The solution I apply here is a combination of balanced investing - AND booking my Portfolio as
Portfolio‘s „Coverage Capital“ equating to
„Investment + Interest“ Value
plus Weight Loss Reserve
Meaning that when I had put 10k to the Portfolio last year, I today report my wealth as the smaller of 10k plus X% interest since, and the actual Portfolio value. This way, I play my own pension fund that builds up loss reserves. If shares go down by 30%, my „Net Worth“ still stays roughly flat as I only lost not yet realized paper gains.
Clearly, such model works best after a longer Investment period and a few great Investment years. At the Moment, and considering net new investments are small compared to the Portfolio value, I can credit myself fairly decent interest rates
Yes, its a silly move but it helps me to sleep well at night. Particularely in combination with a balanced Portfolio.
Lets assume that my Portfolio was worth 2M, by the end of 2023. In 2024, I now invested another 50k and the Portfolio returned 10%. Hence, the Portfolio was now somewhere at 2.25M.
In my wealth tracker however, I only value the Portfolio at 2M plus 5% return and 50K additional invest. Meaning that my Portfolio now was „worth“ 2.15M.
Meaning that my „balance sheet“ was 2.25M, out of which 2.15M was my net worth and 0.1M was a Fluctuation Reserve (worth approx 4.5% of the Portfolio).
Now rinse and repeat this for a few years, until the fluctuation reserve was somewhere in the range of 30% times your shares percentage (18% for a 60/40 Portfolio). Tadaa, you are in a situation where you can grant yourself a steady return on your wealth (CPI plus e.g. 3%)… and this no matter what Stock markets did. If there was a crash, the fluctuation reserve shrinks but chances that it falls below zero (aka your wealth reduces) was very low. And if that happens, you just rebuild the fluctuation reserve in the next rebound.
Its all mental accounting but it helps me sleep well at night.
Exactly. I upfront at the beginning of the year grant myself an interest rate of CPI + 2% times Share Percentage or so - and then at the end of the year I grant myself ~ 1/3 of the excess reserves (which are 30% times share percentage; 18%).
Hi everyone, end of last year I have started investment via my 3a. I would also like to keep track of my net worth, however I am not sure how I can know how much I have in the 1st and 2nd pillars. Indeed, without this I doubt my graph will be relevant. Many thanks in advance for your help!
For the second pillar, you should know if you pay yourself your taxes.
For the first pillar is kind of complex:
Read here: Retirement income in Switzerland
there should be also a link to the simulator.
For the second pillar, your pension fund should provide you yearly with a certificate with all the relevant data (how much you pay, how much your employer pays, your insurance coverage, your current retirement amount and a projection of how much you’d have at retirement age, usually with conservative assumptions). I’d contact them to ask for one if you don’t have one at the ready.
The first pillar doesn’t work on a capitalisation basis, that is, you don’t actually “have” a first pillar. You can, however, know how much you’ve contributed and try to assess how much you’d qualify for at retirement under current circumstances. In addition to the resources pointed to by ma0, you can ask for an extract of your situation to the AHV/AVS.
Many thanks, ma0 and Wolverine for clarifying that. I will see when I receive the certificate (I guess it will be around that period). For the 1st pillar, thank you I got confused and now is clear.
Another year, another chart!
I’m quite pleased with how last year turned out. We achieved a savings rate of 48% and benefited from market returns of +22%. All in all, our net worth grew by an impressive +136K, which feels particularly rewarding considering our ages (30 and 31) and the fact that neither of us works in IT or finance.
While I don’t expect the markets to be as generous in the coming years, I plan to stick to the strategy: consistently investing in VT each month as planned.
Looking ahead, I’ve been toying with the idea of taking a short break—something like 3 to 6 months—to travel and explore before life becomes more demanding with responsibilities like kids and work. This could serve as a mini-retirement, leveraging the savings we’ve built over the past year. Let’s see where this idea takes us!
A rather “boring” year financially and graphically. I’m currently repaying a personal loan for a real estate purchase abroad that I made in September 2023 (I’ll be done with it by July 2025). On the other hand, I managed to save over 13k on my 2023 taxes thanks to renovations on a real estate project. This project, which includes 3 apartments, will be ready for rental in June 2025.
This year, I’ll finally cross the one-million mark in assets and hope to start buying ETFs on a monthly basis. On top of that, I became a dad and launched an e-commerce side hustle to develop new skills and diversify my assets.
Summary of my 2025 goals:
Repay the personal loan (25k remaining).
Rent out the 3 new apartments (June 2025).
Rebalance my allocation by increasing my investments in the stock market (currently 71.3% in real estate and 16.1% in stocks).
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