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Old 18.05.2017, 14:48
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My friend needs money advice

First post so please be gentle. My friend is about to turn 50 and is single. He has managed to save half a million which is just sitting in his ZKB bank account. He thought about buying a flat but feels it won't buy him anything in Zurich region. Even if he buys one it will clean him out.

He is a cleaner and his income is all over the place. His monthly income is directly proportional to the number of people who need their toilet cleaned. So not a very stable income source. He is also clueless about investing money. He almost ended signing up with "Beware Group" but a google search brought him to this forum and he did not go ahead.

ZKB keeps calling him and wanting to invest his money too. My friend worked very hard for his money so is confused about what to do.

What would you advice my friend to do? Thank you from my friend.
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Old 18.05.2017, 15:00
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Re: My friend needs money advice

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What would you advice my friend to do?
Hookers and booze.

Or a trophy wife!

Tom
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Old 18.05.2017, 15:11
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Re: My friend needs money advice

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Hookers and booze.

Or a trophy wife!

Tom
Or a trophy husband.
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Old 18.05.2017, 15:13
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Re: My friend needs money advice

Buy one or two, or even more flats... Rent them... maybe not in switzerland but in any place in the world where gets the best deal.

Invest in different stocks, also invest in different other stuff such as bonds, gold, etc

(Make it generate passive income)
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Old 18.05.2017, 15:27
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Re: My friend needs money advice

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Or a trophy husband.
Usually a challenge-trophy (Wanderpreis) - both types. You're sure?
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Old 18.05.2017, 15:36
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Re: My friend needs money advice

This means he has no Pillar 2 correct?
And not much in Pillar 3 either or is some of that bound in Pillar 3?
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Old 18.05.2017, 15:56
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Re: My friend needs money advice

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This means he has no Pillar 2 correct?
And not much in Pillar 3 either
Correct
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Old 18.05.2017, 16:30
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Re: My friend needs money advice

Saved half a mil from cleaning toilets? What the heck does he charge? Is he self-employed - in which case he should have been paying into social insurance at least.

"Social insurance

If you are self-employed you must take out your own insurance. The two main types of insurance are social insurance for yourself and any employees and business insurance. For more detailed information, see SECO’s SME portal."

https://www.ch.ch/en/becoming-self-employed/

He should also have been putting money into Pillar 3as over the years.

What permit does he have?
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Old 18.05.2017, 16:41
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Re: My friend needs money advice

I can provide the number for a secure, legitimate bank account, if he's interested.
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Old 18.05.2017, 16:42
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Re: My friend needs money advice

Oh yeah, 1st world problem btw .
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Old 18.05.2017, 16:52
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Re: My friend needs money advice

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First post so please be gentle. My friend is about to turn 50 and is single. He has managed to save half a million which is just sitting in his ZKB bank account.
He should treat himself to a good meal out in Zurich - followed by a coffee afterwards if he's got any money left.
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Old 18.05.2017, 17:08
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Re: My friend needs money advice

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Saved half a mil from cleaning toilets? What the heck does he charge?

He should also have been putting money into Pillar 3as over the years.
As a self employed he has no pillar 2. How old are you and how much do you have in Pillar 2 plus 3 combined ? at 50 half a million is nothing out of the ordinary.

But as a self employed he can put up to CHF 33 840 (but not more than 20% net income) into Pillar 3.
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Old 18.05.2017, 17:19
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He has Permit-C and he is self employed. Only thing he pays is his AHV contribution.

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at 50 half a million is nothing out of the ordinary.
I agree too.

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But as a self employed he can put up to CHF 33 840 (but not more than 20% net income) into Pillar 3.
What is the benefit of putting money into Pillar3? Does it get locked out until retirement?

Last edited by 3Wishes; 18.05.2017 at 21:06. Reason: merging consecutive replies
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Old 18.05.2017, 17:23
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Re: My friend needs money advice

Unless he has a high tax burden, which I doubt, pillar 2/3 makes no sense. Banksters would profit more from it that you

Buy some stocks or property. Move to a cheaper country if stuff is too expensive here. Half a million ain't much here to show for life's work but you could retire off that already in some countries. But not here, in Switzerland if you stay you're going to be doing toilets till you die
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Old 18.05.2017, 17:25
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Re: My friend needs money advice

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What is the benefit of putting money into Pillar3? Does it get locked out until retirement?
It is locked but taxed is lowered. Considering he has not invested the money in any other way this would be a good return compared to keeping it in a savings account.

But that still leaves you with 466160 to be invested in some better way.
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Old 18.05.2017, 17:28
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Re: My friend needs money advice

That half a million is what he has INSTEAD of what "regular" people have in 2+3 pillar.

7k (incl interests) per year into 3rd pillar for 25 years means 175k. (more since interest will not always have been as low as current)

2nd pillar should be equal at least.

Roughly the same

Being an independant Business owner means you get more choice. But he needs to make sure that when he goes on AHV he has other funds available.

Buying a flat and renting it can be a choice. But getting a single Mietnomade and he has trouble..

I would try to start 2nd pillar and 3rd pillar and move the money in there. Better late than never. Plus he wont be paying much taxes that way in the next years. Will take him till AHV to spend 500k on both pillars combined.

There are other, ummmm.. not so legal ways, which I would absolutely NOT suggest.
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Old 18.05.2017, 17:29
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Re: My friend needs money advice

Life was so simple as a kid.
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Old 18.05.2017, 17:59
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Re: My friend needs money advice

He can buy a two family home in New Jersey USA for around $310k usd, typical 2 family is really 2 full 3 bd room apt for rent at $1600 each, attic $800, basement $800 for a total gross monthly income of $4000 usd a month less

$48,000 gross income a year
less $10,000 property tax
less $4800 property management

Example here is a section of my income property list.
my-friend-needs-money-advice-capture.jpg
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Old 18.05.2017, 18:21
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Re: My friend needs money advice

Half a mill from 20 years of cleaning? Hm. Even if it appears little to some, apparently, I'd say this is really quite unusual.


It's not really spending money if he has neither pillar 2/3, though... If he has to essentially live off that money plus a little AHV after the age of let's say 60-65, it's not really much. In fact it's really quite little.


Either move the money to pillars 2/3 or buy a property.
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Old 18.05.2017, 18:38
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Re: My friend needs money advice

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Half a mill from 20 years of cleaning? Hm. Even if it appears little to some, apparently, I'd say this is really quite unusual.
It's only 25k Fr of savings per year of work. It's not much really
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