New member; saving for property

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Hello there!

I discovered this forum about 2 years ago. Read a lot, learned a lot but never did the last step into activity. Neither in this forum or in investing. Probably because I wasn’t sure where and how I’d like to spend my future (starting own business, going abroad, I had many ideas).

I live with my girlfriend in the north-western part of Switzerland and didn’t hit my 30ies yet. In some way, I considered me always as a frugal person. But when I was younger I spend all my saved money on all kinds of gadgets (mainly technology and sports equipment). Over the years I realized that this is a stupid habit and I stopped all the nonsense spending. Now I am able to save about 45k CHF a year

In this forum, I read a lot about investing, how to open accounts at degrio or IB, etc. But I also understand, that the most discussed investing strategy in this forum is made for long term investment (of course this makes absolute sense since the main topic here is FIRE). For me, FIRE is at the moment 2nd place on my „financial to-do list“. Buying a house in the next 5-7 years is my number 1.

So, my biggest question is: How would you invest your savings if you had a horizon for about 5 years? Is leaving it on the bank the best option? What would you do with the 3a Pillar? I am currently at Viac on the Global 100 strategy and not sure if this is still the right strategy for the next 5-7 years. Currently, I think of starting a new Viac account with Global 100 and changing the actual account to a more defensive strategy.

PS:
Why am I so sure about buying a house? There are two main reasons. 1. I grew up on a farm in the countryside. I really would love to raise my kids in a similar way. I can not imagine raising kids in an apartment in the city.
2. I love doing things like repairing things like cars, bikes, etc on my own and also doing carpeting and welding work in my free time. So it is essential for me to have enough space for these hobbies.

PPS: I am not used to write much in English, working mostly in german and french. I hope you get the sense:)

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How much do you need for buying the house in 5 years? I would completely withdraw your pension fund, so take that into account (including everything what will be added within the next 5 years). How much would your girlfriend contribute?

Now you know how much you need to save to have enough to buy the house. Divide that amount by 5. This will go to your 3rd pillar and savings account (because the timeframe is just too short to invest it in stocks). So I would change your Global 100 strategy to 100% cash.

Everything on top of that I would invest in stocks in IB.

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If you keep a lot of money in a bank, at least choose the best bank(s). The small local banks are usually the best but they don’t exist everywhere.

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I would keep an emergency fund amounted 3-6 months of income or expenses on a liquid savings account (maybe your company provides a “Einlegerkasse” with better interest rates or so)
I would max out the 3rd pillar (VIAC) every year
and make extra mandatory 2nd pillar contributions during the first 2-4 years (as the money is blocked 3 years) to reduce your income tax. you can then use this money for the 20% deposit.
the rest could be invested on the market (ETFs)

if you plan to buy a farm, do not underestimate potential renovation works, thus have a comfy emergency fund
eventually buy a “cheap” property that needs renovation and renovate a chunk every year to reduce tax

if you are able to save already 45k per year (it is huge!), unless you want a luxury property, you are already on a pretty good track and in theory you wouldn’t even need to use your 3rd and 2nd pillars :slight_smile:

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Thanks a lot for all your answers!

For sure my girlfriend would also contribute her part. Her saving potential is about 25-30k per year (amazing saver, but lower income).

Indeed until now I didnt consider the 2nd pillar option. I always figured this becomes only interesting when you are older. I will inform me on this topic in the next few days.

We are also optimistic, that our goal is achievable. We have no need luxury.

When kids are here we like to reduce our Work pensum. Dont know yet exactly how much, but its possibly that our income is smaller than now when we go in the market for a credit. SoI like to have the possibility to make a higher downpayment than 20%, if needed because of the Tragbarkeit

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It is normally interesting only when you are above 50, because you can only take the capital at retirement. In your case (home ownership), you can take it all out before retirement (3 years after your last purchase) to buy or build your house/apartment.