Prepayment Penalty for Loans vs. Current Interest Earnings

Basically, it depends on whether you have a better investment alternative that can relatively safely generate a better return for you. Currently, there are again [Tagesgeldkonten] where you would get up to 2% interest. In my view, it makes sense to invest the liquid amount initially and use the amount at the end of the fixed interest period to repay the remaining debt. Especially in today's times, liquidity is very valuable. For this reason, I would not fully invest my liquidity into the [Objekt].

It is not ALSO psychologically more sensible, but ONLY psychologically more sensible. Otherwise ... I wouldn’t know what it should serve. Economically it is not sensible, as you can easily beat the loan interest rate risk-free. Even overnight money is now above 2%, fixed-term deposits even more so.

Basically, it depends on whether you have a better investment alternative that reliably generates a better return. Currently, there are overnight money accounts where you would get up to 2% interest again. From my point of view, it makes sense to invest the liquid amount first and then use the amount at the end of the fixed-interest period to pay off the remaining debt. Especially nowadays, liquidity is very valuable. For this reason, I would not invest my liquidity completely into the property.

Definitely, I have invested about 16k over the past few months spread across four cryptocurrencies for risk diversification, two of which are very established and two new issues. As of today, the return is 90.4%, i.e., nearly doubled. Had I caught the optimal entry point and focused on the best possible variant (which you never know in advance and is of course not risk-free), it would have been demonstrably 2,700%. But unfortunately, I also don’t have a crystal ball and am satisfied with the modest 90%. And I see it the same way: early repayment currently makes no sense with construction financing interest rates under 1.5% or KfW at 0.75%. The money is better invested elsewhere.

Pff. Cryptocurrencies and then also new issues? That’s not an investment, that’s not speculation, that’s simply gambling. You could also have easily incurred a 90% loss. But that’s the trick. In the forums, only those who got lucky and made 90% returns ever write. No one writes "I lost 90%" or "I wrecked my portfolio with crypto in 10 weeks." Here someone wants to give up their fixed interest period and invest money. That means they need a relatively safe form of investment, otherwise they’ll quickly gamble away their house.

Pff. Cryptocurrencies and then also new issues? That’s not an investment, that’s not speculation, that’s simply gambling. You could easily have incurred a 90% loss. But that’s the trick. In the forums, only those who were lucky and made 90% returns ever write. No one writes “I lost 90%” or “I wrecked my portfolio with crypto in 10 weeks.” Here someone wants to give up their fixed interest rate and invest money. That means they need a relatively safe form of investment, otherwise they’ll quickly gamble away their house.

There is a lot of emotion and mixing of investment strategies in your answer. No one puts all their eggs in one basket, i.e. 100% in one form of investment. And within one form of investment, you diversify again. And you don’t invest blindly by random chance but inform yourself intensively. In the end, there remains a certain amount of uncertainty, I agree with you on that. But it shouldn’t be as arbitrary and random as you portray it. I work in risk management at financial institutions and am anything but a risk-loving gambler. I also don’t want to induce anyone to buy cryptocurrencies, or gold, or stocks, or commodities, or or or. But it must also be clear that with savings accounts and their 0.1% interest, one should no longer expect miracles ;-)

Definitely, I have invested about 16k in the past few months, spread across four cryptocurrencies for risk diversification, two of which are very established and two new issues. As of today, the return is 90.4%, i.e. nearly doubled. Had I caught the optimal entry point and focused on the best possible option (which you never know beforehand and of course is not risk-free), it would demonstrably have been 2,700%. But unfortunately, I also have no crystal ball and am satisfied with the modest 90%. And I see it the same way, early repayment currently makes no sense at interest rates of less than 1.5% for construction financing or 0.75% KfW. The money is better invested elsewhere.

Congratulations on your luck. Nothing more needs to be said. As you rightly recognize, this has nothing to do with investing. You could just as well place horse bets or penny stocks with your "house building money." I hope this high-risk investment fits well into the overall portfolio. Then it makes sense, otherwise not.

Wanted to ask how things are going here with the MSCI World 100K + investors. Have you sold? Are you holding on?