How many people invest their money

World Savings Day 2020: That's how much money Germans save and invest

If you don't want to worry later, you have to take precautions. But what amounts are Germans actually saving? How do you invest your money? And how many euros would you need to live a carefree life?

The Germans have never been so rich in the past few months. According to calculations by the Bundesbank, the financial assets of private households rose to around 6,630 billion euros in the second quarter of 2020 - a record. But how exactly does this amount come about?

The online opinion research company Yougov took a closer look at the savings and investment behavior of Germans. On behalf of the payment service provider Klarna, it determined, among other things, how much the Germans put aside in the past year, where the money went, what consequences the corona pandemic has for the savings rate and from how much money per month Germans can sleep peacefully.

Germans saved an average of almost 6,300 euros in 2019

According to this, Germans saved an average of 6,297 euros in 2019, with men putting aside more at 6,773 euros than women who came to 5,672 euros. One reason for the difference is probably the so-called gender pay gap, i.e. the fact that men earn more than women over their entire life.

According to the survey, 35 to 44-year-olds are able to make the greatest savings. While they managed to make 7,204 euros, people between the ages of 25 and 34 got an average of 6,302 euros, 16 to 24-year-olds got 3,525 euros.

In this study, saving means investing money for the future - not just not spending money, but also investing profitably, for example in stocks.

Corona crisis is likely to cause the savings rate to rise to a record level

Young people in particular are not yet concerned with retirement provision. More than half of the 16- to 24-year-old respondents (54 percent) stated that they still had time to make provisions for old age. In general, three quarters of Germans think saving is the best way to secure themselves financially.

The corona pandemic has apparently increased the need for security. 56 percent of those surveyed state that they became more economical during the crisis. This trend is also confirmed by figures from the Federal Association of German Volksbanks and Raiffeisenbanks. This assumes that the savings rate will rise to a record level of around 15 percent in the current year.

Private households would save around 15 euros for every 100 euros in disposable income. According to data from the Federal Statistical Office, the highest savings rates to date in Germany were measured in 1991 and 1992 at 12.9 percent each. In 2019 it was 10.9 percent.

But where exactly does the saved money end up?

Young Germans are still clinging to the savings account

Despite the extremely low interest rates, more than half of Germans use either the overnight money account (28 percent) or the savings book (26 percent) to hoard money. Among the respondents up to the age of 24, the savings account is even the most common form of financial investment (34 percent).

As before, Germany is not necessarily the country of the shareholders, because only 15 percent of the nationwide respondents stated that they had invested part of their money in shares in the past year. There are convenient and comparatively inexpensive ways to get involved in the stock market.

Beginners can do nothing wrong with a long-term investment in an index fund, or ETF for short. These are special funds in which a computer algorithm maps a stock index such as the Dax or the international MSCI World. An ETF always performs almost exactly like the index it tracks.

How much money you should invest regularly in order to benefit from the returns in the long term depends heavily on how much you need for a carefree life. According to the survey, Germans need 2,527 euros a month to live a carefree life. Women (2,494 euros) gave almost the same value as men (2,559 euros).

About the method:
On behalf of Klarna, the opinion research company Yougov asked more than 1,000 people across Germany about their behavior and attitudes towards saving in a representative online survey in September. The survey covered all 16 federal states, was aimed equally at men and women and reached people aged 16 to 45 and older. In order to compensate for extreme values, 1 percent of the highest and lowest values ​​were not included in the analysis for individual questions.