“The First CHF 100,000 Is a B!t*h”: Why Reaching This Milestone Changes Everything
August 8, 2024
5 min read
arvy's Teaser: Charlie Munger, Warren Buffett's partner, said: "The first 100,000 is a bitch. But you have to do it." Why? Because from that point on, compounding takes over. Your money earns more money than you contribute yourself. In Switzerland you have an unfair advantage: tax-free capital gains, 3a tax savings, and one of the world's best wealth-building frameworks. Here's the maths — and a concrete roadmap to get there faster than you think.
Why CHF 100,000 Is the Magic Turning Point
In the early years of investing, not much seems to happen. You put in 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 exactly the wrong way to think about it. Compounding is not linear — it's exponential. It starts slowly, almost invisibly. And then it explodes.
Look at the "Time" column. The first CHF 100,000 takes nearly 7 years. The last CHF 500,000 takes roughly 8. But from CHF 100,000 onward, your money earns CHF 7,000+ for you every year — more than you contribute in a whole month. Compounding overtakes your savings rate. That's the turning point.
"The first $100,000 is a bitch. But you have to do it. I don't care what you have to do — if it means walking everywhere and not eating anything that wasn't purchased with a coupon, find a way to get your hands on $100,000." — Charlie Munger
The Swiss Advantage: Why You Get There Faster Than Everyone Else
Most "First 100k" articles are written for the US market. Yet Switzerland offers three structural advantages that dramatically shorten the journey:
Advantage 1: Tax-free capital gains
In Switzerland, private investors pay zero tax on capital gains. In Germany, the US, or the UK, 25–40% of your profits go to the state. In Switzerland: nothing.
That means: your compounding works unimpeded. Every franc of gain is fully reinvested, not after tax. Over 20 years, this single difference amounts to tens of thousands.
Advantage 2: Pillar 3a = turbo mode
Contributing CHF 7,258 per year to 3a = CHF 2,000–2,500 in tax savings (depending on canton and marginal tax rate). That money flows straight back and can be reinvested.
Over 10 years: CHF 20,000–25,000 in gifted tax savings — which you can invest. That's like a free pay rise flowing directly into your wealth. (→ Compare 3a providers)
Advantage 3: High wages, low inflation
The Swiss median income is CHF 6,788/month. Applying the 50/30/20 rule (50% needs, 30% lifestyle, 20% saving/investing), that's CHF 1,358/month available to invest. At the same time, historical inflation sits at ~1% — your money loses less purchasing power than almost anywhere else.
The result: you can invest more AND it holds its value better.
The Concrete Roadmap: How Fast You Can Get There
With CHF 1,000/month and an invested savings plan you reach CHF 100,000 in just under 6½ years. Most Swiss people in their 20s and 30s can do this — especially when the 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 continuing at CHF 1,000/month:
Read the final row. Over 20 years you've contributed CHF 340,000. Your portfolio is worth CHF 925,000. CHF 585,000 was earned for you by compounding — more than you contributed yourself. From here, your money works harder than you do. That's financial freedom.
The 5 Accelerators for Switzerland
Want to get there in less than 6½ years? Here are the levers that work in Switzerland:
🚀 Maximise and invest your 3a — CHF 7,258/year + ~CHF 2,200 tax savings reinvested = nearly CHF 9,500/year in investment power (→ Open Pillar 3a)
🚀 Automate your savings plan — standing order the day after payday. What you never see, you never spend. (→ Start savings plan)
🚀 Avoid lifestyle inflation — pay rise? Invest 50% of it. You can spend the rest.
🚀 Invest bonuses and 13th-month salary — one-off payments directly into the portfolio. CHF 5,000 bonus invested instead of spent = CHF 19,000 in 20 years (at 7%).
🚀 Cancel unnecessary subscriptions and insurance — CHF 150/month saved and invested = ~CHF 43,000 in 15 years (at 6%).
What Changes Psychologically
The journey to CHF 100,000 changes not just your account — it changes you.
You start thinking in opportunity costs. A CHF 200 meal isn't CHF 200 — it's CHF 780 in 20 years (at 7%). 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 the first –20% decline in their portfolio without selling has learned a lesson no book can teach: crashes are temporary, panic sells are permanent.
You become calmer. With CHF 100,000 invested, you have a buffer that gives you options. You don't have to stay in a job that's breaking you. You don't have to accept every offer. Money creates options — and options create peace of mind.
What if You're Starting Late?
You're 35, 40, or 50 and not yet at CHF 100,000? That changes nothing about the principle. It only changes the speed.
At 40 you likely have a higher income, 3a potential, pension fund buy-in opportunities, and perhaps savings sitting in a savings account losing real value. The accelerators are stronger. The motivation is clearer. (→ Investing in Switzerland: Complete Beginner's Guide)
And remember: the goal isn't CHF 100,000. The goal is the turning point. The moment when compounding does more work than you do. Whether you get there at 30 or 45 — arriving is all that matters.
"You don't have to be wealthy to invest. But you have to invest to become wealthy. The first CHF 100,000 proves you can do it. The rest proves you meant it."
Start your journey to CHF 100,000.
Set up a savings plan, invest your 3a, let compounding work. With arvy you invest in the world's 30 best companies — from CHF 1, no minimum commitment, with real people who answer your questions.
Start savings plan | Open Pillar 3a» Compound Interest Calculator: Calculate your turning point
Disclaimer: This article is for general information purposes only 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 an asset manager supervised by FINMA.
