Salary, Savings, Investing in Germany 🇩🇪 (+Improve Vocabulary) - Learn German Fast Podcast

Hello everyone, welcome to a new episode of the podcast. My name is Natalia. I'm with my father-in-law Rolf again today. Thank you for being back. Thank you for the invitation again, and a warm welcome to this proper episode. Yes, the episode is indeed very important. Today we are talking about wealth building. This is a very complicated, yet simultaneously important topic. I hope we can help you a little again. or perhaps that we can enlighten you a little. My dear ones, the finance podcast starts in a few minutes. But I wanted to announce one more thing to you. Today is the last day you can get up to 50% off when signing up you can get for all my intensive courses. My birthday discount lasted for two weeks. Also today is really the very last day, so the very last chance. If you've thought long and hard about whether you should start, and when you should start. Today is the moment. Click the link below this video. Choose one or two intensive courses and sign up. And now I wish you lots of fun during our podcast episode. Good, then let's get started right away. My first question is quite general. One could actually say quite simply. Saving is something where I set money aside, to be prepared for any expenses I might have. I usually keep saving as long as until I have two to three months' salary saved in a savings account or similar uh, if the washing machine breaks down, what breaks down on the car, not having to take out a loan but immediately have the money available to pay this bill. Also, that you have it readily available like cash. Exactly, but not in the checking account, because that's what you spend. At any rate, normally. That's how it is with a separate account, where you don't see it every day. Right. Out of sight, out of mind is also such a nice German proverb. If I don't see it directly in front of me, I gladly forget it, and then I have it when I need it. And if you want to learn the entire vocabulary from this episode, Then download the entire PDF file completely free of charge. We will script the conversation for you and write down the vocabulary. Create one more exercise for it. Also feel free to click the link in the comments or click the link in the show notes on all podcast platforms. And don't forget to like this video. Give us lots of love and feel free to write in the comments. The longer your comment, the more reach we get. Also, the algorithm likes long comments. Alright, Faber, thank you very much. You also said what saving is, but what then is investing? Investing is something where I set money aside. either as a one-time amount or monthly, to build up a fortune for myself. That means wealth is indeed not a term that is closely associated with having a lot of money. That is what I have; that is my wealth. But it should be like this, that the money I set aside there at least 5 years not necessarily required. Ah, okay, that is an important point. When investing, one must go in with that thought in mind, that I won't see the money for five years at first. By the way, guys, if you watch the first episode with my father-in-law if you haven't seen the wealth advisor yet then definitely click here in the top right corner And watch the episode about insurance. Also today we are talking only about investing and saving, but in the first episode we already have a lot Speaking of insurance in Germany. Good, we've clarified that: saving and investing. When should one start thinking about wealth building? So superior, to worry? Parents can already do this in advance for their children. Ah, okay. Is that typical, that parents do that for children? When are children born? Parents and grandparents like to set aside a little money now and then, so that their grandchildren or their children have a good start in their professional careers, for example Also, for ages 18 to 20, most put it aside. to be able to provide a larger amount of money to the children with which they acquired the first appliance in the apartment, the first car, be able to finance the driver's license. A driver's license is a good word, Because by now he's very, very expensive in Germany. It usually costs between 3,000 and 4,000 euros. Really? Yes, and it must be somewhere over there. There you can do something meaningful even with very small amounts for your grandchildren. How much do people usually save? Around 20 euros or maybe 50 euros, what's your experience? Most parents or grandparents also start with around 25 euros per month. If that's still too much, you can also turn it down. Then you just don't do it monthly, that's all. It is done quarterly or semi-annually. But one should at least earn 300 euros per year, that is 25 euros per month. so that it's worth it at all. Then, when the child is 18, Then it had about a few thousand euros on the account. That's really cool. When talking about oneself, from when should one start reflecting on it? And if young adults haven't invested anything at all yet, Not having spared anything, where do you start, when do you start? With the teaching, with the teaching, or with the study. I usually earn money during my studies as well. I usually work on it part-time anyway. And if I can still divert a bit from that, Should I do that too, just to save money at first? before I have a few thousand euros on the account again, to be prepared for emergencies, so that one can then proceed to investing where I build long-term capital. Also, as a rule, most people do it either at the beginning of their training, If they're smart, or then after the training, starting the professional career. Also I'd say I wasn't smart, Because I didn't save anything during my studies. Rolf has just used the phrase "to be armed" a few times. That means being prepared. Also I am prepared, ready. Start collecting also in teaching or studies. Can you also start with small amounts, like 10 euros? Or isn't it worth it at all? Of course, it's better small than nothing at all. You usually put a 10-euro note into your savings book at first, though. in order to then save a certain amount of money as one has for reserves. Ah yes. Okay, that's good to know already. And also when one is already employed professionally, Then would you say to start immediately? And best of all today? Yes. Best yesterday? Yes, but best immediately when the first money arrives. Okay. Also, guys, if you're already working, if you have a job in Germany or at home as well, Then consider investing a little money. Or would you say, in that case, invest or save? When saving is done, and reserves are in place, Then I can think about investing. Okay, that's good to know. Also the first step is, I save for 2, 3 months, that my expenses, at least the rent and thus monthly expenses are covered. No, that's not what I mean by it. Huh? No, these are the regular expenses. I mean, if something unexpected comes up, that means a washing machine breaks down, Dishwasher, my car, who knows, a repair in the car is coming up, Many people must end up in the red on their checking accounts. and must pay expensive interest rates. And that's unnecessary if I have reserves. Ah, okay, okay. Just have a few thousand euros in savings for unforeseeable events. Exactly. What would you do differently today than you did 20 years ago? What is done differently today compared to 20 or 30 years ago? Yes, luckily, things are being done differently now. Many people saved twenty or thirty years ago, but not invested. That means saving is always like that, I'm doing this in a savings account, in a daily interest account. It's just money, merely monetary matters. Well actually, that's just a printed promise. Money is always a printed promise, that I can also buy something for myself with it. While, if I invest, I do usually go into the stock markets. This means that I am investing in productive capital. into things that create added value which are now also important for the economy. And there I can then invest and check on my own, I'm introducing a new word, Gusto. Gusto means, in my own estimation. Gusto. Indeed, yes, in my own judgment, What is important to me and where I would like to do what. And would you say that's realistic? to deal with it alone what one invests in? It's difficult. Perhaps one should not invest in individual stocks. That is definitely very important already. When one has a certain amount of wealth, Of course, you can also try it out yourself from time to time. Otherwise, I would always consult a advisor. who knows my financial situation. That's good as well. You, as a consultant, would first analyze the situation. Of course, always. How is the situation in general, and perhaps you could recommend something? Exactly. Or give a recommendation and then let the person decide for themselves. Of course, she always decides for herself. The recommendation I am giving is also applicable in this case, unlike what we discussed regarding the insurance, Usually always two or three alternatives. Ah, okay, that's good. Because after that, one does know from the conversation, what one has led before You know how that person is a bit inclined, don't you? but not entirely. Investing is always also a matter of gut feeling. Of course, one can mathematically prove all of this. what one can do there But a mathematical formula never replaces emotions. Investing is always emotional. Ah, that's interesting. Rule number 1, you first deal with it. what one actually has at all. Rule 2, one saves, that one has enough money for unforeseeable events. Rule Number 3, one might not invest directly into individual stocks. And number 4, you check whether you might find a consultant, with whom one can at least have a conversation. Exactly, in the end, that's actually very important there, that there is a good rapport between the advisor and the client or mandate holder. Because that person surely must also have a certain amount of empathy toward the person, in order to be able to empathize how this person thinks. And then perhaps one more point. One must always know, as an investor, as an investor, Do I want to preserve capital or do I want to preserve purchasing power? Could you perhaps explain that a bit more? Capital power? Capital preservation. Preservation of capital or purchasing power. These are two completely different issues. Capital preservation means Now I'll assume a one-time payment, Not monthly, I'm investing 10,000 euros. And in 10 years, I would like the 10,000 euros to be exactly, must still be standing, and not a single cent lost. That is capital preservation. Then a few more interest charges are added on top. Ah, your capital remains intact. Exactly. Exactly the same amount you had 10 years ago. Exactly. And then there is the preservation of purchasing power. That means I can buy an amount X for 10,000 euros more today. For example, I could buy a used car with it, It's not that bad at all. If I look in 10 years' time, Can I not buy the same used car again? the same quality as now because my purchasing power has decreased due to inflation. I also must, if I add inflation on top, at least 15,000 euros as an example to be able to buy the same used car of the same quality how I can buy him today for 10,000 euros. But in order to achieve that, I must be prepared to take certain risks. Also, to do that, one then has to invest. It's not enough just to save. Exactly. Okay, that's the first question one must ask oneself. And with the risks, I know, it's a difficult matter, There is nothing without risk; everything is associated with risk. But there are certainly ways where one can minimize risk. when investing and where there is a very high level of risk. Could you say a bit about it? Yes, we can do that very easily. If I invest in just a single stock, do I run the risk that I will be left to my fate, also definitely, no matter how the stock develops, connected to it. When I invest in an investment fund, which currently serves as an example representing the entire German stock market, Then I don't care if one of these stocks drops. because others will rise. And then I covered the market, though. But one can imagine it like this, that there is only one company into which you invest. And with an investment fund Are there indeed many different companies? in which you are investing. And the companies balance each other out, so to speak. Or they grow together. Or they grow together. When the entire market falls, The investment fund is naturally included as well. But if only one stock falls in there, The investment fund is not interested. You've already been working in this field for over 30 years. Or more? Yes, almost 40. Fast 40 years. And in this long experience, you can say, that markets actually always rise. Also, if one invests for the long term, that in the long term one always has more money. Or can one not generalize it like that? Also, when looking at the markets, You can easily check that quite well using the Dow Jones Index. If you want to do it yourselves, The Dow Jones Index is available on the internet. Then you can watch it. And then one can see, that one actually always has rising markets. There are phases that can vary in length, where it goes down or stagnates. But usually you always have rising markets. In the long run. Then we'd really be talking about periods of 10 years or more. Yes, but well, if someone is as old as I am, so in one's early thirties or late twenties, One can also invest for the long term and say, I won't need the money until around age 50 or when I retire. Is the risk already very low, that one is still in the red after 30 years? That's almost nothing. Also at the very least, when one looks at the history of humanity. Exactly, so looking at the last 150 years, Then there were always phases when it went overboard. where it went steeply upward. Now, for example, the gold and silver price, the one that has just broken in rises abruptly into a phase It falls down very extremely, and then also very extremely. But if you look at the entire period overall, again and again this point, exceed again the point where he stopped and fell. But as I said, then we'll be talking for ten years or more. And there we are, so from 15 years old we're almost always there. I think you have the loss risk at 3%. If you invest for more than 15 years? So this is equal to zero. Also, is there a 3% chance that you'll lose your money? No, not your money, that you're in the red. Not that you lose money. Ah, you're in the red. Also really, then virtually zero. Okay, that's very interesting. I think many people have this idea. that one can only invest if one has a lot of money. Otherwise, I don't need to start with it at all. That is not true. Okay. One simply says, Property is what I have and my labor power. Those are the two points that constitute wealth. And it doesn't matter at all how much it is. It can be a small fortune, or a large fortune. It is always wealth. Even if I can only set aside 25 euros per month. I'd like to interrupt you briefly, because I was just thinking about something. Wealth is my labor and what I possess. And learning German somehow also belongs to the workforce. Of course. Also, if one has the knowledge, then that is also something one can continue working with what allows one to earn more money. Learning German is also something, increases your value on the job market. Is it really good that you're learning German right now? Of course, if you can speak German, you have many more opportunities, applying to companies have German as a prerequisite to be able to work here. Yes, that is very interesting. You also said it could be very little, what one possesses in money but it is still something one can work with when investing. We just said that you can start saving with 10 euros. Is it the same with investing? I'd say there's a minimum of 25 euros. Okay, at least 25 euros per month, which one should invest. When one has a full-time job, Can one already set aside 25 euros per month? It depends. Yes? I also have many clients where it's really very tight. that they can do it too. Hm, okay. But it's already something you're more or less supposed to aim for. Also at least try to work towards that. Only then can I do something for later. But investment capital, and you mentioned the word pension earlier, These are again two completely different issues. That's exactly what I was about to address as well. Also talking about retirement, One could make a podcast about it. Okay, and if you'd like a podcast about retirement, Then please let me know, write in the comments Pension insurance, saving for retirement. It's not exactly about saving for retirement. Yes, everything just comes together. You have to save up so and so much money, what to do for retirement to prevent it, therefore engaging in private pension planning. There are indeed three pillars; perhaps briefly mentioned. The statutory pension insurance, the occupational pension insurance and the private pension insurance. The three pillars exist. And with private pension insurance, investing is naturally involved. But it is only one kind of it. Yes, you see, so it's a bit complex. But I think it's important to engage with it. Because fundamentally, clearly, we receive a pension from the state. But how much is that in the end? You can all follow this in the media. It's there inside, it's said over and over again. I think we're now at around 54% or 58%. Percent of what? From the last income. Ah, that means if I receive 2,000 euros net, Then my pension is 1,000. Yes, okay, that's not much. That is why I say, one must make private provisions. In addition to the occupational pension scheme. Also, your statutory pension is your legal pension, Company pension contributions are what your company pays into the pension fund on your behalf... No, not into the pension fund, but into a privately financed retirement plan. But perhaps not every company has that either. Any company can do that, and you yourself can also demand it. Ah, that's good. That there is a way to implement it, that's what it's called, in occupational pension provision, the things you can do which the company must offer you. Okay, I actually just have one more question. What would you advise someone who says I'm really afraid of making a mistake? To do nothing is certainly the wrong thing to do. Oh, that's good. Doing nothing is wrong. Of course, because then I always have the problem, that inflation reduces my purchasing power and in a year I'll have even less than I do today. We had years when we had 8 or 10% inflation. very shortly, even not too long ago. I already know that my money is worth 10% less. Wow. One year later. Yes. And accordingly, if I do nothing at all, I am definitely losing money. Oh, thanks, that's so cool. I have learned a great deal myself, and I believe it was also very valuable. Or people, feel free to write in the comments, lots of you. Wow, so interesting. Honestly, I think a lot of people don't do anything. Yes, unfortunately, that's the way it is, God willing. because they simply don't know what they are supposed to do. No amount of AI helps, at least that's my opinion. Although AI can list everything for me according to algorithms, But she cannot, not yet at least, judge how I feel. Yes, and above all, AI cannot press the button and invest your money. Also, this is something one has to do oneself. You must sit down and decide how much money do I have available? How much money do I want to invest? And where should I invest the money? Exactly. Very cool. Thank you. You're welcome. Also, I'm definitely... Good luck, have fun. Yes, good luck, have fun. I am very grateful that you were there. If you have any further questions, feel free to leave us a comment. We will read everything, and if we can help, Then, of course, we'll answer the questions in the comments. And remember, we scripted the entire conversation for you. You can also download it completely free of charge. We link everything in the show notes and in the comments. Stay tuned, stay diligent, and see you next week. Goodbye. Goodbye.