“The First CHF 100,000 Is a B!t*h”: Why Reaching This Milestone Changes Everything
August 8, 2024
4 min read
arvy's Teaser: Charlie Munger, Warren Buffett's partner, said: "The first 100,000 is a b*tch. But you gotta do it." Why? Because after that point, compound interest takes over. Your money earns more money than you deposit yourself. And in Switzerland, you have an unfair advantage: tax-free capital gains, 3a tax savings, and one of the best wealth-building frameworks in the world. Here's the maths — and the concrete roadmap to get there faster than you think.
Why CHF 100,000 Is the Magic Tipping Point
In the early years of investing, very little happens visibly. You deposit CHF 500, the market returns 7%, that's CHF 35. CHF 35. You skipped a new phone for that. It feels pointless.
But that's the thinking error. Compound interest isn't linear — it's exponential. It starts slowly, almost invisibly. Then it explodes.
Look at the "Time" column. The first CHF 100,000 takes over 6 years. The last CHF 500,000 takes less than 7. From CHF 100,000, your money earns CHF 7,000+ per year for you — more than you deposit in an entire month. Compound interest overtakes your savings rate. That's the tipping point.
"The first $100,000 is a b*tch, but you gotta do it. I don't care what you have to do — after that, you can ease off the gas a little bit." — Charlie Munger
The Swiss Advantage: Why You Get There Faster Than Everyone Else
Most "first 100k" articles are written for the US market. But Switzerland has three structural advantages that massively accelerate the path:
Advantage 1: Tax-free capital gains
In Switzerland, private investors pay zero tax on capital gains. In Germany, the US, or UK, 25–40% of your gains go to the government. In Switzerland: nothing.
Your compound interest works unbraked. Every franc of gain is fully reinvested, not reduced by tax first. Over 20 years, this single difference is worth tens of thousands.
Advantage 2: Pillar 3a = turbo mode
Depositing CHF 7,258 into 3a each year = CHF 2,000–2,500 tax savings (depending on canton and marginal rate). That money flows straight back and can be reinvested.
Over 10 years: CHF 20,000–25,000 in free tax savings — available to invest. It's like a free pay rise that goes directly into wealth building. (→ 3a Guide)
Advantage 3: High salaries, low inflation
Switzerland's median income is CHF 6,788/month. Using the 50/30/20 rule (50% needs, 30% wants, 20% save/invest): that's CHF 1,358/month available to invest. Meanwhile, inflation runs at ~1% historically — your money holds its value better than almost anywhere else.
Result: you can invest more AND it retains its purchasing power.
The Concrete Roadmap: How Fast You Get There
At CHF 1,000/month invested, you reach CHF 100,000 in just over 6 years. Most Swiss residents in their 20s and 30s can do this — especially when 3a tax savings are reinvested.
The Snowball Effect: What Happens After CHF 100,000
This is where it gets magical. With CHF 100,000 invested and CHF 1,000/month continuing:
Read the last row. You deposited CHF 340,000 over 20 years. Your portfolio is worth CHF 920,000. CHF 580,000 was earned by compound interest — more than you contributed yourself. From here, your money works harder than you do. That's financial freedom.
The 5 Swiss Accelerators
Want to get there faster than 6 years? Here are the levers that work in Switzerland:
🚀 Max out 3a and invest it — CHF 7,258/year + ~CHF 2,200 tax savings reinvested = nearly CHF 9,500/year in investment power (→ 3a Guide)
🚀 Automate your savings plan — standing order the day after payday. What you don't see, you don't spend. (→ Savings Plan Guide)
🚀 Avoid lifestyle inflation — pay rise? Invest 50% of it. Spend the rest guilt-free.
🚀 Invest bonuses and 13th salary — lump payments straight into the plan. CHF 5,000 bonus invested = CHF 19,000 in 20 years.
🚀 Cut unnecessary subscriptions and insurance — CHF 150/month saved and invested = CHF 43,000 in 15 years.
What Changes Psychologically
The path to CHF 100,000 doesn't just change your account — it changes you.
You think in opportunity costs. A CHF 200 dinner isn't CHF 200 — it's CHF 780 in 20 years. You still spend the money if it's worth it to you. But you make the decision consciously.
You fear crashes less. Anyone who has survived their first -20% portfolio drop without selling has learned a lesson no book can teach: crashes are temporary, panic selling is permanent.
You become calmer. With CHF 100,000 invested, you have a buffer that gives you freedom. You don't have to keep a job that's destroying you. You don't have to accept every offer. Money gives options — and options give peace.
What If You're Late?
You're 35, 40, or 50 and haven't reached CHF 100,000? The principle doesn't change. Only the speed does.
At 40, you likely have a higher income, 3a potential, pension fund buy-in opportunities, and possibly savings sitting idle in a bank account. The accelerators are stronger. The motivation is clearer. (→ Investing After 50)
The goal isn't CHF 100,000. The goal is the tipping point. The moment compound interest does more than you do. Whether you arrive at 30 or 45 — arriving is all that matters.
"You don't need to be rich to invest. But you need to invest to become rich. The first CHF 100,000 proves you can do it. Everything after proves you meant it."
Start your path to CHF 100,000.
Set up a savings plan, invest your 3a, let compound interest do the work. With arvy, you invest in the 30 best companies in the world — from CHF 1, no minimum term, with real people who answer your questions.
Disclaimer: This article is for general information and does not constitute investment advice. All calculations are based on an assumed average return of 7% p.a. and are illustrative. Historical returns are not a guarantee of future results. arvy is a FINMA-regulated asset manager.
