Best products from r/eupersonalfinance

> whether I can trust my money in these institutions

I don't know much about the Netherlands (although I'm here at the moment myself, only for a few weeks), but banks throughout the EU are well regulated.

Cash deposits up to €100,000 are protected and stocks you own will probably be held in trust, safely separate from the bank's own assets.

> Also, if I wanted to invest in stocks and businesses what are the great prospects, I assume it would be water engineering companies seeing as how they are the best in the world, right now, in The Hague I'd be 20 metres below sea if not for them.

Read some books about investing - picking stocks does not work for the vast majority of investors. [1, 2, 3]

Check out the book recommendations at the Bogleheads wiki - particularly Bogle's Little Book of Common Sense Investing or The Bogleheads' Guide To Investing. For newcomers to investing who are British /r/UKPersonalFinance usually recommends Tim Hale's Smarter Investing (which I thoroughly endorse), but I don't really know what to suggest for investors outside the UK and US. Watch Lars Kroijer's series of videos.

Going to the Netherlands and investing in water engineering companies sounds a bit like going to india to invest in curry - don't you think everyone's thought of that?

Let's say Bill Der Dyke opens a water engineering company and, after 20 years or so, has built it up so that it has €10,000,000 of assets and earns €1,500,000 annual profit; it floats on the stockmarket at the same time that Jim Van Meer floats his chain of supermarkets which has a €10,000,000 of assets and earns €1,000,000 annual profit. Do you think the shares of both companies will float for the same price? They each issue 1,000,000 shares - if you buy 10 shares of one company then you will expect to earn €15 per year in profits; if you buy 10 shares of the other company then you will expect to earn €10 per year in profits.

Why would you expect stock in these two companies to trade for the same price? If they floated at the same price then everyone would buy the stocks that earn €1.50 per share, and they would then not sell them as cheaply as the supermarket share - the price of the cheaper stock must rise until your €1 invested earns the same whichever asset it is invested in, except as adjusted for risk.

That final caveat in what I've just written underlies the entirety of what we can describe as investing, an activity which has existed literally since the bronze age or earlier. You cannot separate risk from returns and if you can earn the same returns as others whilst taking less risk then you are truly a superior investor.

The blog and podcasts from Listen Money Matters are a great introduction for someone new to investing. I´d start here: https://www.listenmoneymatters.com/investing-101/

Keep in mind that they write from a US standpoint. The basic ideas and principles are the same, but for specific tactics you´ll have to look for more localized information.

I´m a non-Spanish resident in Spain and this book was super helpful. Maybe there´s a similar edition available in Germany? (This one?)

And finally I´d also recommend reading A Random Walk Down Wall Street and/or The Intelligent Investor.

These 3 resources you should give you a good foundation to start your journey. From there you can find answers to specific questions on subs like this one /r/finanzen and /r/investing and Google searches.

Good luck!

I'm gonna echo what u/StrukkStar said. If you think through your assertion carefully the logic doesn't hold up.

I currently have a similar amount of savings as yourself, but by the logic of your post I should take it all out now, right? The fees to sell with my broker are minimal so there's really nothing holding me back. Literally there is no difference between our situations except inertia. So don't I?

Because the market on average is going up, and I can't predict how it will behave. If teams of quants and high paid executives and high performance machine-learning algorithms looking through reams of data can only get it right 50.001% of the time, then my thinking I can speculate better is pure hubris.

So what do you do? Reduce risk with dollar cost averaging? That is invest a portion of it every month to reduce your timing risk? There's three situations that can happen then:

• 1. The market goes goes down, well you shouldn't have invested then. And so what if you did, you're saving for retirement, in a year or two it will have averaged out.
     
• 2. The market stays the same. Then it makes no difference whether you lump-sum it in or drip-feed it.
     
• 3. The market goes up... well... you missed out on those gains man... and the future gains those gains could have earned you, and the future gains the gains of those gains would have earned you, and so on.
     
     And since the market, on average, always goes up, it's just a bad bet to not be investing your cash.
     
     If I was in your situation, I would confidently put it all immediately into exactly the portfolio I have now, because otherwise I should sell the portfolio I have now. If you want to really lower your risk against say a deflationary economy, then you can throw a portion ~10% in bonds. It won't do much harm.
     
     But honestly, for someone in their 30s in the wealth accumulation phase of their life, you have the luxury to wait out any potential recession. The maths says throw it all into a low-cost well-spread full world stock-market ETF, and hold fast, it will be a bit of a wild ride at times but just don't panic, don't do anything rash, and it will be worth it.
     
     As you get older and closer to retirement (wealth maintenance period) then 30% bonds is a good number. But I'd start with 90%-100% in stocks and hold fast. Do your research if you need to be convinced on the numbers for this. Or read The Simple Path to Wealth by JL Collins (I thought the audiobook was great).
     
     
     Also can I ask you a question: what do you do and what region of the world do you live in? Sounds like the dream.
     
     

>Do you have any recommendation as to where I can start (e.g. reading, websites to compare, etc.)?

the usual suspects:

• Bogleheads wiki - An invaluable free resource. I think it is easier to come here when you have specific topics you have questions about
  
• Bogleheads Guide to Investing - is a good book on general personal finance topics and gives a general overview of investing topics
  
• The Little Book of Common Sense Investing - will show you why low cost index funds are a good idea.
  
• If you can - is a quick free PDF you can read quickly and get the core gist of what passive investing is about. Bernstein is a great writer, he has really good books to in case you are interested.
  
  justETF is a good resource to find ETFs. morningstar is also good.
  
  
  
  >Is there also some more "direct" ways of investing into stocks without picking them yourself?
  
  Easiest when living in Germany would be to get a depot account in a cheap broker. justETF has a comparison of some.
  
  You may also consider DeGiro or InteractiveBrokers.

Well the thing with older cars is that there's never just "one last repair". When things start breaking, there's no end to it. I'm currently wondering about replacing my wife's 2011 Peugeot 508, the only standing cost for it is insurance at about €110/year, but it has cost me about €1800 in repairs in 9 months and I can only see it going downhill from there.

​

On the subject of luxury vehicles - a surefire way to never get rich is to try and look like one from the getgo. Sure it's pointless being 100% frugal in everything and as a young man one must also has a ride the ladies would be interested to ride in. But speaking from experience if I had only known anything about money that 7-series BMW on steamroller wheels I bought at 25yo would have been better off as a decent stock portfolio by now.

​

I suggest reading this book before going into stocks, definitely an eye-opener for me: https://www.amazon.co.uk/gp/product/0743200403/ref=ox_sc_saved_title_1?smid=AR4DC9FBOWIX7&psc=1

​

What are you saving up for? The more money you just bury away, the less profit you see from your investments, as inflation eats it away.

I have just released a dirt cheap Ebook on Amazon that details how to specifically search for ONLY the best penny stock plays and take advantage of zero commissions brokers with small accounts of just $100 or more and grow it tenfold.

The book is cheap and I go into detail in a very simple manner that even beginners understand it well. Feel free to check it out if you think it would be a right fit for you. If not, that's fine too. I'm here to answer any of your newbie related questions free of charge.

My Ebook

I'm pretty much at the same boat with you (same age, Berlin, cash I'm sitting on) but my mortgage is a bit cheaper (1.04% since I made 50% downpayment I guess). So with 4% Tilgung and this 5% yearly payment, it should be paid off in 10 years, however, I'm still considering If will do it or will make this cash perform better when invested.

I currently have around 12% of my cash invested in ETF, the rest sits in my Tagesgeld. I will gradually increase the investment amount, since I only started last month so I'm still kinda learning before going full speed.

I suggest you to spend some time reading about it before going this path. finanztip.de has tons of info but only in German. The Bogleheads' Guide to Investing is a kind of classic book, a bit focused on US realities, but still gives a good overview of different investment instruments and personal finances.

Okay, different beast.

You work in a niche industry and plan to invest in that. While I do believe you might have insights others have not consider the following: IT is hype based and your now profitable niche from which you draw your livelyhood goes bust.

Not only is your company in trouble, other companies that might value your know-how with good pay are in trouble as well ant it's hard to get a foot in the door.

Since you invested your money in the same place your earning potential is impacted as well as your net worth. This is called a concentration risk.

For me personally it would be too risky to invest my savings into something in which I am already heavily invested (with my human capital).

Another perspective: Everything public you know about the companies you want to invest in is already priced in, the stock price reflects the potential and risks adequately. Everything non-public that might move the needle is considered illegal insider information. It does not matter if your friend or your friends friend gave you that information.

I would advise reading up on the reasoning behind passive investing. There are numerous books. If you want to keep a small part of your money in company / industry stock feel free, but you should at least know the tradeoffs.

Since you are asking specifically about Germany, I guess you are able to read in German. These are pretty much the must-read books about investing in Germany:

https://www.amazon.de/Souver%C3%A4n-investieren-Indexfonds-ETFs-Privatanleger/dp/3593504545/ref=sr_1_1?ie=UTF8&qid=1511440718&sr=8-1&keywords=kommer+etf

https://www.amazon.de/Finanzwesir-Verm%C3%B6gensaufbau-Intelligent-finanzielle-Altersvorsorge/dp/3734579813/ref=pd_sim_14_4?_encoding=UTF8&psc=1&refRID=YS4T7NRS0JSY7DDMKGRJ

You need to realize that you have 3 very different problems:

1. Filing taxes on your investments, I don't know how you're filing your taxes now but you may need someone with more expertise in US / Austrian filings once you start investing.
   
   
2. Find an investment platform that's willing to work with you, a lot in Europe aren't willing to do so due to FACTA, but maybe you're willing to open an account in the US.
   
   
3. Actually deciding how to invest. I suggest starting to read something like https://www.amazon.com/Simple-Path-Wealth-financial-independence/dp/1533667926 and going with index funds instead of throwing money at a broker.

Look into BTC, bonds are a joke at the moment.

It really depends which kind of saver/investor you are.

My recommendation is to start from with the bogleheads wiki:

• https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_philosophy
  
  and then read their book:
  
  
• https://www.amazon.co.uk/Bogleheads-Guide-Investing-Taylor-Larimore/dp/1118921283/ref=sr_1_2?s=books&ie=UTF8&qid=1538303189&sr=1-2&keywords=bogleheads+guide+to+investing
  
  you will find the majority of relevant info there. you can worry about the specifics later.

As this goes deeply into german tax and social insurance for a german OP I will answer in german. If somebody needs a translation in english, feel free to hit me up with what google translate left unclear.

Servus!

Bist du Schüler oder Student und so über deine Eltern in der Krankenversicherung (gesetzlich oder privat) familienversichert? Dies solltest du unbedingt klären, da ein 450 € Job dir keine Krankenversicherung beschert, dies ist erst ab einem Einkommen von 451 € der Fall! Ich gehe im Folgenden davon aus, dass du Schüler bist und über deine Eltern familienversichert bist, oder als Student eine eigene Krankenversicherung im Studententarif unterhältst.

Zuerst zur Sozialversicherung.

Im Minijob (450 € Job) hast du alle Rechte wie ein "regulärer"/Vollzeitangestellter auch, bis auf die Ausnahme der Krankenversicherung. Von deinem Gehalt werden allerdings (mit einer Ausnahme, siehe gleich Rentenversicherung) keine Beiträge einbehalten, diese trägt der Arbeitgeber allein. Von deinem Gehalt werden 3,7 % für die gesetzliche Rentenversicherung einbehalten, die anderen 11,3 % bezahlt dein Chef. Du hast die Möglichkeit, dich in deinem Minijob von der Rentenversicherungspflicht befreien zu lassen, dann sparst du dir 3,7 % Abzug und 15 % gehen nicht auf dein Rentenkonto und dein Zeitkonto füllt sich nicht. Generell wäre dies ein schlechter Tip.

Hast du eine selbständige Nebentätigkeit neben Schule oder Beruf musst du hierfür keine Beiträge zahlen. Als Selbständiger bist du in der Regel nicht versicherungspflichtig in der Rentenversicherung, Ausnahmen siehe SGB VI § 2 Nr. 9, beachte das "und" zwischen lit. a und b. Für den Anfang macht es in der Regel Sinn, sich für die Dauer von 3 Jahren als Existenzgründer befreien zu lassen. So hat man keine Probleme, wenn man z. B. am Anfang das Gros der Aufträge von nur einem Auftraggeber erhält.

Krankenversicherungsbeiträge fallen ferner nicht an, solange die Selbständigkeit wirklich nur als Nebentätigkeit ausgeübt wird, also sowohl vom Gewinn, als auch vom zeitlichen Einsatz eine untergeordnete Rolle gegenüber der Haupttätigkeit (Schule, Universität) einnimmt.

Zu den Steuern

Das Einkommen aus dem Minijob wird pauschal besteuert. Die Steuer wird vom Arbeitgeber getragen und von diesem an die Minijobzentrale abgeführt. Der Minijob muss also für eine solche steuerliche Situation nicht weiter betrachtet werden.

In der Regel läuft die Besteuerung des Arbeitseinkommens so ab, dass von deinem Bruttogehalt die Steuern (Einkommenssteuer, Solidaritätszuschlag, ggf. Kirchensteuer) abgezogen und direkt vom Arbeitgeber an das Finanzamt abgeführt werden. In Steuerklasse 1 wird dabei so viel einbehalten, dass du keine Steuerschuld mehr gegenüber dem Fiskus hast. Das "Problem" ist hier, dass in der Regel zuviel einbehalten wird. Durch das Absetzen gewisser Kosten bekommt man in der Regel Geld vom Staat zurück, wenn man die Steuererklärung einreicht, was man auch bitte tun sollte ;-)

Als Selbständiger generierst du Einnahmen und hast Ausgaben, die du tätigen musst, um deine Einnahmen generieren zu können. Hier wird nicht das Einkommen (der Umsatz) als Bewertungsgrundlage heran gezogen, sondern der Gewinn, also Einnahmen minus Ausgaben. Bis du jährlich 500.000 € Umsatz oder 50.000 € Gewinn generierst, musst du nicht bilanzieren, solange reicht eine Einnahmenüberschussrechnung. Das Formular EÜR heftest du an deine Steuerklärung an, reichst es pünktlich (31.5. des Folgejahres) ein und bekommst einen Bescheid, auf dem steht, wieviele Steuern du zahlen musst. Da ich jetzt schon zwei mal die Steuererklärung angesprochen habe: Es gibt sehr gute Programme, mit denen man die Steuerklärung, auch für Gewerbebetriebe, einfach durchführen kann. Ich empfehle "tax" von Buhl ("tax 2016" für das Steuerjahr 2015).

Weiterhin muss man mit einer Selbständigkeit in der Regel die Mehrwertsteuer (Umsatzsteuer) beachten. Solange man unter 17.501 € umsatzsteuerpflichte Umsätze (nicht Gewinn) erzielt, kann man sich als Kleinunternehmer von der Umsatzsteuerpflicht befreien lassen. Man kann dann allerdings auch keine Vorsteuer abziehen, sodass hier immer eine Einzelfallbetrachtung angeraten ist!

Zu deinem Fall: Wie /u/enter-username schon geschrieben hat, wirst du keine Steuern zahlen müssen, da deine steuerpflichtigen Einnahmen unter dem Grundfreibetrag liegen. Trotzdem musst du für deine Tätigkeit beim Gewerbeamt ein Gewerbe anmelden! Auch musst du den "Fragebogen zur steuerlichen Erfassung" den du kurz danach vom Finanzamt zugeschickt bekommst ausfüllen. Hier solltest du aufpassen, was du schreibst und nicht übertrieben hoch oder niedrig schätzen, da dies Auswirkung auf das weitere Verfahren des Finanzamtes hat. Außerdem bist du als Gewerbetreibender grundsätzlich verpflichtet, eine Steuererklärung einzureichen, selbst wenn du keine oder nur wenige Umsätze hast. Und du bist verpflichtet, ordnungsgemäß Buch zu führen, für eine Einnahmenüberschussrechnung reicht eine Excel-Tabelle aber voll aus. Beachte jedoch, dass du für jede Ausgabe den Beleg sauber abheften musst.

Ich hoffe, ich konnte mit diesen allgemeinen Rahmeninformationen helfen. Gerne beantworte ich auch weitere Fragen.

Wenn du mehr über das Thema Steuern als Jungunternehmer erfahren möchtest, kann ich das Buch Steuern, aber lustig empfehlen.