Special repayment, saving or consumption?

The MAJORITY have taken out loans with 10-15 years fixed interest rates. There is only one reason for this: the interest rate is cheaper, so I don't have to repay as much monthly and have more money for consumption.

If that is the case, then I find such an attitude more than regrettable. Consumption for the house is okay, but consumption to appear better outwardly than behind the facade is what it is, basically at the expense of repayment.

That is not my thing, definitely not, the examples mentioned are completely correct. There are simply situations where one would have wished to have repaid more.

The asset structure is generally crucial. There is no black or white, as has already been said. However, one can suggest considering proportionality. A (owner-occupied) property is for most people a gigantic lump in their own asset structure. "Having no debts" is a feeling, nothing rational. You can try to 'counteract' this, because you miss out on a lot, namely the very good chance of a quick debt relief, as would be the case with special repayments.

The middle way is decisive – after all, there is no crystal ball, and the current situation is unprecedented. It may be that the ETF bubble (actually Big Data Tech) continues to boom. But in the USA, they are already discussing breakups as they did 100 years ago. Another example is Japan – just google "Nikkei 225 Index - 67 Year Historical Chart" – there are setbacks that one never recovers from, certainly not precisely in "short" 10-20 years.

The rest is survivor bias – those who fully invested in ETFs and only closed after 10 years have done exactly right so far. In 10 years, we will know the "correct" way for the coming 10 years. But what should be clear – the fear of missing out is not good when it comes to financial matters either – being late to the party is also bad.

I have nothing against gambling - and the way many push their financial limits and ignore follow-up financing is gambling. What I cannot stand are gamblers who

[*]claim a right to guaranteed winnings for themselves (but not for others) [*]gamble against their partners in the construction project (bargain fiercely and then cause a fuss when the quality suffers) [*]complain and whine when they lose [*]look for someone else to blame for losing (They didn’t inform me about that...) [*]refuse to learn from it and continue doing exactly the same

So going into consumption and building at the same time is OK, but complaining when it goes wrong is not.

After we discussed so diligently here 2 years ago, I would now like to hear again if everyone would decide the same way as back then. Now that everything is really getting super expensive, I am glad that we remained so persistent and always diligently made (special) repayments. On 07/30/22 the last installment for the house will be paid, and then we're done, and I am 41, my wife 33. Given the current inflation rate, there really couldn't be a better time. Of course, no one could have predicted this beforehand, but I am glad that we didn't choose the double burden of paying off the loan and saving in ETFs. Starting 08/01, I can calmly set up a savings plan and continue living my consumption as before, even with the higher prices.

After we discussed so diligently here 2 years ago, I would now like to hear again if everyone would decide the same way as back then. Now that everything is really becoming super expensive, I am glad that we stayed so persistent and always paid down (special) installments diligently. On 07/30/22, the last installment for the house will be paid and then we are done, and I am 41, my wife 33. With the current inflation rate, there really couldn't be a better time. Of course, no one could have predicted that beforehand, but I am glad that we did not choose the double burden of repayment and saving in ETFs. From 08/01, I can calmly set up a savings plan and continue to live consumption as before despite the higher prices.

This question does not even arise for most home builders. With the beginning of the 40s, very few of those who build today will be finished, with loans beyond 600K€. And with the current prices, there is usually hardly anything left for special repayments.

I don’t understand: Especially now in times of inflation, old debts with low interest rates would be nice, wouldn’t they?

Or is there no impact on your salaries?