Wealth creation requires hard work and discipline, as emphasized by entrepreneur Olga Miler in her insights on financial independence. She advocates for a balanced approach to wealth that includes health and relationships, alongside financial assets. Miler highlights the importance of disciplined saving, strategic investing, and setting clear financial goals. She also supports the FIRE movement and suggests using low-cost investment options, like ETFs, to build wealth while maintaining flexibility in financial planning.
Wealth Building: The Foundation of Work and Discipline
Benjamin Franklin famously stated that anyone who claims you can achieve wealth without hard work and frugality is misleading you. This principle remains relevant today, especially for those who haven’t inherited wealth or found it through marriage.
Olga Miler, a savvy entrepreneur from Zurich, shares her insights on wealth creation in her book “Rich, Richer… Me!” and through her financial education platform, Smart Purse. She emphasizes that true wealth extends beyond mere financial assets. “It’s not just about money; it’s about health, friendships, personal connections, and freedom,” she explains. Reflecting on Maslow’s hierarchy of needs, she observes that most people in Switzerland are already financially secure, focusing primarily on self-actualization.
Strategies for Achieving Financial Freedom
Living in a city like Zurich can be challenging without savings, and recent analyses suggest that approximately 2 million francs are necessary for a stress-free retirement in Switzerland. Miler, who previously advised wealthy clients at UBS, recalls one client who considered 10 million francs as the ideal wealth threshold, allowing for financial freedom while still indulging in life’s pleasures.
For those aspiring to reach similar financial heights, Miler offers practical advice. She notes that entrepreneurship is a significant factor for those who quickly accumulate wealth. “To get rich fast, you need to create and sell something scalable that people truly desire,” she asserts. While climbing the corporate ladder can also lead to wealth, it is less predictable. “The most reliable path to wealth is through consistent, disciplined investing,” she adds.
Additionally, the FIRE (Financial Independence, Retire Early) movement advocates for achieving financial independence at a young age through frugal living, high savings rates, and strategic investments in stocks and real estate. Miler acknowledges the merits of this approach, particularly the focus on independence from employers and the state, as well as the potential for generating income through investments.
As a starting point for accumulating wealth, Miler suggests organizing personal finances using a budget and a detailed financial plan. She warns against the fear-mongering often perpetuated by financial institutions regarding retirement savings gaps, emphasizing that many people find they are more secure than they initially thought.
Building wealth also necessitates a disciplined approach to spending. Miler advises aiming to save 20% of after-tax income for long-term goals, although she recognizes that this may be challenging for families with young children. She advocates for a flexible financial plan that adapts to different life stages.
Setting clear goals for wealth accumulation is crucial, according to Miler. She recommends dividing finances into four categories: an emergency fund, savings for the next year, investments for the next three to five years, and long-term wealth. “Careful planning is vital,” she insists.
To maximize savings, Miler stresses the importance of investing rather than letting money sit idle. “Shift your mindset from piggy banks to investment portfolios,” she urges. This approach allows you to benefit from compound interest and combat inflation. The ideal stock allocation varies by individual risk tolerance, with many investors aiming for a 50-60% stock share, supplemented by bonds for security.
When investing, Miler advocates for low-cost investment options like exchange-traded funds (ETFs) and index funds. A globally diversified equity fund serves as an excellent core investment, while thematic investments, gold, or cryptocurrencies can be added for diversification. “Investing should be enjoyable,” she notes. “But you can achieve wealth with straightforward, unexciting portfolios—it all comes down to discipline.” As long as the tax advantages of the 3rd pillar remain beneficial, Miler views this retirement strategy as highly attractive.
Finally, she encourages consistent investing by committing a fixed amount monthly to investment products. This can be easily managed through ETF savings plans or robo-advisors, allowing for a more automated investment approach. This strategy helps avoid emotional decision-making that can hinder wealth building, preventing future regrets about missed investment opportunities.