header.search.error
Building wealth
If you aren’t born rich, you have to build up your own wealth. That’s easier said than done. Our tips show you how to get started and how to optimize your returns.
Content:
Saving, investing, tax optimization: build up your assets by taking these three steps. The first step is to build up a savings balance. Once you’ve managed this, you can make more of your money and reduce your tax burden through investments and decisions about your pension.
Parking money in savings accounts generates low returns, especially in times of low interest rates. Low-yield savings are also at risk from inflation. Your assets will grow faster if they regularly generate returns that are higher than the interest income from ordinary savings accounts.
This is why it can be advantageous in the long term to turn to other forms of investment. However, bear in mind that higher potential returns can also be associated with higher risks. Before starting to invest, you should first define your investor profile to see, among other things, how risk-friendly or risk-averse you are.
By defining your profile, you are also determining your investment strategy, ideally for the long-term. Your strategy, in turn, determines how you allocate your assets. In other words, the asset allocation gives you a framework for choosing the investment instruments (equities, investment funds, bonds, etc.) and weighting with which you pursue your investment goals.
Defining an investor profile and determining an investment strategy is a major challenge for inexperienced investors. It’s therefore all the more advisable to work with experts who can guide you through this process.
If you want to invest your liquid savings on the capital market, you will need a custody account. Before investing in equities and funds, you should be aware that they bear both high opportunities and high risks.. Their prices and thus their values fluctuate. They can rise, but also fall. And crashes are also a real possibility on the stock market. However, statistics show that phases of rising prices last more than twice as long as the slumps. Over the long term, the financial markets have always recovered. To have time for this, you need a long-term investment horizon.
You can also reduce the risk of losses by diversifying your portfolio. Don’t just buy stocks in one company or shares in a fund or ETF. By building up several positions within various asset classes, you are less dependent on the performance of any one security. Risk diversification works even better if you also invest in other asset classes, such as bonds, real estate or gold.
Avoid speculative vehicles that promise a supposedly “safe, quick return.” No return is risk free.
Another mistake many investors make is to hold on to investments that have done well for them in the past. However, the return on an investment does not depend on the past, but on the future. You should go over your investments once a year. Are they still allocated correctly? Our tips:
By saving with a plan, you can take advantage of tax benefits. These are available in pillar 3a, pension funds and for home renovations.
When saving voluntarily in pillar 3a, employees with a pension fund may pay in up to CHF 7,258 in 2025. These deposits are deductible from taxable income; a one-off lump-sum tax is due at payout. Self-employed persons without a pension fund can pay in up to 20 percent of their income up to a maximum of CHF 36,288. In addition to the tax advantage, you will also ideally earn a return on the investment. However, the assets you build up through pillar 3a are tied up and can only be withdrawn under certain conditions or at the earliest five years before retirement. Exceptions generally only apply if you want to finance your own home, emigrate or become self-employed. Disability and death are also considered exceptions. The same applies to an early withdrawal of pension fund assets; however, other exceptions apply here.
Keep in mind that a custody account could offer higher potential returns in pillar 3a compared to a savings account.
And speaking of tax benefits: voluntary purchases into the occupational pension funds are also tax-deductible.
Have you already given thought to your retirement? Excellent – the sooner, the better. With time, even small amounts can grow into significant sums. And best of all: paying into pillar 3a also means paying less tax.
For homeowners, a long-term savings balance gives them an opportunity to finance major renovations. Such investments are tax-deductible, provided they serve to maintain value or improve energy efficiency. The tax advantage is greater if you stagger the renovation project and spread the costs over several years. The choice between an effective and a flat-rate deduction gives you flexibility that you can use to reduce your tax bill. Find out in advance which tax rules apply in your canton.
When it comes to saving, nothing comes from nothing. If you don’t make any decisions at all, you’ll miss out on opportunities to build up your wealth. The earlier you start setting aside money according to a plan, the more flexibility you will have in the long run. This is especially true if you invest your assets with a high return and optimize them for tax purposes. Consider making an appointment with yourself to tackle your finances – or make an appointment with an expert.
Arrange an appointment for a non-binding consultation or if you have any questions, just give us a call.