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

Categories Retirement, 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

Categories 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.

I believe it is essential to optimize the investment of the third pillar as much as possible. Once you reach retirement, your second pillar should still be larger than your third pillar. But there is not a lot of things you can do with your second pillar.

In this post, you will find all the details you need to invest in a third pillar. And also, what you can do to optimize your use of this last pillar.

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How to set goals to improve your life

Categories Financial Independence, Retirement

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

Categories Retirement, Financial Independence, Investing, Switzerland

We have studied the first pillar in the previous post in the series. Now, it is time to see the second pillar. The second pillar is an occupational pension for people working in Switzerland.

The first pillar covers the basic needs of everybody. If you did not read the previous part, I would encourage you to do it before you read this article. The second pillar is here to cover a larger part of your salary than the first one. It is an occupational pension. If you never worked, you will never pay anything for this, and you will never receive anything from this. It is significantly more complicated than the first pillar.

In this post, I am going to give you all the important details as possible on the second pillar. I am also going to help you understand what you can do to improve it.

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

Categories Retirement, Financial Independence, Investing, Switzerland

The retirement system of Switzerland is a system with three pillars. Each pillar is paid differently and will cover different needs. The first pillar is the state pension.

If you are working in Switzerland, it is essential to know these three pillars. Even if you do not plan to retire in Switzerland, it is essential to understand how they work. It will help you plan your retirement.

In this post, I am going to talk in detail about the first pillar. This post should contain everything you need to know about the first pillar to be able to retire in Switzerland. I am also going to provide an overview of the three pillars system.

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How to Calculate your Financial Independence (FI) Ratio

Categories Financial Independence, Retirement

When you have a goal, it is always good to know your progress towards this goal. If you are trying to become Financially Independent, it will be essential for you to know how far away you are from your goal! For this, you will need to know your Financial Independence (FI) Ratio. This ratio will tell you how close or how far you are from reaching your goal.

If your goal is to become FI, you will have a certain amount of net worth that you will have to reach before you can become FI. This amount of net worth is your FI number. Once your net worth equals your FI Number, you are financially free. That is the main idea.

Your FI ratio will tell you exactly where you are on your path to Financial Independence. In this post, we are going to see precisely how to compute your net worth goal. And then, how to calculate your progress towards your goal. It will help you a lot to know if you need to adjust your strategy to reach your goal on time.

Stay tuned if you want to know when you are going to be financially free!

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Swiss Life Select will not help your financial life

Categories Investing, Retirement, Switzerland

I have already talked about the Swiss Life Select (SLS) company in the past. I paid for their services. And I consider it is one of my biggest budgeting mistakes. There are many reasons for that. Not only was paying for their services a mistake. But so was accepting some of the products they recommended. And I just thought a new thing that I find out about them. They screwed me over with bad insurance.

So I want to talk more about that. I do not want other people to make the same mistake as me. While this post is focused on SLS, it applies to most of all the financial advisors and insurance advisors you will be in contact with. They almost all have the same issues.

As a note, this only reflects my experience with Swiss Life Select. Maybe some other people had a better experience with them. And since you have a private advisor in the company, it is also possible that my bad experience is related to that.

So, let’s see what is wrong with that SLS offers you in this post! I hope that this does not come as too much of a rant. I made some bad choices by trusting these people, and I want people to avoid making the same mistake as me! Continue reading “Swiss Life Select will not help your financial life”

Switzerland is unfair to married couples

Categories Switzerland, Financial Independence, Retirement

Marriage is a great thing in which I believe. However, something that not many people know is that in Switzerland, you are better off financially if you are not married. There are several disadvantages to being married in Switzerland.

Do not take me wrong, I am not saying you should not get married! We got married last year and I do not regret it at all. Marriage is about love not about money! But I know that in the future, we would be better off financially if we did not marry. This is important to know the differences between married couples in Switzerland, especially if you plan to retire here.

So in this post, we are going to see what financial difference there are between a married couple and an unmarried couple. You will see that there are some substantial differences in taxes and retirement for married couples.

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Interview of Daniel Peter, CEO of VIAC

Categories Retirement, Switzerland

I had the chance of interviewing Daniel Peter, the CEO of VIAC. If you do not yet know what VIAC is, it is a Swiss company that is providing an excellent third pillar option. If you are not familiar with the third pillar, I wrote an entire post about the third pillar. It is the Swiss equivalent of an IRA but with less choice. It is tax-advantaged and should be used by everyone serious about retirement.

I have already talked about this company on this blog. Currently, VIAC is offering the best third pillar option in Switzerland. They have very low fees compared to the other Swiss options. It is very easy to open an account at VIAC as well.

Moreover, they were also the first company to offer a third pillar account with 97% of stocks. Before that, the best option has only 75% of stocks. This is really great because the investment time of the third pillar is very long. Therefore, we want a large allocation to stocks.

But, Daniel Peter will tell you all about VIAC much better me. So, without further ado, here are Daniel’s answers to my questions!

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Health Plan for 2019 – Retire Healthy And Early

Categories Retirement

Neither Mrs. The Poor Swiss nor me are in bad health. We are very lucky in that matter. However, being a computer scientist and not going out a lot is not a good long-term prospect for my health. These last few years, I have felt that my health decreased. I am not as much in shape as I was 10 years ago. And my back has been painful a few times recently.

Even though we do not have big problems, health is really important. These days, we focus too much on our finances. I want to retire early and I also want to retire healthy! For this, it is important to try to work on our health as we are working on our finances.

In this post, I am going to discuss the things we want to do in order to improve our health in 2019. Do not expect any fancy cure that will solve all health issues. There is no such thing. We focused on simple things for 2019 to ensure that we stay in good health.

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