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The Swiss save a lot of money. Especially at home and in bank accounts. It is always available there. However, money does not increase much because banks are still stingy with savings interest. This leads to the question of how money can “work” better.
“In my bubble, I get the feeling that people want to do more with their money,” says financial planner and podcaster Fabio Marchesin (35) from Lenzburg AG. This sometimes applies to people for whom 15,000 francs in the account is too much. And even more so for people who need to have at least 100,000 francs in their account in order to sleep peacefully at night.
There are different strategies depending on age and available amount. Marchesin proposes a three-step explanation:
Step 1: Safety first
First, determine your personal emergency fund. This investment cannot be made.
Step 2: Identify upcoming expenses
Think about what major expenses will arise in the near future. For this, you need to have enough money aside. Don’t forget taxes!
Step 3: Choose age-appropriate investment option
You can work with the remaining money. Your own age matters for your investment options and risk strategy: “At 30, you can handle a stock market crash much better than you would shortly before retirement,” says Marchesin. That’s why you should divide your priorities.
3a: Filled up to 30 in stocks and ETFs
Around the age of 30, it is advisable to learn about stock investments in the form of passive ETFs (these are exchange-traded mutual funds) and invest your money there. The investment horizon lasts several decades. “The returns from stock investments are second to none and the risk of this investment horizon is very low,” says Marchesin. In addition, you already gain experience on the stock exchange for the day when the amounts from column 3a or the pension fund are paid. “Leaving this money in the account would be fatal; investments should be made with it,” says Marchesin.
3b: Buy your own home from the age of 40
By the age of 40, the dream of owning a home often comes true. This requires a larger amount of equity capital and available money is quickly depleted. For those who do not have this desire, stock investing is still a very good service.
3c: Consider precautions from age 50
Starting from age 50, voluntary purchases into the retirement fund become interesting. “The risk-free return on tax savings is too good to ignore.” However, it is important to pay attention to how high the retirement fund’s coverage rate is, what purchases will be made in the event of death before retirement, and when the final purchase should be made.
3d: Consider post-retirement cost traps
Paying your mortgage at age 60 can be a major problem. Post-retirement affordability is an often underestimated risk. “Partial repayment of the mortgage can be very helpful,” says Marchesin. If there is no risk, it is useful to check what needs to be renewed in the coming years. As long as you have income, the tax savings are higher than retirement income.
Bonds or ETFs?
Blick gets a second opinion. Andreas Lichtensteiger, managing director of Vermögens-Partner AG in Zurich, recommends a similar approach. If you’re in danger, you should ask yourself how much money you’ll need for living expenses or investments (like buying a property) in the next 10 years. “The funds required for this must be securely invested, for example in medium-term bonds, fixed-term deposits or Swiss franc bonds.”
Money with a longer investment horizon should be invested in stocks. “ETF or index funds are particularly recommended here.”
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
