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  #41  
Old 09.07.2021, 15:01
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Re: What would you do with CHF 2-3 millions ?

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or date her?

A good accountant is always useful to have around .
Ho hum that would certainly confuse my husband. Maybe the 2-3 million would placate him.
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  #42  
Old 09.07.2021, 15:23
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Re: What would you do with CHF 2-3 millions ?

I'll let you know on Saturday. Fingers crossed for Swisslotto (2.8m in the jackpot).
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  #43  
Old 09.07.2021, 15:35
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Re: What would you do with CHF 2-3 millions ?

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I would definitely try to find a way to use that money to make more money. I use to think of 2 to 3 million as being a LOT of money that can go quite far. But then I moved to Switzerland.
Generally, the rule is that you shouldn't draw down more than 3% or so if you want the funds to maintain their value over time. At 3M, and without tax thats 90K CHF - not tons even for a single person when you consider rent, tax, etc. etc.
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  #44  
Old 09.07.2021, 15:41
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Re: What would you do with CHF 2-3 millions ?

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Generally, the rule is that you shouldn't draw down more than 3% or so if you want the funds to maintain their value over time. At 3M, and without tax thats 90K CHF - not tons even for a single person when you consider rent, tax, etc. etc.
But what if get out of the country and go live in thailand or the likes?
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  #45  
Old 09.07.2021, 16:06
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Re: What would you do with CHF 2-3 millions ?

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Generally, the rule is that you shouldn't draw down more than 3% or so if you want the funds to maintain their value over time. At 3M, and without tax thats 90K CHF - not tons even for a single person when you consider rent, tax, etc. etc.
I thought the SWR was generally seen as 4%? If you invest in growth rather than income investments, tax is going to be close to zero (small amount of wealth tax). As a single that’s plenty even in Switzerland, particularly if you didn’t previously have a lavish lifestyle.
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  #46  
Old 09.07.2021, 16:09
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Re: What would you do with CHF 2-3 millions ?

Go and buy a small b&b somewhere where it is warm and where there is surf. Live small, enjoy your days, learn a new skill that you have always wanted to do but never had time. Like making a killer breakfast, thats the work done for the day. Keep busy for sure but at your own pace. Now what were those winning numbers again.....
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  #47  
Old 09.07.2021, 16:34
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Re: What would you do with CHF 2-3 millions ?

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Generally, the rule is that you shouldn't draw down more than 3% or so if you want the funds to maintain their value over time. At 3M, and without tax thats 90K CHF - not tons even for a single person when you consider rent, tax, etc. etc.
In terms of salary, it probably takes around 150k for 90k after tax (10-15% deductions, 20-25% income tax). That should be plenty to live on.
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  #48  
Old 09.07.2021, 16:54
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Re: What would you do with CHF 2-3 millions ?

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I thought the SWR was generally seen as 4%? If you invest in growth rather than income investments, tax is going to be close to zero (small amount of wealth tax). As a single that’s plenty even in Switzerland, particularly if you didn’t previously have a lavish lifestyle.
i think you're talking about different things. the SWR (as typically used) is the amount which achieves >$0 ending balance after 30 years with a high probability of success. whereas to have the funds maintain value forever (i.e. keep principal and live off gains/income only) you would need a lower rate.

also: wealth tax can have a big effect over time. just using comparis, assuming 3M of wealth and 90k of retirement income, you're around 20-25k in taxes for Zurich. In Basel it's more like 40k - quite a chunk compared to the income!

Last edited by Phil_MCR; 09.07.2021 at 17:04.
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  #49  
Old 09.07.2021, 16:59
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Re: What would you do with CHF 2-3 millions ?

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i think you're talking about different things. the SWR (as typically used) is the amount which achieves >$0 ending balance after 30 years with a high probability of success. whereas to have the funds maintain value forever (i.e. keep principal and live off gains/income only) you would need a lower rate.
Although at 35, and presuming you plan for the worst/best case scenario of living into your 90s, the % would actually be almost identical. When you are 65 clearly they will have diverged quite a bit.
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  #50  
Old 09.07.2021, 17:06
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Re: What would you do with CHF 2-3 millions ?

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Although at 35, and presuming you plan for the worst/best case scenario of living into your 90s, the % would actually be almost identical. When you are 65 clearly they will have diverged quite a bit.
if you're immortal, then SWR would be equal to the perpetual rate. it's just a note that people sometimes take the SWR without realising that it having zero balance after 30 years is considered a successful outcome in the formulation of that rate. probably you wouldn't consider it a successful outcome if you want to retire at 35.
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  #51  
Old 09.07.2021, 17:13
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Re: What would you do with CHF 2-3 millions ?

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Most of them just spend all the money within 5 years, so end up penniless & without a job.
I remember reading something about the UK Lottery around 20 years ago. Seems that a significant portion of the winners wished they had never won. They lost their friends, had family feuds, went to jail, got jobless, ended up broke, etc.

Whereas, a significant portion of the 2nd price winners were really happy.

1st price was around £5-10m and therefore life changing. 2nd price was a few hundred thousand therefore not enough to be life changing, but enough to pay off the mortgage and therefore have extra cash at the end of the month for a nice holiday, nicer car, eat out a little more, etc.

So, if if you want to change your life, make sure you get CHF20-30m so that you can blow it on coke and hookers and still have some buffer. If you only have CHF2-3m, do Fundsmith, get a more fulfilling job even for less pay, and have nicer holidays.
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  #52  
Old 09.07.2021, 17:21
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Re: What would you do with CHF 2-3 millions ?

Can't do much with 3 million these days without going broke.
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  #53  
Old 09.07.2021, 17:36
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Re: What would you do with CHF 2-3 millions ?

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i think you're talking about different things. the SWR (as typically used) is the amount which achieves >$0 ending balance after 30 years with a high probability of success. whereas to have the funds maintain value forever (i.e. keep principal and live off gains/income only) you would need a lower rate.

also: wealth tax can have a big effect over time. just using comparis, assuming 3M of wealth and 90k of retirement income, you're around 20-25k in taxes for Zurich. In Basel it's more like 40k - quite a chunk compared to the income!
I thought the SWR was a FIRE thing, so wouldn’t make any sense for it to run out after 30 years. Long term equity returns are above that (HvF can provide ready statistics on the S&P 500 &#128521 For my own calculations I prefer to use absolutes that can be flexed if needed rather than an annual % of the pot. Basically an essentials budget which is low and plenty left over in normal market conditions for indulgences (about 1.5X the necessity budget).

Why would you have income? Invest in dividend light ETFs or whatever and sell capital every year for living expenses.

If tax is a concern, that’s what living in Schwyz is for with the added bonus that the cost of living is lower.
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  #54  
Old 09.07.2021, 18:27
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Re: What would you do with CHF 2-3 millions ?

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Coke and hookers.

Tom
The rest you'd just fritter away.

Me, I'd buy a diverse portfolio of stocks and continue working. I like my job.
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  #55  
Old 09.07.2021, 20:59
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Re: What would you do with CHF 2-3 millions ?

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I thought the SWR was a FIRE thing, so wouldn’t make any sense for it to run out after 30 years. Long term equity returns are above that (HvF can provide ready statistics on the S&P 500 &#128521 For my own calculations I prefer to use absolutes that can be flexed if needed rather than an annual % of the pot. Basically an essentials budget which is low and plenty left over in normal market conditions for indulgences (about 1.5X the necessity budget).

Why would you have income? Invest in dividend light ETFs or whatever and sell capital every year for living expenses.

If tax is a concern, that’s what living in Schwyz is for with the added bonus that the cost of living is lower.
You can look at trinity study here:

https://www.aaii.com/files/pdf/6794_...ustainable.pdf

There are various flaws which are picked up by various papers written afterwards, but this is what most FIRE advocates refer to. The paper was about picking a safe withdrawal rate at retirement (not early retirement). FIRE people just read the headline 4% without looking at the details.

The average returns can be higher than the SWR. You have to account for something known as sequence of return risk. Even if you have higher average returns than the withdrawal rate, if you have losses early on, these compound. Imagine you retire and the market crashes 50% in the first year. If you withdraw 3% of the original pot, it is now actually 6% of the diminished pot. If the portfolio stays low, for say 5 or 10 years, you erase a large chunk of the pot even if returns pick up later and average out higher than the withdrawal rate.

I assume if you have 3M assets, you probably have some minimal other income. Though if not, the wealth taxes become an even bigger proportion of the tax.
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  #56  
Old 09.07.2021, 22:34
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Re: What would you do with CHF 2-3 millions ?

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You can look at trinity study here:

https://www.aaii.com/files/pdf/6794_...ustainable.pdf

There are various flaws which are picked up by various papers written afterwards, but this is what most FIRE advocates refer to. The paper was about picking a safe withdrawal rate at retirement (not early retirement). FIRE people just read the headline 4% without looking at the details.

The average returns can be higher than the SWR. You have to account for something known as sequence of return risk. Even if you have higher average returns than the withdrawal rate, if you have losses early on, these compound. Imagine you retire and the market crashes 50% in the first year. If you withdraw 3% of the original pot, it is now actually 6% of the diminished pot. If the portfolio stays low, for say 5 or 10 years, you erase a large chunk of the pot even if returns pick up later and average out higher than the withdrawal rate.

I assume if you have 3M assets, you probably have some minimal other income. Though if not, the wealth taxes become an even bigger proportion of the tax.
Re the tax not necessarily. People are talking about the feasiblity of living off the assets, so not generating other income. In Schwyz the wealth tax would be CHF 6k per annum. If you added 50k of taxable income (which equates to about CHF 70k gross), you‘d pay another 1.8k in tax.

Thanks for the link

For the sequence risk can be quite nicely modelled here. https://www.firecalc.com/
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  #57  
Old 09.07.2021, 23:10
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Re: What would you do with CHF 2-3 millions ?

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I knew you would say something like that
We all knew

Last edited by cannut; 09.07.2021 at 23:31.
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Old 09.07.2021, 23:16
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Re: What would you do with CHF 2-3 millions ?

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Imagine if you were 35 years old, single, no kids, no debt, had 9-5 office job. What would/should you do if you received taxable CHF 2-3 millions?


https://www.pinterest.ca/pin/576953402268270795/
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  #59  
Old 09.07.2021, 23:20
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Re: What would you do with CHF 2-3 millions ?

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Why don’t you tell us?

Nothing like provoking useless, sexist responses with a senseless way of asking a question, no?
Just how we like it
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  #60  
Old 09.07.2021, 23:22
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Re: What would you do with CHF 2-3 millions ?

Re: What would you do with CHF 2-3 millions ?

Invest all into Sam coins
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