Savings plan for a home: Savings accounts + stocks sensible?

Hello everyone

I (23) and my better half (22) would like to own a house together in Anfang 30 im Raum Stuttgart. Since two things are required for this - equity + a reasonable net income - we have devised the following plan.

[*
Investment in our human capital
[*]A relatively high savings rate (at least 40%) to build up enough equity (more on that later)



We have already completed the first part of the plan halfway. I have already completed an apprenticeship + university entrance qualification + a dual study program and have been working full-time as a software developer (€2,500 net) since last year. She is still training to become a nurse (€900 net + €200 child benefit), but after finishing next year, she will also start a dual study program in the field of business administration - industry (same training pay).

Thus, our net income currently amounts to €3,600 per month.

Our current savings plan for equity is as follows:


[*]€600 daily allowance (me) + €200 daily allowance (her)
[*]€600 in stock savings plans
[LIST]
[*]€250 in boring ETFs for retirement provision
[*]€350 in dividend stocks (McDonald’s, P&G, Johnson & Johnson, etc.) for passive income

Since my first promotion after the training period is already approaching, and several burdens from my studies will cease, an additional €600 will be available at the beginning of next year, which I will save.
As soon as my girlfriend finishes her studies (in 4 years), another €1,000 will be available. Since I hope to keep advancing by then, an additional €500 net may come along with a bit of skill, which I do not want to factor in.

After half a year, we have already accumulated cash assets of €20,000 (+ €2,000 stocks).
Roughly estimated, we would reach around €135,000 equity + €50,000 in securities (conservatively calculated without appreciation) in 7 years.

What do you think of my savings plan? Is it sensible to invest in stocks in parallel to build up passive income/retirement provision? Can the bank’s securities account be used as collateral or would I have to liquidate the portfolio? Maybe someone here already has experience with how banks view securities in construction financing.

Thanks in advance for your assessments and advice

What is passive income??? Appreciation?? Dividend?? Well, what does meaningful mean, you still have to actively manage it despite ETFs to, for example, exit early. You have also seen the fluctuations. The more in active, the higher the risk but also the chances.

I have no problem with doing retirement planning through stocks and other securities. On the contrary, the more time you have, the better; I generally find dividend stocks good for this purpose. I hope, however, you have something other than a few American classics. That has nothing to do with diversification. I don’t know why you make it so difficult for yourself. Take a good dividend fund and that’s that. But to get back to the real estate topic, you should separate that. I don’t know your overall situation, but if what you indicate here is your retirement planning, then in my opinion it should not be used for real estate financing.

If you have such a concrete plan (which I think is good, by the way), you can also consider a [Bausparvertrag]. Who knows what the interest rates will be in 7 years.

Don't forget to still live. You don't live to finance a house. You don't work to finance a house. Provision and savings plans are basically good, but should not be the only thing that fills life. The calculations seem too strained to me. Save, but think about traveling and living before you settle down. Later you might not be able to anymore - maybe not until your mid-50s.

Thank you already for the first answers and advice.

Regarding the question about passive income: Over time, I receive a nice additional income through dividends. Since I invest my money in solid companies that have existed for decades and have also paid dividends for just as long, I practically don’t have to worry about anything. Otherwise, the income wouldn’t really be passive.

The reason why I invest in individual stocks is simple: I simply enjoy the topic of stocks (due to my studies/training in this field). Active funds are 1. too expensive and 2. less than 20% of funds beat an index. That’s why there are the boring ETFs for actual retirement planning. By the way, the allocation is 60/40 USA/Europe.

I prefer not to have to touch my portfolio during the real estate financing but want to show the bank that I could easily add another X€ on my own in case of emergency.

On the topic of living instead of saving stupidly and excessively: Our living costs are so low that we don’t have to do without anything. For example, our rent is only 400€ warm (70 sqm in the middle of a large Stuttgart suburb) and we don’t have/have no need for a car. The ticket for work and to go to Stuttgart on the weekend costs only 86€. Since we always cook fresh ourselves, we spend only 250€ on groceries on average and go out to eat twice a month. And the topic of vacation is not neglected either. We spend around 2,000€ a year on a beach vacation (Caribbean, Greece, and co.) and otherwise travel to various European cities for cheap for another 1,000€ a year.

I simply learned during my studies how to live well with relatively little money (1,000€ a month) in an expensive city like Stuttgart. And since I have been living together with my girlfriend for 3 years now, we can manage well together without having to do without anything at all.

The bank is not really interested in how big your stock portfolio is. Why? There is a crash, the issuer goes bankrupt, or your future wife clears out the portfolio and runs away with the lover. What matters is the creditworthiness and how healthy the financing is (loan-to-value, equity ratio). Other people collect vintage cars that increase in value, no one cares about that either.