How can I best save equity?

Hello,

the question mentioned in the title has been on my mind for quite some time. I am still relatively young (23). However, you can never start saving for a home early enough. That’s why I am asking you. What can I do? Is a simple building savings contract enough?

Zur Situation, Vorstellungen etc.

As I said, I am still relatively young. I want to build a house in my mid-30s, so in about 12 years. I have completed my vocational training and currently earn about €1,500 net. However, I will soon start a distance learning program. If I successfully finish that in about 3 years, the €1,500 net will hopefully not be the end, but rather increase.

My girlfriend is 21 and is currently doing a dual study program. She will finish in two years and then earn a full salary.

Together, we derzeit have a monthly net income of about €2,500 (this net income already deducts €100 VL for my private retirement provision).

We have expenses of about €1,500 per month (carefully recorded in the household budget book). We therefore always divide the surplus of €1,000 quite diligently. Now, however, I don’t want to put all €500 straight into a building savings contract, etc. I was rather thinking of about €300 per month. Later, when she has finished her training and I have completed my studies (we would still have almost 10 years to save), I would of course like to increase the amount to about €600 - €1,000 monthly (of course depending on the financial situation). However, my girlfriend wants to keep her savings for herself for the time being and not immediately invest in a building savings contract.

In addition, I will be transferred a rented and paid-off condominium from my father within the next 5 years, worth about €100,000.

The condo should of course later also serve as security for the bank. But of course, like everyone else, I want to have saved as much as possible beforehand.

Our ideas for the house, plot and all costs are around €350,000 - €400,000. Unfortunately, that is already a huge amount of money when I imagine that I/we should have about €100,000 - €150,000 in equity at €400,000.

Now to the probably already usual question:

How can I best invest my money? Only a building savings contract that can be increased later? Mixed forms, funds, etc.?

What would you recommend in this situation?

Hello, Robbie!
That’s exactly how I was at that age too.
A few years later I was divorced, the savings were back to zero – and thank God we had neither children nor a house.
As Grandma always said: "Save in times of need - then you have when you’re dead!"
In the meantime, I wasted quite a bit of money on the Neuer Markt, my life insurances had long since reached the projected maturity value, and usually you can say, whoever puts their money in a company pension scheme gets the money cheaper, which he wouldn’t have to borrow if he had invested it wisely.
My current tip: Save a reserve in the hope that the Greek euro doesn't all go up in smoke and LIVE.
If, as explained, your income rises and the equity basically comes from Dad and the interest rates are low again in 12 years and you’re still together with your girlfriend (chance about 12%), then you can look further.
Greetings,
Tomtom
PS. I just moved into the new house – significantly later than planned. And I would NEVER build again – only buy an existing property.

Hello Tomtom,

thank you very much for your reply.

Yes, I already know that great saying too. No worries, the €1,500 also includes little fun things like buying a new watch, going to the movies & eating out, etc. Otherwise, we would only have expenses of about €1,000. We are real Swabians, after all.

So you mean I should just leave it in my fixed deposit account and if I want to buy something, I just do it, and if not, it will just grow faster?

Currently, I still have about €5,000 in profit participation rights with a wind power company (currently yielding 8%). I’m wondering if I should maybe gradually save/increase that to about €15k - €20k. After all, 8% interest on €20k would be quite impressive.

The equity comes from my father in the form of an apartment, yes, but as I said, personally I would prefer to already have enough equity without having to heavily mortgage the [ETW] or anything else.

Also, there are times when I am really an impulsive buyer. If the money wasn’t fixed, I would be afraid that I could never save anything. That’s why it should be reasonably fixed.

I think I still have enough time to save in about 12 years.

I hear from several people that they would never build new again. But especially for me as a Swabian, it’s almost a must, and I definitely want to build myself and also do many tasks like laying floors, wallpapering, etc. by myself. I think once in a lifetime you MUST have done something like that.

Regards

Robbie

Hello, Robbie!

Building a house is and remains partly an emotional decision. After all, you don’t have children because of the return.

As for the Genusscheine: don’t increase your stake, get rid of them! Why should a solid company pay its investors 8% return when it could get the money on the capital market for half the price!???? But I know from my own experience: greed makes blind.

By the way, I play the lottery (1 field). The chances are low, but the possible return!!!!!!!

Regards,
Tomtom.