Should You Contribute to Your Second Pillar in 2021?

In Investing, Financial Independence, Retirement, Switzerland

In Switzerland, you can make a voluntary contribution to your second pillar. These contributions come with some tax advantages since you can deduct that from your income. Therefore, you have a return equal to your marginal tax rate. And this return is almost instant.

However, the money is then blocked into the second pillar. And the returns on that blocked money have been very low in recent years. Finally, you can only withdraw the money from your second pillar if you retire, if you buy a house or if you start a company.

One question many people ask is whether they should contribute money to their second pillar or continue investing in stocks.

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Grow Your Income or Spend Less to Reach FI in 2021?

In Earn, Financial Independence, Save

When you are trying to reach Financial Independence (FI), the best way to reach FI faster is to increase your savings rate. Your savings rate is the amount of your net income that you can save.

For increasing your savings rate, you have two options. You can either spend less or grow your income. These two options will directly increase your savings rate. And as a result, they will speed up your road to Financial Independence and make you reach FI faster.

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Life in isolation: 9 Lessons we are learning during the Coronavirus crisis

In Financial Independence

The current crisis is not a good thing. However, it is not the end of the world. And it can teach us some things about being socially isolated. Let’s stay positive and try to learn from this unprecedented isolation.

During this crisis, we have been learning many things. Some of these things we were already doing, and we only realize their importance now. But for other things, we understand that we can improve some things in our life. That way, the next time we will have to deal with such a crisis, we will be more prepared.

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Does the 4 percent rule work in recent years?

In Financial Independence

Typically, when we do retirement simulations, we want to take as many years back as possible. For my previous Retirement simulations, this meant using about 150 years of data to do the simulation.

However, there is potentially an issue with that simulation. What if we are not in the same situation now anymore? What if the chances of success in recent years are significantly different from before?

I thought it would be an interesting analysis to focus on the last 50 years instead of taking the full 150 years of data. For instance, this would mean there would be no Great Depression in the analysis.

So, let’s see if the 4 percent rule would have worked in the last 50 years. And of course, we are going to test many more withdrawal rates!

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Our 2020 Goals – Path to Financial Independence

In Financial Independence

2019 is now well over! It means it is time to set ourselves new goals for 2020. I liked having yearly goals since we started. So, it is now time to set our 2020 Goals.

Earlier, we reviewed our 2019 Goals. We checked every goal to see what could be improved. Some of the goals were not perfect. But some of the goals were great. On some of the goals, we did not do enough to reach them.

Our 2019 goals were already much better than our 2018 goals. I am going to try to make our 2020 goals even better. Of course, I will not know how good they are until the end of the year. But I am confident this is the best set of goals yet.

So, we are going to build on that to make even better goals for 2020. Without further ado, let’s go over all the goals we set ourselves for 2020.

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How to Go Paperless in 2021? And why?

In Financial Independence, Save

Having lots of paper documents at home is a hassle. Who would not want to get rid of all this for a better solution?

I decided to become paperless with my administrative documents. It was a long work. But now that I am paperless, there are many advantages, and I would not want to go back. All my documents are available as electronic documents now. I have been able to throw away five big document binders!

I have used my phone as a scanner and uploaded all my documents to the cloud. Now my documents are accessible from anywhere. And they are safely stored in the cloud.

Find out how I became paperless for free in this post. And how you can do it too!

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2019 Goals Review – We are getting better at it!

In Financial Independence

Now that the year is over, it is time for our 2019 Goals Review! At the beginning of 2019, I have set myself several goals for the year. 2019 was the second year I did set goals for myself.

In 2018, my goals were too easy and not original. For 2019, I have tried to make them more ambitious and more interesting. I think I have succeeded in that matter. The goals were more ambitious. But several of my goals could be improved. And I think I can try to challenge myself a bit more next year.

Overall, I have met most of my goals for the year. You are going to see which goal I did, and I did not succeed in reaching it.

In this post, I am going to review how I did with each of my goals. And I am also going to discuss the goals themselves. I plan to improve them for my 2020 Goals.

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Does The 4% Rule work in a low-yield environment?

In Financial Independence

Many people are using bonds in their portfolio to make it less volatile. And many people are basing their retirement on the 4% rule. But bond yields have never been so low. So how does the 4% rule work when yields are lower?

I am going to try to answer this question in this post. I am going to simulate the chances of success with the 4% rule with different bond returns. The idea is to lower the historical interest rate to see what would have happened.

This is only a simulation of course. But given that the recent average bond returns are much lower than historical returns, it is interesting.

This is something that many people suggested. If you have bonds in your portfolio, this is an interesting question.

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All you need to know about The Third Pillar to retire in Switzerland

In Retirement, Financial Independence, Investing, Switzerland

In our Three Pillars of Retirement of Switzerland series, we already talked about the first and second pillar. We now have to cover the most important of the three pillars: The Third Pillar.

The third pillar is the only one that is not mandatory. Everybody is free to choose to invest in the third pillar or not. It is simpler than the second pillar. But there are many more choices than you can make. You can optimize a lot of things for your third pillar.

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How to set goals to improve your life

In Financial Independence

It is essential to set yourself goals. And it is even more important to set yourself some good goals. Indeed, not each goal is the same. Having good goals will make it easier and more motivating to reach them.

And the beginning of the year is the best time to start setting goals! But this time, you are going to reach them!

Since I have started to work on my personal finances, I have set myself some goals every year. It helped me a lot to increase the shape of my personal finances.

As I said, a goal can be good, but it can also be bad. Some of the goals I set in the past were not good. I realized this, and I have been improving my goals.

There are many things you can learn to make better goals for yourself. If you do not set goals at all, then it is the perfect time to get started.

In this article, I am going to go over what makes a good goal and how (and why) you should set goals for yourself.

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