Quick question, how much is the gross and net (after all expenses but before tax) income of the rental property ?
Thanks for the insight,
Otherwise nicely done. You got some freedom and you have the luxury to choose between different alternatives. In the end, that is all what FIRE (the good one) is about.
If you follow the Safe Withdrawal Rate concept, once you calculate your annual budget then your FI number is calculated for you.
For example I’m in my 40s and plan using 3% SWR. For 50k CHF /yr spend I would need 1.67M CHF
Gross rent is GBP 9600, Total agent fees are approximately GBP 1000, Building service charges another GBP800. So taxable income is probably about GBP 7800. in terms of maintenance it really varies. After a tenant leaves (hopefully not every year) I probably spend 500-1000 on cleaning, re-painting minor repairs etc. If the boiler breaks I’d would cost about 3-4k to replace.
I think if you allocated about GBP1500 for maintenance on average you probably wouldn’t be too far wrong. That said I don’t really assume anything. Just pay the bills when they come it.
So overall the property probably brings in about GBP6000-7000 after all expenses but excluding the mortgage. I am on a repayment mortgage and don’t owe very much which is definitely not what you would do to maximise returns. I pay GBP 300 per month for that and there are 7 years left till the mortgage is gone.
No tax to pay as it’s well below the UK’s income tax threshold but you do need to do a tax return each year.
With property the idea is generally that most of the gains come from house price rises. Because of this the text book move would be to use the capital+ additional interest only debt to buy several properties and hope for price rises.
I’m not doing this because I don’t want to spend more time being a landlord and I don’t want a risk of negative equity. I wouldn’t buy another apartment now but to due to the hassle and transaction costs of selling I’ll keep this one.
Thanks, I understand the maths. It’s the “calculate your annual budget” step that is the tricky part for me. Depending on the assumptions I make I get a range of about 1-2 million. Hence my uncertainty about whether I’m getting there or just getting started.
The uncertainty is what make most of us never to retire early.
The best will be to reduce uncertainty by tracking your budget for few years.
If it is really a goal, you will be able to cut some expenses to make the move.
Most of your asset are not very liquid so you may want to focus on the portfolio generating net dividends.
Otherwise keep going.
Time for a biannual (in the once every two year sense) update.
Preamble
Since the last update I have come to believe that RE isn’t my current goal at this point. Ideally. I would continue to work, as i do now, around 80% for as long as I’m employed or until I’ve had enough. Having said that 42 year old Rinch is still keen on giving 55 year old Rinch the option to retire if he wants. But 42 year old Rinch is also happy to keep working and 45 year old Rinch is probably going to have to accept that.
My contradictory risk mitigation goals
I see two key risks that I’m trying to mitigate as being 1) Involuntary unemployment. If I lose my job I am very reluctant to relocate my family so I would ideally like to save enough to avoid this scenario. I’ve got too much shit in my garage and my kids seem too happy to want to move to another country at this point. I’ve already mitigated this risk to some extent.
A loss of employment could result in either forced RE or alternative, maybe worse, employment. If this was the priority risk I would address it with the most extreme saving possible. reaching FI as soon as possible would be my goal. However…
The second risk is 2) Burnout. A second reason I might not have a job is because I reach a point where I can’t bear to go to work anymore. My strategy for mitigating this is working at 80%, topping up leave with unpaid leave and paying people to do stuff I could do myself to make life easier (cleaning, car maintenance, paying for tax return completion, fun holidays etc.)
As it stands, the first risk is decreasing I think I’m reasonably close to not having to worry about this anymore so the second risk is now my concern. As a result I’m prioritising stuff that makes life easy and fun and planning to stick it out for at least 10 years.
With that said here are my (family) numbers:
| CHF | |
|---|---|
| Primary residence equity | 317,323 |
| Rental property equity | 255,989 |
| Pillar 2 Pension funds (bonds) | 299,569 |
| Pillar 3 and other pension funds (equities) | 182,630 |
| Equities in post tax account | 193,489 |
| Cash | 47,097 |
| Crypto | 20,323 |
| TOTAL | 1,316,420 |
Since the last update around two years ago I’ve increased my networth a bit less than CHF 300k. Of the 300k, 84k was post tax equities, 60k was pillar 2s
An increase of around CHF 150k per year seems fine based on my current timelines. My guesstimates of networth needed for FI indicate that 2 million CHF should be enough and even at CHF 150k networth per year increases I should be there in about 5 years, as my investments snowball or share prices fall these timelines may accelerate or decelerate.
Investment policy
With everything going steady a problem could derail my plans is lifestyle inflation, every so often I find my self looking at bigger, expensive houses and need to ask myself if that is worth 10 years more work. In my fire spreadsheet I have “no property investment” written in big letters to remind me. Other than that I stick 3k per month in all world ETFs and will continue to do that. This is exactly the same as it was last time.
Is this “yours” or “your family’s”?
Funding independence for 1 vastly differs from that for 3-4.
Edit: Ah only now see the bold “(family)” above the table. 
Congrats on keeping up with these updates. It seems like a great way to stay consistent and take stock of where you are.
I like that you’ve dropped to 80%, it insprires me as I have the same age, residency, kids/family and comparable net worth.
Knowing your NW at a given age is crucial, knowing your NW yield too. But if I were you, given the risks you mentioned, I’d try to complement it with an analysis of what this NW generates in terms of cashflow. I recently dug into my own numbers from a cashflow perspective and it was a wake-up call.
It might be worth asking:
It made me realize that I should go beyond the 4% rule and prioritize cashflow, then I adjusted some investments.
You’re clearly on a strong path already, hope it can offer another angle.
Thanks for this. I haven’t thought much about cashflow up to now, only about net worth accumulation. I will run some more detailed scenarios.
In the meantime I’ve been assuming that post state retirement age, with the combination of UK state pensions, OASI pilllar 1, and personal pension annuities I should be fairly well covered. Just the state pensions should add up to CHF35-45k in todays money. That should be a good chunk of our expenses.
Chat GPT tells me that if I had a total of CHF1 million (currently I have a bit under 500k) in personal pensions at age 60 this would by an annuity worth about CHF 50,000 per year.
I think current pensions should compound to around this by the time I reach 60. I think my aim would be to have sufficient pensions available to cover my expenses from 60 so that everything outside of pensions is availble for early retirement. I’m also assuming that monthly pension payouts are fairly tax efficient.
I do need to structure post tax investments so that I can draw an income from 50-60 if I need to. What is the best idea here? Property? Just sell investments? Other ideas? piles of cash?
I believe this risk is fully under your own control and thus mitigated. The human mind is able to adapt to almost anything and bear almost everything. It just needs to be aligned within itself.
You sound like a right badass.
I mainly agree. Burnout is largely under your control. Training yourself to be happy in somewhat difficult circumstances through mindfulness, meditation and other tools is possible and probably more of a sure bet than trying to change your circumstances. Not sure if that’s what you mean?
I’ve come to the conclusion that it’s easier to become content with one’s professional life, rather than upend it the search for a job that is fufilling without stress. No need to retrain and open a sourdough bakery.
Where I disagree is that, just being aware that you can change your mindset through training doesn’t necessarily allow you to succeed at this. The levels of people reporting stress, depression and burnout attest to the fact that many people are not able to manage their mental health.
Surveys suggest that two thirds of american workers report burnout: Job Burnout At 66% In 2025, New Study Shows
I think effective mitigation is a combination of having space and time for stuff that’s important to you (leisure, family etc) as well as various mental training to tolerate the pressures of living. I can completely accept that different people have very different mental tolerances though.
Good plan. I also have photos of my kids in my spreadsheet to remind me what I am doing this for.
You can liquidate 3a 5 years before retirement. Also options for paying back mortgages on your home (which indirectly generates an income stream).
Otherwise, you can sell investments, take a loan (or margin out your investment account).
I don’t agree with this. Everybody has a breaking point. There is a point when so much shit has been heaped on you that you will not be able to cope and will break.
I think it is mostly people that have never experienced it that think they are in full control (no shade, @dom.swiss). Life can fuck you even if you are above average prepared.
We should take anxiety and depression out of the equation. There are no biomarkers for burnout and it is highly subjective.
I agree on lack of resources to manage mental health. Just compare it with the amount of effort going into physical or financial health.
Agreed. Probably 100% of people are faced with traumatic events during their lives. Most people are resilient.
Many US Americans are not well adapted to reality. Teachers tell them they’re “so good” even with mediocre efforts, society tells them to go into debt, doctors tell them to overconsume medication, the president messes up their government jobs and remaining sanity, bosses tell them to return to office. AI is threatening to take some other jobs. Not surprising that they are confused.
With a solid job plan B and FI mindset, many of us are closer to reality and more resilient than most people.
On a second thought, we might want to start a mental health discussion. I remember several candid posters who mentioned their struggles and how they cope.