Ab wann wird dein ETF zum "Selbstläufer" (ohne weiter einzahlen zu müssen)?

Summary

In this video, Markus from finanzwus explores when one's wealth can grow independently without further savings. Assuming a 7% annual return, he analyzes a 40-year savings period, highlighting the power of compound interest. He discusses milestones like when savings rate becomes negligible compared to wealth growth and suggests using the 4% rule for retirement withdrawals. The video also addresses the risks of stopping savings early and the importance of considering individual factors like life expectancy and the value of present vs. future money when making financial decisions.

Takeaways

• 💹 The video discusses the concept of wealth growing on its own through compound interest, assuming a 7% annual return on investment.
• 🌱 It illustrates that wealth growth is not just about saving, but also about the power of compound interest over a 40-year period, such as saving from the age of 27 to 67.
• 📈 The script explains the exponential growth of wealth due to the compound interest effect, where the wealth increases faster over time, and the importance of the savings rate diminishes.
• 💰 By the 40th year, the savings rate of €1800 per year represents only about 0.5% of the total wealth, highlighting the diminishing impact of the savings rate over time.
• 🤔 The video raises the question of when one could stop saving, as the wealth continues to grow on its own, and discusses potential reasons for stopping, such as funding a property or reducing work hours.
• 🏘️ It introduces the concept of the '4% rule' for retirement withdrawals, suggesting a more conservative 3.5% rule to ensure the wealth lasts for at least 30 years.
• 🔢 The '72 rule' is presented as a way to estimate how long it will take for wealth to double through compound interest, which is approximately every 10 years at a 7% annual return.
• 🚫 The script warns of the risks associated with stopping savings, as future returns are uncertain and market volatility can affect the final wealth amount.
• 📊 The video provides a table to show the percentage of the target wealth one should have saved by certain years before retirement if considering stopping savings.
• 💡 It concludes with a financial thought experiment comparing the value of money today versus in the future, considering the time value of money and individual factors such as life expectancy and immediate financial needs.

Q & A

What does it mean for wealth to grow on its own?

For wealth to grow on its own, one needs to earn a return on investment. In the script, it's assumed that the return is 7% annually, which is used to illustrate the concept of compound interest where the wealth grows exponentially over time.

What is the significance of compound interest in wealth growth?

Compound interest is crucial as it allows the interest earned to be reinvested, thus generating more interest. This snowball effect is what leads to exponential growth of wealth, making the savings rate less significant over time.

At what point does the return on investment (ROI) start to significantly contribute to wealth growth?

In the script, it's mentioned that after the sixth year of saving, the ROI starts to become noticeable, contributing 50% of the annual savings rate. This is when the compounding effect begins to significantly support wealth accumulation.

What is the implication of the statement 'the earlier you stop saving, the less wealth you will have at the end'?

This statement emphasizes that the longer one saves, the more wealth they will accumulate due to the power of compound interest. Stopping savings early means missing out on the potential for significant wealth growth.

What is the '72 rule' mentioned in the script, and how does it relate to wealth growth?

The '72 rule' is a way to estimate how many years it will take for an investment to double, given a fixed annual rate of return. By dividing 72 by the return rate, one can estimate the doubling period. In the script, with a 7% return, it's approximately every 10 years.

Why might someone consider stopping their savings at a certain point?

The script suggests that one might consider stopping savings if they have reached a significant portion of their financial goal, or if they want to use the money for other purposes such as buying a property, reducing work hours, or financing their children's education.

What is the '4% rule' in retirement planning, as referenced in the script?

The '4% rule' is a strategy where a retiree can withdraw 4% of their portfolio value in the first year of retirement and adjust it for inflation each year thereafter. This is expected to ensure that the portfolio lasts for at least 30 years.

How does the script suggest one should consider the trade-off between current and future consumption?

The script proposes a thought experiment where one must decide between receiving a certain amount today or in the future. It suggests considering the present value of future payments and comparing it to the value of current savings to make an informed decision.

What is the importance of considering one's life expectancy when deciding to stop saving?

The script highlights that if one expects to live longer, it's beneficial to continue saving to ensure a larger future wealth that can be utilized. Conversely, if life expectancy is shorter, focusing on current consumption might be more appealing.

What are the risks associated with stopping savings early, as discussed in the script?

The script points out that the risk associated with stopping savings early is that the actual returns may not meet expectations, and there's uncertainty about future needs and market conditions, which could lead to not having enough wealth at retirement.

How does the script address the concept of 'bar value' in the context of deciding whether to stop saving?

The script introduces the concept of 'bar value' to compare the present value of future savings with the present value of additional income that could be gained by continuing to save. This comparison helps in deciding whether it's financially beneficial to stop saving.