Sorry about the long post…
I read about FIRE in the newspapers someday, googled it and found out, that my SO and I somehow already pursue that lifestyle - but not because we wanted to become FIRE (we didn’t now about that concept), but because we had one big dream - our own proper house close to a bigger Swiss city.
We’re a married couple (mid-thirties) and started (properly, not zero at month-end) working after completing studies about 12-14 years ago. Since then, we never pushed our lifestyle after climbing the career ladder and were always a bit careful with spending money during these years as we dreamed of this house. The dream came true 4 years ago and we continued to live as we did before.
I was a silent reader of the blog (and other FIRE blogs) for a couple of months but now I have registered to this forum and would like to ask you for your opinion as we would like to successfully continue this somehow FIRE journey. But I need your opinion as our situation is individual due to a lot of our money being blocked with the equity of our primary home. Plus we do have no investments at all, everything else is in cash (side-story, I got burned in 2006-2008 where I lost 15k (out of my 30k savings) due to financial crisis and never invested anything again - some could think stupid, but in the end we had the money for our house). Here’s a quick summary of our current situation:
Total NW: 1.1 MCHF
Value primary home: 1.7 MCHF
Equity primary home: 690 KCHF (1/3 paid-off, no obligation to pay back)
Mortgage primary home: 1,05 MCHF @ 1,35% average
2nd pillar approx. 200K (not used for PH)
3rd pillars 2*30 KCHF (cash, used in 2016 as equity for PH)
Cash 150 KCHF
Approx. household income 260k before tax
And now to my question - instead of investing the cash or pay back the mortgage I thought of filling my gap I have in my 2nd pillar - which is approx. 150K - I thought of putting 3*50K into the 2nd pillar over the next three years - which would save us about 56 KCHF of taxes in total. Important to mention is, that my pension fund is quite nice as we get not only the usual 1-1,5% but an actual yield (was between 7 and 12% over the last years).
In the end that would mean - that 1 MIO CHF would be blocked in our primary home and the pension fund - which is not very helpful in achieving FIRE. What is your opinion on that?
I do not see any value in paying back the mortgage - and in case of need I would still be able to withdraw 3rd pillar again to reduce or to bond the 2nd pillar towards the bank. I also believe that markets are quite high atm - putting the money into pension funds bears no risk, at a minimum I always get 1%.
Many thanks for your opinion.