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  #61  
Old 29.08.2011, 00:40
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Re: The only way for anyone to retire now is to become a millionare

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*yawn*

70 000CHF income per year. Equals 4700CHF per month.
Rent: 1700
Food, travel and entertainment: 1000
Insurance and bills: 500
Incidentals (an item of clothing, a birthday present, a special night out): 500

Save: 1000CHF/month.

Start at age 30 (better to start at age 23 but unfortunately unrealistic).

1000CHF per month invested into ultra long term mutual funds gives a reliable 8.5% per year (this is on average over 20+ years, some years they'll go up, some years down). We'll take most measures of inflation to be around 2.5% on average over the lifetime. Net return is therefore around 6% annually.

After 30 years, at the age of 60, you'll end up with 1 000 000CHF

With wise, low risk investment thereafter (lower risk than prior to retirement of course) You can achieve 4% annual growth giving 40 000CHF annual income forever.

The biggest problem with all of this is "Social Security" the world's largest, most damaging, pyramid scheme.

Here's our plan - don't worry about saving for retirement. Just give a percentage of your wages to help the elderly now, and then other people will give a percentage of their wages when you get old! Easy. Don't consider that the population is static or shrinking, that people are living longer and wanting to work less....

This action of the government, telling people (for votes no less) that they will be looked after on retirement so they don't have to save or rely on their kids who can now just join a punk metal band and smoke weed (they always used to save or rely on their kids) has created this problem literally from thin air.
Good plan but
"You can achieve 4% annual growth giving 40 000CHF annual income forever."
So where can you get 4% today for a safe CHF investment?
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  #62  
Old 29.08.2011, 00:43
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Re: The only way for anyone to retire now is to become a millionare

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Good plan but
"You can achieve 4% annual growth giving 40 000CHF annual income forever."
So where can you get 4% today for a safe CHF investment?
Novartis..... But then again you have the price action to worry about. Price goes down youre locked in. wish there were some decent 3yr CHF bonds with a +3% yield these days.
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  #63  
Old 29.08.2011, 01:06
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Re: The only way for anyone to retire now is to become a millionare

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Good plan but
"You can achieve 4% annual growth giving 40 000CHF annual income forever."
So where can you get 4% today for a safe CHF investment?
Yikes. Why would you want a CHF investment? Surely you'd want a balanced, global portfolio, properly hedged against CHF movement? Anyway, this thread has sort of deteriorated from a pretty low starting point so I'll let you all get on with it.
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  #64  
Old 29.08.2011, 01:39
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Re: The only way for anyone to retire now is to become a millionare

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Yikes. Why would you want a CHF investment? Surely you'd want a balanced, global portfolio, properly hedged against CHF movement? Anyway, this thread has sort of deteriorated from a pretty low starting point so I'll let you all get on with it.
maybe if you live and plan to retire in CH?
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  #65  
Old 29.08.2011, 01:46
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Re: The only way for anyone to retire now is to become a millionare

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maybe if you live and plan to retire in CH?
Nah. Even then I'd rather have a thoughtful portfolio of what seems to work best, with one eye on currency flux, than be nailed into a CHF coffin no matter what.
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  #66  
Old 29.08.2011, 21:05
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Re: The only way for anyone to retire now is to become a millionare

What scares me more about CH coffin, is the fact you don't even really have much time to decompose there...

I wish my grandparents' and great granparents' graves weren't taken by floods, but it is nice to have a place to pay tribute to your family, despite the fact they died 50yrs ago. The short renting time here is weird.

I think people should retire where they have their hearts, where their cash goes long and where there is much fun. Not solitude.
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  #67  
Old 29.08.2011, 21:34
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Re: The only way for anyone to retire now is to become a millionare

Well we did just that - but who would have guessed that the £/Chuff exchange rate would do THAT!?!

MC, as usual it is all about location, location, location. My parents are just over the road in a very spacious place where they will remain for a good Century or more. Not important to me though - the memories are in my heart, not in the ground.
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  #68  
Old 30.08.2011, 17:31
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Re: The only way for anyone to retire now is to become a millionare

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The biggest problem with all of this is "Social Security" the world's largest, most damaging, pyramid scheme.

Here's our plan - don't worry about saving for retirement. Just give a percentage of your wages to help the elderly now, and then other people will give a percentage of their wages when you get old! Easy. Don't consider that the population is static or shrinking, that people are living longer and wanting to work less.....
Exactly my thought! Social Security is the only legal pyramid scheme. Bernie Madoff was an amateur compared to the professionals in Social Security
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  #69  
Old 30.08.2011, 17:38
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Re: The only way for anyone to retire now is to become a millionare

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Exactly my thought! Social Security is the only legal pyramid scheme. Bernie Madoff was an amateur compared to the professionals in Social Security
No No.... The reserve banking system is also a legal ponzi scheme....
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  #70  
Old 30.08.2011, 17:46
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Re: The only way for anyone to retire now is to become a millionare

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US friend of mine said he's just going to live life to the full and then shoot himself at 55.
Make sure he tops himself it on a Tuesday - after all, Tuesday is Soylent Green day.
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  #71  
Old 30.08.2011, 19:40
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Re: The only way for anyone to retire now is to become a millionare

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Good plan but
"You can achieve 4% annual growth giving 40 000CHF annual income forever."
So where can you get 4% today for a safe CHF investment?
Safe & guarantees cost money, investing in Equities will beat that over the long term.
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  #72  
Old 30.08.2011, 20:05
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Re: The only way for anyone to retire now is to become a millionare

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*yawn*

70 000CHF income per year. Equals 4700CHF per month.
Rent: 1700
Food, travel and entertainment: 1000
Insurance and bills: 500
Incidentals (an item of clothing, a birthday present, a special night out): 500

Save: 1000CHF/month.

Start at age 30 (better to start at age 23 but unfortunately unrealistic).

1000CHF per month invested into ultra long term mutual funds gives a reliable 8.5% per year (this is on average over 20+ years, some years they'll go up, some years down). We'll take most measures of inflation to be around 2.5% on average over the lifetime. Net return is therefore around 6% annually.

After 30 years, at the age of 60, you'll end up with 1 000 000CHF

With wise, low risk investment thereafter (lower risk than prior to retirement of course) You can achieve 4% annual growth giving 40 000CHF annual income forever.
You will not get a return of 8.5% in the future, that is for sure.
You did not get a 8.5% return in Switzerland over the last 20 years; perhaps in the UK but that was basically inflation led.
The future is that investment percent return will be lower than inflation.

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The biggest problem with all of this is "Social Security" the world's largest, most damaging, pyramid scheme.

Here's our plan - don't worry about saving for retirement. Just give a percentage of your wages to help the elderly now, and then other people will give a percentage of their wages when you get old! Easy. Don't consider that the population is static or shrinking, that people are living longer and wanting to work less....
That is basically what the UK government is doing with National Insurance Contributions for pensions now; a kind of Ponzi scheme.
You seem to forget that people will be living longer and there will be less working due to robots/automation etc to pay for the older.

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This action of the government, telling people (for votes no less) that they will be looked after on retirement so they don't have to save or rely on their kids who can now just join a punk metal band and smoke weed (they always used to save or rely on their kids) has created this problem literally from thin air.
The problem in the UK is the government gave Benefits/Tax Credits too easily and it became sociably acceptable to receive them and actually became an "entitlement".
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  #73  
Old 30.08.2011, 20:09
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Re: The only way for anyone to retire now is to become a millionare

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Exactly my thought! Social Security is the only legal pyramid scheme. Bernie Madoff was an amateur compared to the professionals in Social Security
It's not a pyramid scheme at all, there has never been an investments in the first place.
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  #74  
Old 30.08.2011, 20:17
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Re: The only way for anyone to retire now is to become a millionare

Old age and pensions are a big concern BUT most people just appear to think that pension handouts will be there for them.

Let me make a few points based on the UK situation.

If I go back to when I was a teenager; most people were lucky to live until 70.
These people generally started work at 15 and finished at 65; therefore making 50 years of state pension contributions and only receiving 5 years of pensions; i.e. 5 years of pensions on 50 years of contributions (so say 10%).
Now people go to university (for a pointless degree - another story) and end up starting their working life at 22 years old. They finish at 65 and therefore make only 43 years of contributions BUT will live to 90 and therefore expect 25 years of state pensions; i.e. 25 years of pensions on 43 year of contributions (so 58%).

Some of you may have noticed that bank base rate is about 0.5% but inflation in real terms for basics (food, fuel and tickets to travel to work and heating bills) have increased by at least 12% in the last year (certainly in the UK) and wages have not gone up (lots have been made redundant, lost overtime or had hours and salaries cut).

The figures do not stack up and the West will go bust or we are going to have to change our expectations in the future.
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  #75  
Old 30.08.2011, 20:24
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Re: The only way for anyone to retire now is to become a millionare

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Old age and pensions are a big concern BUT most people just appear to think that pension handouts will be there for them.

Let me make a few points based on the UK situation.

If I go back to when I was a teenager; most people were lucky to live until 70.
These people generally started work at 15 and finished at 65; therefore making 50 years of state pension contributions and only receiving 5 years of pensions; i.e. 5 years of pensions on 50 years of contributions (so say 10%).
Now people go to university (for a pointless degree - another story) and end up starting their working life at 22 years old. They finish at 65 and therefore make only 43 years of contributions BUT will live to 90 and therefore expect 25 years of state pensions; i.e. 25 years of pensions on 43 year of contributions (so 58%).

Some of you may have noticed that bank base rate is about 0.5% but inflation in real terms for basics (food, fuel and tickets to travel to work and heating bills) have increased by at least 12% in the last year (certainly in the UK) and wages have not gone up (lots have been made redundant, lost overtime or had hours and salaries cut).

The figures do not stack up and the West will go bust or we are going to have to change our expectations in the future.
The UK reduced the period to 30 years for a full UK pension, I carried on paying after leaving the UK and are now fully paid up!

If people get made redundant, they will get used to having less money to blow, sobering thought.
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  #76  
Old 31.08.2011, 10:59
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Re: The only way for anyone to retire now is to become a millionare

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It's not a pyramid scheme at all, there has never been an investments in the first place.
Sorry but having my money tied up to be received back when I retire is a form of investment... I am sure I could very well invest that money elsewhere and get a better payback
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  #77  
Old 31.08.2011, 11:04
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Re: The only way for anyone to retire now is to become a millionare

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Sorry but having my money tied up to be received back when I retire is a form of investment... I am sure I could very well invest that money elsewhere and get a better payback
You know.... your SS payments aren't sitting in an account somewhere waiting for you to retire....
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  #78  
Old 31.08.2011, 11:09
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Re: The only way for anyone to retire now is to become a millionare

I've solved my retirement and pension scheme issues. For the past 5 years I've been sending all my neighbors Dignitas gift vouchers for Christmas. I figure that it's the least I could do to create a bit more space and increase the inherent value of my pension funds.
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Old 31.08.2011, 11:09
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Re: The only way for anyone to retire now is to become a millionare

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You know.... your SS payments aren't sitting in an account somewhere waiting for you to retire....
exactly... but they should be! this is a contract between me and the state where they promise to ensure I am able to retire and have money to live off given I have paid into SS since my first day on the job.

this is why its a pyramid scheme

anyway I agree that anyone expecting SS might as well work until they die if they don't have any savings.... from my part I gave up on SS when I started working and realized its all a scam and they're basically all broke.
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  #80  
Old 31.08.2011, 11:22
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Re: The only way for anyone to retire now is to become a millionare

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exactly... but they should be! this is a contract between me and the state where they promise to ensure I am able to retire and have money to live off given I have paid into SS since my first day on the job.

this is why its a pyramid scheme

anyway I agree that anyone expecting SS might as well work until they die if they don't have any savings.... from my part I gave up on SS when I started working and realized its all a scam and they're basically all broke.
You do understand the technical distinction between a Ponzi/pyramid scheme and a pay-as-you-go plan, yes? It does not sound like you do.
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