day the bubble bursts, what matters most is the distribution of the wealth not the value of the wealth. Everything can get corrected (denominated), but that doesn’t change much. The real worrying signal is the global dynamics, where the US can screw up completely and loose it’s global position permanently.

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You have been touched by the crystal ball demon. There is a cure: mechanical investment.

Once you know that you don’t know nothing (nobody does) you can start to make real money or just be at ease with your investments, because you know in any moment exactly what to do. No more selling low and buying high, nobody in his right mind would define a strategy with that target. And the over 100 bias of our cavemen brains don’t matter any longer.

For me mechanical investment was the breakthrough. Before I made some, lost some, but since I use mechanical investment strategies that changed, I started to make real money. And could FIRE with 51 years of age 12 years ago.

You’ll get help in the mentioned thread.

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thanks

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What is your target? If retirement in 1-10 years and your money to finance that, you need to figure out risk appetite level, expensenand time horizon. Let us assume you have the stomach for a 60/40 portfolio, the. You could apply the Trinity study rules of thumb: If you are aiming for retirement to last 30 years, you can start w assuming 4% SWR. 40 years and above: 3-3.5%. If your asset allocation is more conservative (hold cash/gold) you will need a lower SWR. Then expense - income, adjust for taxes. This is the number you need per year. Divide by SWR. That is your number to hit. Never pull out of market. What you do now is a mistake. Its timing and not wise. Reinvest asap according to your target allocation. Invest every month. Read. Educate yourself

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You’re gold to this forum.

Sorry for the slight off topic, you seemed to prepare for worse times yourself, also thinking of cash… just piling up to time entering? You sold? Changed your mind?

(2025 => 2026 - your thoughts? - #33 by finalcountdown)

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I’ve read about this rule, but actually I haven’t run it through the numbers recently. Taking my minimum safe expenses into account, then doubling it for a good safety net, it looks like I’m already close to FIRE.

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Thanks☺️. Good catch, no, I did not sell, would never sell, but have a lot of new money coming in. My SWR is now at 1.9% and soon 1.7%. I hence may diversify further, incl keeping some cash, which I have kept <5pct and often <2 pct.

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You announced 15% cash, well great, lot of new money indeed. (considering the 10M mark you passed that’s ~1.5 to ~1.8M new money depending on where you are now with this 15% target).

(Also considering you live a luxurious still very “normal” life from what we read with simple finance and asset management -thus, simple life, in a very noble term- that’s an ocean of money and you just can’t be wrong).

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I’ve just realized that I missed something obvious, I can start building a dividend paying portfolio.

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I shifted (for a variety of reasons incl. related to my personal situation) a sizeable chunk to cash.

Not generating much just sitting there though so I am using it to write a bit more cash covered out of the money put options. This generates extra (tax free) income while enabling me to hold on to the cash to jump into buying any good equity opportunities if needed. If I am forced to take delivery in the OTM written puts, then I’ll have bought those stocks at a discount and either

  • Will enjoy the dividends off them (my main target is dividend paying stocks)
  • AND/OR write call options (more premium and a modest gain in stock price) to get back to cash
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