How should we finance? Budgets and their distribution?

You are brave enough for the stock market. So what’s stopping you? With your income, you will have paid off the 400k in 15-20 years and laugh about the annuity. Regarding retirement planning: as an average person, you should of course use the normal implementation methods (BAV, Riester, Rürup, RV/LV), but he can’t be compared to the rest. With his capital (380k + 180k apartment), he has generated/inherited/won/etc more capital than most will ever own at 67 years old. At 60, there will definitely be a million there, and he can comfortably set up a payout plan while continuously increasing his money on the side. The issue of construction costs being too low: that could very well be the case, but the good man has so much buffer and money in reserve that he doesn’t have to worry about it... Best regards

Well, equity with the apartment is at 568k. That will also be used up for the house, whether part of it is financed or not doesn't matter for now. Wealth building starts again from zero. Sure, a paid-off house is then there, and it could also be turned back into money, but somewhere you want to live. If the wealth at that age is self-earned, I see no problem in being correspondingly well-off by retirement. If the majority comes from an inheritance, it looks different.

Well, equity including the apartment is at 568k. That will also be needed for the house, whether part of it is financed or not doesn't matter at first. Asset building starts again from zero. Sure, a paid-off house is then there, it could also be turned back into money, but somewhere you want to live as well. If the wealth is self-earned at that age, I see no problem being correspondingly well-off again by retirement. If the majority comes from an inheritance, it looks different.

I don't understand this approach?! For what reason should he put all his capital + apartment into the house? So that he has "no debt"? But he suffers massive interest losses for it... even if I had 5 million in the bank, I would mostly finance my 1.5 million house with debt (purely hypothetically). There is not a single argument for using almost all equity for the house. One is definitely not going to get such a low interest rate again in the near future. Unfortunately, for many Germans (yes, I really mean Germans) the stock market is synonymous with total loss.

So you think it's a good idea to build your entire retirement savings on the stock market?
Then ask the people who wanted to retire in 1929 how good this idea is.

So you think it's a good idea to build your entire retirement savings on the stock market? Then ask the people who wanted to retire in 1929 how good this idea is.

Take care of your retirement planning and then ask me the question again! You will see where your money is invested and your guarantee, which you have in it, you pay for very dearly in the form of management fees and meager returns. Speaking of returns... how does it work with the interest? Are they arbitrarily certain numbers? Oh right, there is also the conservative investment, but what is behind it?

Good morning,

Thank you very much for all the input! We really appreciate it.

We will definitely have to plan the house costs and the outdoor facilities more precisely. We probably calculated it a bit too optimistically.

Basically, the discussion pro and contra "ALL In" regarding equity is exactly the point where we unfortunately are not sure ourselves what we should do. As long as the stock market keeps going and you keep the ball rolling, everything is great, but when worse times come, you might look back and think about what you could have already paid off.

One more word about the savings:
The high equity ratio can basically be explained by a consistent, continuous savings rate. We have always lived frugally and tried to avoid unnecessary consumption. No expensive cars and vacations with normal budgets. In addition, some of it came together thanks to stock and ETF savings over the past years. Hold and Buy as a keyword here.

Both of our incomes have also increased by about 60% over the past years.

Best regards,
Christian