This just came into my mind, but I live in the north of the Canton AG, Germany is quite close I’d say. Almost the same distance as Zurich. What moving to Germany would do however is that I could retire at 1M (maybe a bit click-bait, but let’s just keep it there) without a loss in life quality. In fact, the German tax system heavily favors investors over income earners (you only pay 26.X% taxes at max and can get everything back up to your marginal tax rate until the fix percentage.
The cost of living in Germany is also insanely cheap - not comparable to other wealthy EU countries. Groceries are really cheap and there is a lot of tricks one can use to drag down ones COL.
And last but not least: An income of about 40KCHF (±38K EUR) isn’t as bad for a single in Germany. It will be more than enough to live a comfortable middle style lifestyle near the Swiss border.
I am quite far away from 1M but what are your thoughts? I know that one has to cover health insurance etc. in Germany, but I also know people there survive with less than 1K in income, so having tripple that is quite ok I’d say.
One could also use this trick to reduce the withdrawal rate in early retirement and move back once the portfolio doubled or something like that. The downsides are inheritance taxes in Germany and the different culture/language - although I speak almost accent free Hochdeutsch, since I always liked the German mentality more than the Swiss one
If your nest egg is large, this might not be worth it, because the taxes in Germany are higher than the ones in CH on investment income due to the taxation of capital gains.
No in terms of the raw% it’s worse, but you have to factor in all the factors. Not saying you’ll be on fat-Fire, but 1M in Switzerland is really lean while it is middle-class in Germany. I’d say below 3-5M Germany has an advantage. There are also even better options within the EU, but those are further away (so I’d lose my social sphere) and culturally very different from here.
Not against you personally, just a feedback on some recent posts.
Look, I know this forum is supposed to be about retire early, but I don’t buy it completely. And I don’t buy it especially when a young man says he is going to work for ten years and then retire, because he will have enough money to support his current life style and expenses. Especially if this retirement implies heavily cutting costs in comparison with an average person, let’s say.
So you think you know how your life is going to develop next 70 years? No you don’t. If you meet a girl you love and you want to marry and start family, what do you do? Tell her “Sorry, but family and children are not in my budget”? Or go looking for a job 15 years after you “retired”? Or will you be rejected at an earlier stage for being useless and poor?
I am 40+ and 20 years ago I would not be able to imagine my current life in my wildest dreams. I don’t earn enough to really consider an early retirement, but even if I would, not before my children are grown up. Then me and my wife could start working less, for example, and our investments should also grow enough that we don’t have to rely on our pension only when we actually retire, early or not.
I am for sure not sure If I want to have children, but even then, 3K€ in Germany would be more than sufficient as my part of our income contribution - well she’d have to work for her part at some point, if she want’s luxury .
I am a very frugal person and besides a trip maybe once a year, I don’t have expensive hobbies. That was already the case before I even knew what investing is so I don’t think this will change dramatically in the future and even if… There are a lot of habits I want to adapt someday, but most of them are really not that expensive.
And while I get your situation, mine is different. For me, retiring early at a similar to now lifestyle is more than fine. If it wasn’t the case, those ideas wouldn’t come up in the first place. If I look at my life and compare it to others (not on this Forum lol, I still have more than a lot of other people in Switzerland, all while saving the crap out of my paycheck. Maybe I am just used to live below the median idk, but to me the spending of most people is irrational - but ofc, everyone can do whatever he or she can handle.
Your whole paragraph is a bit off topic and also arrogant imho. Who knows if I am straight or gay, who knows if I’ll have or want children and who knows what will happen within 70 years - no one. And why would that be a problem? If you are stuck in a job, you face the exact same challenges - and I assumed that there won’t be a dime coming in money wise - which is absolutely unrealistic imho. Taking a chill 20% remote consulting job would be really easy and would bring in some pocket change.
It is not about your sexual life or choice of partner, it was just an example. My point is, you have a long life ahead (and I wish you one), so why do you think you already know everything about your future? And your future expenses.
I don’t but I don’t see why my future should consist of consuming more stuff I don’t need, so I don’t get the question tbh. I just made a case how one could take advantage of geographic arbitrage without losing a lot as a German speaker.
With that argument, investing is a bad idea in the first place… What If I die tomorrow? I am happy as for now and as long as that’s the case all is good for me. The only thing mildewing my happiness is that I have to work 8h a day. I could work 4 and be happy with that, but then I’d have to do that till 65… no thank you
4% withdrawing rate is based on I don’t remember what success rate (you still have money left) after 30 years. For 50+ years I would rather count on dividend yield only, which for MSCI World / ACWI is around 2%.
I don’t think that 2% is a realistic take, that’s like 99.999% success even in the worst case scenario. I am not invested in equities for 99% success, I’d say 90% is close enough for me. Combining this with the fact that I expect additional money streams and that failure risks are highest in the first 5 years or so after retirement.
Then chances are also high that I don’t even need those 3K€ a month as a single. But this isn’t a withdrawal rate debate - one can also perfectly survive with 2K€ as a single in Germany (especially with low consumtion habits)
I have to agree a bit with Dr. PI’s comment. And I think there may be some differences in the definition/interpretation of the terms “retirement” and “FIREing”.
The FIRE movement has brought many people some amazing aspects, techniques and opportunities to maximize flexibility, independence and freedom in life but life is long. Especially towards the end
We also should keep in mind that life values (which differ for each of us anyway) change significantly over time. Being born in 1960 is really not the same as being born in 2000. Expectations and goals change over time.
So ultimately, everyone can decide for themselves how they want to live their lives… But there must be fair boundaries set by society.
For my part, I believe that each individual must do his or her best serving the society. This means, for example, that someone who has the potential to become an engineer should become one (and not take an “easier” job away from someone else). This is my personal belief. Then of course the contribution to society can be very diverse!
This is a very interesting view on this that I haven’t heard before. Now what if someone is just not willing/fulfilled by doing work in general? I don’t really hate my job, but I also don’t like it the way I like f. e. watching a good movie or playing a good video game or spending time with my friends, etc… For me, not having to work is basically the last extrinsic goal I have to accomplish in life to fully deduct my time to solely intrinsic projects, which sadly don’t pay any money.
So for me all this materialistic stuff or super security is not really important - I just want to wake up without thinking of what stuff I need to do today, because someone else wants me to do that.
And I am a firm believer that for me, there is no job that can give me this. I can’t imagine a job where I get payed to just do my daily business, except for maybe doing YT or a Blog or whatever, but this comes with it’s own downsides as well.
Trust me - in your 20ies, its easy to life frugal. Early in your early 30ies and as your salary finally grows big times, its even easier to make exciting plans how your Wealth will grow and soon put you out of your workforce. Most people get a reality check later on - this maybe in their late 30ies; latest in their 40ies. This on the dimensions of:
Salary Progression may get stagnant; and Inflation reduces your real salary / savings rate
Life can become complicated and (with absolutely valid reason) distract your savings discipline
Cost of living may go up; whether you want it or not - and this, without even any “lifestyle inflation” but simply the cost you need to maintain your lifestyle in changed circumstances
My pitch is that it’s always good to be frugal, plan and invest. YET I would never make any hard bets that this will put you out of the market by X. Because if that didn’t work out, you might develop bitter feelings for all the sacrifices you accepted throughout the process.
Remote early retirement may be an option for you; but I would keep this in the back of your hand and not count on it. Maybe - the option will one day allow you to sweeten the deal up a bit. Be it that you can call it a day a few years later or that it grants you a better lifestyle. But don’t put all your cards on something that may not work out as life had different plans for you.
More on a practical side - if you dislike work. I would recommend to either change jobs (which can be a risky move) or that you simply swallow it. Don’t allow work to take too much time, energy and focus away. Work pays your bills and provides you with current life, options and future freedom. Don’t let it pull you down and don’t take it too serious if it was not a super exciting or challenging journey. Alternatively, you may as well change jobs - this with the only caveat that jobs can be like relationships. Clearly, there are partner / careers that are bad for you and you should part. But part of the learning of growing into a happy career / relationship is as well that you simply learn to be happy with yourself and that you accept and embrace what it all means; and don’t get over panicked over smaller things that in the larger scheme just don’t matter. Clearly, if you eventually reach that mood AND find the right partner (as I luckily did ) you will then be just in the best place there is. But life can still be good with a relationship / career that has its pros and cons; as long as the pros are meaningful to you and you can accept, and don‘t’ get distracted with, the cons.
Of course this was just an example for illustration. There are other ways… It is more about an attitude in life (you will judge the society and they will judge you… one way or another… if you like it or not). But finally one needs to feel OK too… Some go to church on Sunday and feel fine afterwards
This is now getting a bit philosophical; but my feel is that the „how can I be a good citicen“ mood has reduced a lot, maybe the last 20 years? To be frank; I am probably also in the camp that thinks less in that sense.
My feel is that both the social contract among generations was under Stress and that younger generations had less of a believe that society prevailed over a sensible period / remained even when they themselves were gone (thinking of global warming impacts). This in combination with the fact that we no longer face a situation where future generations for sure had a better life than current / past generations (aka its no longer „sacrifice now to make our kids‘ life better“) and a situation where economic factors allow for a more transactional / self focused life as there was enough wealth available… this combination can be toxic for society. When you think about this, it can be used as a potential explanation for many things we observe; starting from birth rates, to increasing level of social security consumers, increase in unequality and equity in wealth and pay, … to the FIRE movement.
Clearly, I am part of this myself. Yet, I think it was said to see the state of society. Hope we as a community will somewhen again develop a sense of belonging; even if it means that we first need to face tough times - as this seems to be a proofen way of nourishing such sentiment.
One of the problems I’m seeing with that is that the responsibilities/risks/rewards relationship has been skewed. With the rise of social medias, everybody moving around with a camera and a society resorting more easily to legal means, the positions that require decision making and responsibilities present more and more liabilities and not all have seen their corresponding benefits increase (yes, top executives have seen their compensation skyrocket but others haven’t).
At some point, the positions with higher responsibilities start to feel very unattractive and really don’t feel like they warrant the risks (should I go through the stress of a criminal instruction, pay a heavy fine or even go to jail for a decision I had to take but which issue relied mainly on luck (bad outcomes could have happened either way, it’s a matter of them materializing or not)?) Taking one’s proper place in society shouldn’t feel like a sacrifice, it should look like a fair deal with its tradeoffs. To me, it doesn’t feel like the direction we’re going toward.
I see a lot of valid points in this, but I don’t get why you tell me that, because inflation, changing life goals etc… All of those points have not that much to do with FIRE per se. Now sure, you’ll need to adjust your budgets in order to keep up with a rise in expectations - that’s obvious and clear. And stocks will more than compensate for those other downsides as proven historically and as wanted systemically.
All the other points are inside of your sphere of influence and you can consider them within your decision making. So acting like “boom” and now there are kids is not really helpful imho. Also I’d argue that even with a family it’s easier to FIRE than completely alone, because you have a lot of tax advantages and a second income, which can come quite handy. (provided both are good earners with the kids, if not, then well kinds will probably delay you by one decade or so)
Exact dates are obviously nonsense, because we can’t predict the future, you’re right on that one.
Health, menatl Health, Family / Partner that require attention or Care, kids that unexpectedly end up on your expense as something bad happened to your siblings, special bodily needs like your you may no longer be able to sleep on a Couch but require a decent mattrace… Economic effects that force you to move flats in a skyroketing Real Estate Market (my current flat would cost me 30% more than what I currently pay), … these are all outside of your control.
From a purely financial perspective, taking advantage of cost-of-living arbitrage is probably the single best way to reach FIRE and to enjoy life after FIRE.
Even a person with a low income by Swiss standards can achieve FIRE using cost-of-living arbitrage. I know a fair number people who worked in Switzerland but lived in more affordable locations (commuting in their case) and were able to reach early financial independence on very humble Swiss salaries. They now live very comfortably.
If you have a rich and fulfilling social life where you are, then that may be more valuable. In every other case, moving elsewhere for cost-of-living arbitrage is the better option, in my opinion.
P.s. This can also include moving within Switzerland for cheaper rents, taxes, health insurance, etc.