When everyone is rich, everyone is rich

Get rich - can anyone do that? Invest and build wealth

become rich - That is why many people play the lottery or hope to win millions in other lotteries and games of chance. But is one million euros enough to be rich? How much does it take for that? And is it really that hard to get rich?

What is wealth in Germany?

Getting rich sounds like a wish at first. However, in order to get closer to the goal of getting rich, a central question arises first: Ab when is one considered rich in Germany?? So what does my goal mean in concrete terms? How much money do i needto be rich.

In any case, it seems conspicuous: Getting rich and building a fortune is an interesting goal for many. But the exact term and definition seems unclear to most people. And some apparently don't even want to belong to the rich. This can be seen at least with some politicians: Finance Minister Olaf Scholz, who wants to run as SPD candidate for chancellor next year, reacted completely evasively. In the ARD program “Report from Berlin”, when asked how rich he was personally, Scholz said: “I would not consider myself rich.”

Almost two years ago, Friedrich Merz, who as a politician is striving for the CDU chairmanship and the candidacy of the Union, made a very similar statement. When asked whether he belongs to the rich upper class, he answered in November 2018 with the statement: "Well, I would count myself to the upper middle class in Germany." When asked, he admitted that he is definitely a millionaire - he was “not under”, said Merz.

What do you think: does it make you rich?

Interestingly enough, there are a number of sites on the Internet that promise that you can get rich “very quickly” or “very easily” - but they do not explain what wealth actually means. Mostly, recommendations for stocks or other products are hidden behind them - often supposed insider tips that you have never heard of.

Concept of wealth - a definition

The Duden describes the Concept of wealth like this: “great possession, accumulation of assets that mean wealth and power”. That is definitely an important orientation: So this is what it is about Assets that you own: i.e. the sum of all account balances, material assets and investments. Savings books, current or overnight accounts are just as much a part of it as fixed-interest contracts, cash, shares, insurance credits (e.g. from life or Riester insurance), building society contracts, fund shares, custody accounts or assets that you have achieved through ETF savings. Of course, this also includes real estate, as well as art or antiques and investments in companies.

This also makes it clear that the definition of being rich is not primarily based on income. Actually, that is also logical: because if you earn a lot but also consume a lot at the same time, you cannot really build up a fortune. The Definition of wealth on income may be due to what is known as the “rich tax rate” in income tax. Accordingly, the top tax rate increases from the normal 42 percent by three percentage points, if that Annual incomeis more than 270,500 euros (for couples: 541.00 euros).

But the fact is: "In science there is actually no generally accepted definition of what wealth is or where wealth begins", as Markus M. Grabka from the German Institute for Economic Research in Wirtschaftswoche.

There are certainly good reasons to use the word wealth for yourself not just with money and assets connect to. Being rich - that can also mean simply leading a good life: happiness, health, freedom, a relaxed and fulfilling life as well as a great family and an intact social environment. True to the motto “Money alone doesn't make you happy”.

Orientation towards the distribution of wealth

However, when it comes to the question of wealth, it is common to put one's own wealth in relation to the distribution of wealth in Germany - for example, the question when do you belong to the top ten percentregarding the distribution of wealth. The Institute of German Economy (IW) in Cologne recently carried out such a study on wealth. The researchers' starting point was also the assumption that those who belong to the rich - i.e. the wealthiest 10 percent - usually do not see themselves that way. Much like the statements made by Olaf Scholz and Friedrich Merz show.

"With a view to the prevailing misjudgments in self-positioning, it might surprise many if they belong to the 10 percent richest (wealthy) who are often the focus of media wealth reporting," says the study.

Based on the definition that you have to belong to the wealthiest ten percent in order to be considered (relatively) rich, according to the IW Cologne a sum of 477,200 euros can be determined. Here is the Based on a couple's household - For single households there would be a different value, which is a little more than half.

Building wealth: how much money do i need?

If you are already adding up wildly whether you are looking for one Household net assets would come - and are thus rich, then you should consider a second aspect: your age. The assets are distributed extremely differently across the age groups, so that the result is extremely distorted.

Because: The older the people in the household, the more wealth there is usually there. At the top ten percent - the rich - this effect is particularly strong. The researchers therefore make it clear: "Which areas of wealth distribution a household belongs to depends crucially on whether the household compares itself with its respective‘ peer group ’or the wealth distribution of the population as a whole."

  • So a household belongs to under 30s Already with 71,200 euros wealth among the richest.
  • In the Age group from 55 to 59 if the amount is the highest: then you need 625,400 euros to meet the criterion.
  • In old age, the mark drops again: all of them older than 75 years old need a household net worth of 517,700 euros to be considered “rich”.

You can easily see where you are from the graphic - the number indicates from what household net assets You belong to the top 10 percent for your age group and are therefore considered rich.

Are you not one of them? Then you may now have a new goal - one that is quantifiable and therefore calculable. Means: Getting rich is possible if you approach it systematically. Just look at what wealth it takes ten or 20 years to get rich. Then you can calculate how much you simply need to invest successfully to meet that financial goal in the future.

Example: If you are 45 years old and that in 20 years Goal "get rich" you have to aim for household assets of 581,800 euros.

Calculate a personal example here

Can You Get Rich By Investing?

In any case, it is clear: without investing it is almost impossible. You would have to hope for an - extremely unlikely - lottery win. With a winning probability of 1 in just under 140 million, you are more likely to lose money than get closer to your personal savings goal. Also hoping for reasonable interest rates for savings accounts or for Fixed depositor daily allowance should rather be in vain. Many banks and savings banks are now demanding penalty interest from their customers on credit balances - and are thus passing on the European Central Bank's interest rate policy.

In their reports, the experts at the Bundesbank are repeatedly convinced that it is precisely values ​​invested in stocks and funds that generate decent returns - and thus contribute to the growth of your assets. Your last report on “Financial Wealth Creation” states: “The financial wealth of private households rose again noticeably in the second quarter and, at € 6,630 billion, reached a higher level than at the end of 2019. One of the main driving forces here was the valuation gains in shares and other equity securities of € 74 billion. The shares in investment funds also benefited from valuation gains, which, taking into account all transactions and valuation effects, rose by € 64 billion (10.6%). "

As early as August, the Bundesbank had made it unusually clear that the Savers in Germanyshould definitely invest and invest more: “In the past few years, interest on bank deposits was almost 0%. Taken in isolation, this dampens the return that private households can generate with their financial assets. In the case of bank deposits, interest payments are the only source of income. In contrast, income from other forms of investment such as stocks, bonds, investment fund shares and claims against insurance companies are also influenced by price effects. In the case of shares and investment funds that invest in the same, dividend payments are usually also made. In addition to the interest payments, these components must also be taken into account for the total return on the household portfolio. "

Means: Without an investment in asset classes like Shares or funds, such as ETFs, it is difficult to achieve reasonable returns - and thus to make more of the money available. Especially for investors who want to long-term wealth accumulation or operate systematic old-age provision, for example for your own pension. In spite of all stock market movements, an investment of more than 13 years has always paid off - regardless of whether you set the German stock market index Dax or the MSCI World, which is often referred to as the world index.

Experience has shown that the best way to protect against possible risks in the financial markets is through targeted diversification (diversification of a financial investment): The value of your capital investment does not depend on a single share value or the development in a particular country or industry.

That's why we at growney rely on precisely this approach: If you save with us with ETFs, the money is invested in several index funds - worldwide. Our investment strategies map up to 5,000 securities from 45 countries. And even if you decide to make a targeted investment in sustainable ETFs, we pay attention to such a distribution: Then our sustainable investment comprises more than 550 stocks and bonds from 42 countries.

Strategic planning for your money

For you this means: Instead of asking about the pattern "How do you become a millionaire quickly?"Or"In which professions can you get rich?"Searching the Internet, it makes more sense to strategically tackle the topic of asset accumulation:

  • 1. Inventory:
    Add up where you stand with your wealth.
  • 2. Define the goal:
    Many want to “get rich”, but specify your personal goal with numbers.
  • 3. Calculate example:
    With our investment planner you can calculate how you can achieve your goal - free of charge and without obligation.
  • 4. Get started:
    Then you can start right away - very easy and straightforward. Investing with ETFs is extremely flexible at growney. You can adjust savings rates at any time or have your assets paid out.
  • 5. Control finances:
    Of course, to get rich you have to have your finances under control. So do everything you can to keep an eye on your income and expenses, and optimize your costs! Regardless of whether you increase your savings rates in this way or make one-off payments from time to time, for example when you receive a Christmas bonus or a bonus - this is how you benefit Goal "Build wealth" faster closer.