Menu
“Making the first million is hard; making the next 100 million is easy” ― Theo Paphitis
3 min read
“Making the first million is hard; making the next 100 million is easy” ― Theo Paphitis
3 min read
Firstly, congratulations! You’ve achieved a significant sum of CHF 1’000’000 (1M).
Now, with great wealth comes great responsibility. How do you make this work for you in the best possible way? You need to know the essential strategies and options to consider in order to grow and protect your wealth. Fortunately, that’s exactly what Patterson Mills is here for.
Rather than tell you that you ‘should’ be investing, it is important to know why you may wish to consider investing. Naturally, investing is an important part of enhancing your financial wellbeing, so read on to find out why.
Inflation
One significant factor is inflation. Over the long term, the purchasing power of your money can erode due to inflation. For example, if you were to stash away your 1 million CHF under your mattress without investing, its real value would diminish over time. You may still have CHF 1M, but it could then only buy you what CHF 800K could buy you the year before. Essentially, you have CHF 1M in cash, but you have lost CHF 200K in real terms. This is an extreme example, using 20% inflation, though the principle is important.
Historically, inflation has averaged around 1 – 2% annually. This means that the same goods or services that cost CHF 100 today could cost CHF 101 – 102 a year from now, effectively reducing your buying power. By investing, you aim to outpace inflation and protect your wealth. At the CHF 1M level, inflation at 2% could cost you CHF 20,000 (20K) per year!
The chart below is provided by Quilter Cheviot, with data sourced from LSEG Datastream using GBP currency. It displays the annualised returns from 1989 to 2023 of GBP 1.00 (£1). You will notice that equities have surpassed cash by more than double. Your £1 in cash will have grown to £1.77, whilst your £1 in equities will have grown to £5.18.
Capital Growth
Another compelling reason to invest is the potential for capital growth. Whilst cash or low-yield savings accounts may offer stability, they tend to provide minimal returns. On the other hand, well-planned investment strategies can deliver higher returns over time. For instance, if you had invested your 1 million CHF in a diversified portfolio of stocks and bonds over the past few decades with Patterson Mills, you would have seen your wealth grow, potentially even doubling or tripling your initial investment, whilst retaining cash will have provided significantly less returns (as per the chart above!).
Achieve Financial Goals
Additionally, investing can be a means to achieve your financial goals. Whether you aspire to fund your children’s education, purchase a dream home, or enjoy a comfortable retirement, strategic investments can help you get there. The power of compounding, where your investment returns generate additional returns, can be a game-changer in building wealth. Patterson Mills specialise in creating tailored investment strategies designed to meet your objectives whilst factoring in your risk tolerance and financial timeline. Our experienced Financial Advisers will work with you to establish clear goals and a roadmap to help you realise your financial dreams.
Investing your CHF 1M wisely means understanding your risk tolerance and financial goals. Depending on your individual preferences, you might opt for a combination of investments. For instance, you could allocate a portion of your wealth to equities, which offer the potential for long-term growth, whilst also considering bonds for stability and income generation. Real estate investments may also provide diversification and passive income, though you should consult with a Patterson Mills Financial Adviser beforehand. You may also want to explore alternative investments such as private equity or hedge funds to further diversify your portfolio.
One other important consideration is your investment horizon. If you have a longer time frame (i.e you do not need to access the funds until 10-years into the future), you can typically afford to take on more risk, whereas a shorter horizon may lead to a more conservative approach. Whatever your time horizon, ensure you have a tailored investment strategy in place that aligns with your specific objectives, whether it’s wealth preservation, income generation, or capital growth.
Diversifying your portfolio across various asset classes and geographic regions is vital. Within equities, consider investing in both domestic and international markets to spread your risk. In the bond market, diversify by selecting bonds with different maturities and credit qualities, corporate bonds and governmet bonds. Real estate investments can also be diversified across property types, such as residential, commercial, or industrial. Furthermore, alternative investments like private equity can provide non-correlation with traditional markets.
There is no one-size-fits-all solution for a portfolio of any size. Creating a bespoke portfolio for your 1 million CHF is an endeavour that will often require professional guidance. Talking to a Patterson Mills Financial Adviser ensures you will benefit from a comprehensive assessment of your financial situation, objectives, and risk tolerance. This evaluation enables us to design a portfolio that is uniquely tailored to your needs. We will also consider tax-efficient strategies to help you minimise your tax liabilities and retain more of your wealth. Taking a proactive approach to manage your investments, with an Adviser with your best interests at the forefront, is essential.
Managing a sum of CHF 1’000’000 offers both opportunities and responsibilities. By carefully considering the available options and seeking expert guidance, you can optimise your financial future. Whether you decide to invest in a diversified portfolio, explore high-yield savings accounts, or utilise bespoke financial advice from Patterson Mills, the key is to ensure your wealth works for you.
Patterson Mills are committed to helping you make the most of your financial resources, ensuring that your CHF 1M paves the way for a secure and prosperous future. Don’t wait – contact us today to begin your journey towards financial success.
Get in touch with us today and book your initial, no-cost and no-obligation meeting, you’ll be pleased that you did. Send us an e-mail to info@pattersonmills.ch or call us direct at +41 21 801 36 84 and we shall be pleased to assist you.
Please note that all information within this article has been prepared for informational purposes only. This article does not constitute financial, legal or tax advice. Always ensure you speak to a regulated Financial Adviser before making any financial decisions.
Patterson-Mills Sàrl is powered by Lawsons Network and operates as an Appointed Representative. We benefit from their regulatory infrastructure and cutting-edge software, enabling us to safeguard and enhance your wealth. Lawsons Network AG, Company No. CHE-394.490.386, Rue Neuve-du-Molard 19, 1204 Genève, Switzerland. Lawsons Network AG is registered as an Insurance Intermediary with the Swiss Financial Market Supervisory Authority (FINMA – F01379525), a member of the Client Advisors register at Association Romande des Intermédiaires Financiers (ARIF – 32974) and affiliated to Organisme de Surveillance pour Intermédiares Financiers & Trustees (SO-FIT) as an SRO – Affiliate No. 1202.
© COPYRIGHT 2024 – PATTERSON-MILLS SÀRL – POLITIQUE DE CONFIDENTIALITÉ
CE SITE EST PROTÉGÉ PAR RECAPTCHA ET LE GOOGLE POLITIQUE DE CONFIDENTIALITÉ ET CONDITIONS DE SERVICE S'APPLIQUENT.
