Five years ago (mid-2013), I was discovering the financial independence realm. While reading blogs at the time, I wondered how long it'd take us to reach a consequent net worth, as some bloggers had already managed to achieve. I'm not talking about the few tens of thousands of francs from our savings and our 2nd and 3rd pillars. No, no, I'm talking about Wealth with a big W. The one that one counts in hundreds of thousands of francs. Or even in millions.
Looking at the history of my articles, I realized that I'd not often detailed the distribution of our net worth. So, I propose that we correct this and make a 2013-2018 comparison to see how all this has evolved, and above all, to show you that it's possible to stash a consequent amount of cash, in only 5 years.
Details of our Net Worth in 2013
At the beginning of our adventure, nothing was optimized in terms of money.
I did some archaeology and this is what we started with:
- 2nd pillar Mrs. MP = CHF 3'859.70
- 3rd pillar Mrs. MP (standard Raiffeisen 3a account) = CHF 2'571.00
- 2nd pillar Mr. MP = CHF 12'556.15
- 3rd pillar Mr. MP (3a pillar tied to a life insurance) = CHF 9'495.55
- Rental guarantee (at BCF back in the days) = CHF 5'310
- Savings (in cash) = about CHF 20'000 (from what I found in our archives, as we didn't use YNAB at the time)
Total Net Worth of the MP family in 2013 = CHF 53'792.40
Among these figures, my biggest mistake was this pillar 3a linked to a life insurance because it's the worst thing that can happen in terms of yield. First, because these solutions are rarely invested in interesting investment funds, or if so, with exorbitant fees for us Mustachians. And secondly, because the "life insurance" part is expensive and above all useless for a Mustachian who is able to create his own safety cushion.
As some readers have pointed out to me, anyone starting out his professional life tends to fall into the trap if these insurers and their 3rd pillars linked to a life insurance, so I hope this article will help you avoid this it...
Details of our Net Worth in 2018
And here is what we are at after five years of frugal life, savings, and thoughtful investment:
- 2nd pillar Mrs. MP = CHF 16'628.00
- 3rd pillar Mrs. MP (at VIAC) = CHF 19'854.00
- 2nd pillar Mr. MP = CHF 20'249.00
- 3rd pillar Mr. MP (at Helvetia) = CHF 18'022.00
- ETF investments (via Interactive Brokers) and Mr. MP company's shares = CHF 122'192.34
- Cryptocurrencies (via Coinbase) = CHF 727.24
- Cash = CHF 16'279.65
- Our home (i.e. our initial down payment) = CHF 145'000
Total Net Worth of the MP family in 2018 = CHF 358'952.23
We have managed to accumulate CHF 300,000 in 5 years. All this thanks to a frugal lifestyle that is more in line with what is important to our family.
The beauty of this thing is that you can achieve it too. You simply need to copy what we've done so far, and apply it to your situation. From today on.
The least optimized thing in all this is my 3rd pillar, which is partially invested in the stock market, but not at all optimal in terms of investment choices and costs. This is the compromise we've reached with our mortgage institution. I plan to stop investing into it and move to VIAC in the next 7-8 years, by re-investing part of the cash to amortize our apartment and reassure them enough to no longer need a pillar with them (to be confirmed/calculated mathematically by then if it's a good idea).
For the rest, including Coinbase which was more of a fun trial, I am satisfied with our choices so far which are optimal for our situation.
Last but not the least: we have finally reached the CHF 100'000 invested via Interactive Brokers! Bye bye CHF 10 monthly fee :)
And you, how much cash have you accumulated in total since you started following the blog? What were your biggest mistakes? What did you learn from them?