Capital Investment on 1 Sheet of A4 Paper

Without preparation, straight off the cuff, capital investment on a single A4 sheet.

Recorded spontaneously! With this spontaneous mini workshop, I wanted to show an employee how an investment decision is made in its most basic form: location, yield, financing.

1. Location: A, B, and C – Which Fits You?

The location of a property is a decisive factor for your investment success. Let’s explore the three common location types you should know:

A-Location: Expensive, but Profitable

The A-location stands for prime locations. Here, properties often carry a hefty price tag, but they typically offer excellent long-term appreciation. Demand in these areas is high, and if you invest in an A-location, you can benefit from rising property prices and rental income. Think of sought-after inner-city areas or highly popular residential neighborhoods.

C-Location: Cheap, but Risky

The C-location represents low-cost properties, often located in less developed or challenging areas. The entry price may be temptingly low, but C-locations typically carry higher risks. Vacancies, low rental income, and loss of value are potential challenges. Investments in C-locations often require extensive renovations and a high level of commitment.

B-Location – The Perfect Compromise

The B-location is the gold standard for many investors. Here you’ll find a combination of reasonable prices and promising long-term profit prospects. B-locations are often found in neighborhoods that are still developing but already show a certain charm and potential. If you’re looking for the ideal balance between risk and return, the B-location could be the right choice for your entry into capital investment.

I also have a video on location for you:

• Real Estate Location: Explainer Video

2. Yield: How Much Is Enough?

Yield is a key factor in evaluating your real estate investment. You should constantly ask yourself:

“What yield do I need, and what can I expect from my property?”

Calculating the Yield

To determine the yield, you add up all income from your property (rental income, tax benefits, etc.) and subtract all expenses (mortgage payments, maintenance costs, insurance, etc.). You then divide the result by your initial investment amount (including all costs for the purchase and renovation). This yield should meet your expectations and be profitable in the long term.

• Yield Calculator
• How High Should the Yield Be: Explainer Video

3. Investment Decision: Calculate Everything from Your Desk

An exciting aspect of real estate investing is that you can make many decisions comfortably from your desk. You don’t have to be on site to assess a property’s potential. Here are some important steps for your investment decision:

Market Research: Finding the Rental Price

Use tools and software to analyze your financial situation. Calculate your yield expectations and the anticipated costs. You don’t need expensive tools for this — use real estate portals, as shown in the video, to research current asking prices within seconds.

4. Financing: Understanding the Details

Financing your capital investment is another crucial aspect. Here are some factors you should consider:

Equity: As Little as Possible

The amount of equity you bring into your investment affects your financing options and your yield. The more equity you have, the less you depend on borrowed capital.

As an investor, you want to keep as much liquidity as possible, which is why you finance with as little equity as possible.

Appreciation: Over Time

Real estate has the potential to gain value over time. This can be an important factor for your long-term yield.

Inflation: Working in Your Favor

The effects of inflation should also be considered. Inflation can erode the purchasing power of your rental income over time, so it’s important to factor this into your calculations.

Overall, the four fundamentals of capital investment and investment decision-making — location, yield, investment decision, and financing — are crucial to your success as a real estate investor. By understanding and carefully weighing these aspects, you can make better decisions and invest successfully in your investment portfolio.

Real estate loans: Quickly explained

Those who are looking for tips for follow-up financing can skip this small section! Who wants to finance his first property, whether house or apartment, once again quickly explained:

What does annuity / credit installment mean?

Annuity / loan installment – The technical term “annuity” is your annual repayment to the bank, for a real estate loan. This consists firstly of the repayment (loan repayment) and the interest (cost of your loan). If the interest increases, your monthly loan installment, or annual annuity, increases.

Quickly explained:

• Annuity – Annual sum from repayment and interest
• Loan installment – Monthly payment (repayment and interest)

What does repayment mean? – Loan repayment

Repayment (repayment of the loan) – The term repayment refers to your loan repayment. With each repayment, the remaining debt decreases and so does the interest.

Tip. Digression – As a real estate owner with financing, you don’t think inflation is so bad. Why?

Typical are (were) 2% repayments per year. With these 2% you finance your real estate over 30 years (every year 2%) and use accordingly also the advantages, which result for you from the inflation (money depreciation). Because 1,000 euros today, are “no longer the same” with 3%, 4% or even 5% inflation in 10 years. Meanwhile, your property value has increased and so has your rental income. Read more about real estate & inflation here.

What does interest mean? – Credit cost

Interest (cost of credit) – Interest is the cost, so to speak, that you pay for borrowing. The basis for the monthly or annual interest costs is the amount of your remaining debt.

In the last 10 years, 15 years, people were mostly counting on interest rates of 2%. That is changing now, because interest rates are rising.

The higher the interest rate, the higher your monthly costs will be

What impact the coming interest rate increases will have on your assets, you can see in a moment in the calculation.

High inflation, rising interest rates: tips for your loan

Tips from my article: High inflation, rising interest rates, what to do? on immobilien-erfahrung.de

High inflation, rising interest rates, for most this is new!

There has been no increase in the key interest rate by the ECB since 2011. This new situation challenges homebuilders and capital investors and forces new ways of thinking. Let’s summarize the tips once again:

New real estate loan: do not wait long

You should close your loan as soon as possible and as long as possible, that’s the best tip we can give you in times of interest rate turnaround.

Interest rates will rise and the best way to protect yourself from the rate hike, after all you will be paying back the loan for decades, is to take out a loan quickly. Your loan should also run as long as possible, so that you can take advantage of the still favorable interest rates, as long as possible.

You want to buy promptly? Then:

• Complete as soon as possible
• Conclude as long term as possible

If it is no longer about your first real estate financing, but about the upcoming follow-up financing, I can recommend the following:

Follow-up financing in 1+ years: Forward loan

By means of “forward loans”, you can take the current interest rates today, for your follow-up financing in 1, 2 years.

That’s my tip when it comes time to refinance your home or condo.

You have never heard of a forward loan? Then here quickly explained.

Forward loan = conclude early, secure current interest rates

Forward loan – A forward loan is a typical annuity loan, the only difference is that you take it out one or two years before the end of the current financing. The costs are slightly higher, but you already have the (even more favorable) interest rate fixed now. If the interest rates in two years, than so significantly higher, your follow-up financing will start with the interest rate applicable today.

Follow-up financing in 5+ years: Short term

Unfortunately, a forward loan is only possible in a certain period, should your follow-up financing as first in five, six or seven years, this tip will help them for the current interest rate situation!

Short-term follow-up financing (only 1, 2-year term) and wait for interest rate development.

Typically, you would take out your financing with a fixed debit interest rate, which is as long as possible. Now we are on a low interest rate phase, accordingly it can only go up, especially when looking at the current inflation.

Accordingly, you should only plan your follow-up financing with a short-term term, so that you can react to interest rate changes. If the interest rate then goes down again, you can take advantage of this in your further follow-up financing.

These were the most important tips for buying a house, apartment in times of rising interest rates. Likewise, for those who have already bought your house or apartment and soon have to tackle the follow-up financing.

With these three tips, you can minimize the risks to you and your real estate investment.

Let’s get practical now:

What will a 1%, 2% interest rate change cost you?

Loan example 100.000 Euro for house & apartment

What does an interest rate change mean for your wallet?

Here are two more practical examples with an interest rate change of 1% and 2%, perspective on the coming years. To keep the example calculation simple, we use a financing volume of 100,000 euros. What is the impact of the interest rate change of only 1%, in the first year of your financing?

Credit at 2% (current): 4,000 euros / year

Step 1: Consider borrowing today, with 2% repayment rate us interest rate.

Credit Today:

• Credit: 100.000 Euro
• Repayment (2%): 2,000 euros / year
• Interest (2%): 2,000 euros / year
• Annuity (total amount / year): 4.000 Euro

Credit 2023 (3% / +1% increase): 5,000 euros / year

Let’s speculate that the interest rate increase in 2023 will go up to one percent. This would quickly change your yield calculation, because the costs are rising.

Talk about cost increases! Have you heard about the property tax reform? Since 2022, landowners in Germany have been written to and asked to submit new data to the tax office. The goal is to reform the property tax calculation, because it is based on data that is more than 50 years old. Read more about the 2025 property tax reform here.

Now back to increasing your interest costs, which will be incurred in the first year and (depending on the remaining debt) in subsequent years.

2023 Credit (Adopted):

• Credit: 100.000 Euro
• Repayment (2%): 2,000 euros / year
• Interest (3%): 3,000 euros / year
• Annuity (total amount / year): 5,000 euros

Conclusion at 1% interest rate increase to 100,000 euro loan:

With only 1% interest rate increase, your costs will directly increase by + 1,000 euros, in the first year alone.

Interest is calculated annually! Follow-up costs

The effect repeats itself in each subsequent year, paying one percent more interest. This means that if you pay off your first 2,000 euros in the first year of your financing (100,000 euros), you will still have 98,000 euros in remaining debt. Accordingly, in the second year you also pay 980 euros more interest to your bank than before.

• Year 1 + 1.000 Euro
• Year 2 + 980 Euro
• ..

Accordingly, 1% interest rate increase alone, in the first two years of financing, means additional costs of 1,980 euros.

Credit 2024 (4% / +2% increase) – 6,000 euros / year

What would happen if the interest rates on your real estate financing increased by 2%? Let’s take a look at this example: If interest rates were to rise by 2% in 2024.

2024 Credit (Adopted):

• Credit: 100.000 Euro
• Repayment (2%): 2,000 euros / year
• Interest (4%): 4,000 euros / year
• Annuity (total amount / year): 6.000 Euro

Conclusion +2% increase:

With only 2% interest rate increase, your costs will directly increase by + 2,000 euros, in the first year alone.

Credit example 500.000 Euro for house & apartment

100,000 euros is not a financing basis for a property in most cities, especially the A-locations and B-locations, where the financing sum is usually much higher. Therefore, here again exemplary the additional interest costs calculated, with a loan amount of 500,000 euros.

Credit at 2% (current): 20,000 euros / year

First of all, let’s look again at the basis, the real estate financing with 500,000 euros at the current interest rate level, of about 2% for the initial financing.

Credit Today:

• Credit: 500.000 Euro
• Repayment (2%): 10,000 euros / year
• Interest (2%): 10,000 euros / year
• Annuity (total amount / year): 20.000 Euro

Credit 2023 (3% / +1% increase): 25,000 euros / year

If the interest rate rises by just 1%, this directly means more costs of 5,000 euros per year for you. Shown here in the example for the year 2023.

2023 Credit (Adopted):

• Credit: 500.000 Euro
• Repayment (2%): 10,000 euros / year
• Interest (3%): 15,000 euros / year
• Annuity (total amount / year): 25.000 Euro

Conclusion at 1% interest rate increase to 500,000 Euro loan:

With only 1% interest rate increase, your costs will directly increase by + 5,000 euros, in the first year alone.

Credit 2024 (4% / +2% increase) – 30,000 euros / year

The interest rate increase of 1% alone provides 5,000 euros of additional costs that you have in the first year of your real estate financing. If interest rates rise by 2%, the additional costs increase to 10,000 euros in the first year of your real estate financing.

Again, if €10,000 is repaid in the first year at the regular repayment rate of 2%, this leaves €490,000 in remaining debt. Accordingly, €9,800 in additional costs and a full €19,800 after just two years.

2024 Credit (Adopted):

• Credit: 500.000 Euro
• Repayment (2%): 10,000 euros / year
• Interest (4%): 20,000 euros / year
• Annuity (total amount / year): 30.000 Euro

Conclusion +2% increase:

With only 2% interest rate increase, your costs will directly increase by + 10,000 euros, in the first year alone.

Real estate loans: Quickly explained

Those who are looking for tips for follow-up financing can skip this small section! Who wants to finance his first property, whether house or apartment, once again quickly explained:

What does annuity / credit installment mean?

Annuity / loan installment – The technical term “annuity” is your annual repayment to the bank, for a real estate loan. This consists firstly of the repayment (loan repayment) and the interest (cost of your loan). If the interest increases, your monthly loan installment, or annual annuity, increases.

Quickly explained:

• Annuity – Annual sum from repayment and interest
• Loan installment – Monthly payment (repayment and interest)

What does repayment mean? – Loan repayment

Repayment (repayment of the loan) – The term repayment refers to your loan repayment. With each repayment, the remaining debt decreases and so does the interest.

Tip. Digression – As a real estate owner with financing, you don’t think inflation is so bad. Why?

Typical are (were) 2% repayments per year. With these 2% you finance your real estate over 30 years (every year 2%) and use accordingly also the advantages, which result for you from the inflation (money depreciation). Because 1,000 euros today, are “no longer the same” with 3%, 4% or even 5% inflation in 10 years. Meanwhile, your property value has increased and so has your rental income. Read more about real estate & inflation here.

What does interest mean? – Credit cost

Interest (cost of credit) – Interest is the cost, so to speak, that you pay for borrowing. The basis for the monthly or annual interest costs is the amount of your remaining debt.

In the last 10 years, 15 years, people were mostly counting on interest rates of 2%. That is changing now, because interest rates are rising.

The higher the interest rate, the higher your monthly costs will be

What impact the coming interest rate increases will have on your assets, you can see in a moment in the calculation.

High inflation, rising interest rates: tips for your loan

Tips from my article: High inflation, rising interest rates, what to do? on Real Estate experience.de

High inflation, rising interest rates, for most this is new!

There has been no increase in the key interest rate by the ECB since 2011. This new situation challenges homebuilders and capital investors and forces new ways of thinking. Let’s summarize the tips once again:

New real estate loan: do not wait long

REPEAT (Attempt 3). The previous attempt was faulty. The previous attempt returned the German text unchanged. That is the worst error. Translate EVERY sentence completely into the English language. No German sentence may remain. Proper nouns, brands, and established technical terms remain unchanged, everything else not.

You should close your loan as soon as possible and as long as possible, that’s the best tip we can give you in times of interest rate turnaround.

Interest rates will rise and the best way to protect yourself from the rate hike, after all you will be paying back the loan for decades, is to take out a loan quickly. Your loan should also run as long as possible, so that you can take advantage of the still favorable interest rates, as long as possible.

You want to buy promptly? Then:

• Complete as soon as possible
• Conclude as long term as possible

If it is no longer about your first real estate financing, but about the upcoming follow-up financing, I can recommend the following:

Follow-up financing in 1+ years: Forward loan

By means of “forward loans”, you can take the current interest rates today, for your follow-up financing in 1, 2 years.

That’s my tip when it comes time to refinance your home or condo.

You have never heard of a forward loan? Then here quickly explained.

Forward loan = conclude early, secure current interest rates

Forward loan – A forward loan is a typical annuity loan, the only difference is that you take it out one or two years before the end of the current financing. The costs are slightly higher, but you already have the (even more favorable) interest rate fixed now. If the interest rates in two years are significantly higher, your follow-up financing will start with the interest rate applicable today.

Follow-up financing in 5+ years: Short term

Unfortunately, a forward loan is only possible in a certain period, should your follow-up financing be first in five, six or seven years, this tip will help you with the current interest rate situation!

Short-term follow-up financing (only 1, 2-year term) and wait for interest rate development.

Typically, you would take out your financing with a fixed debit interest rate, which should be as long as possible. Now we are in a low interest rate phase, so it can only go up, especially when looking at the current inflation.

Accordingly, you should only plan your follow-up financing with a short-term term, so that you can react to interest rate changes. If the interest rate then goes down again, you can take advantage of this in your further follow-up financing.

These were the most important tips for buying a house, apartment in times of rising interest rates. Likewise, for those who have already bought your house or apartment and soon have to tackle the follow-up financing.

With these three tips, you can minimize the risks to you and your real estate investment.

Let’s get practical now:

What will a 1%, 2% interest rate change cost you?

Loan example 100.000 Euro for house & apartment

What does an interest rate change mean for your wallet?

Here are two more practical examples with an interest rate change of 1% and 2%, perspective on the coming years. To keep the example calculation simple, we use a financing volume of 100,000 euros. What is the impact of the interest rate change of only 1%, in the first year of your financing?

Credit at 2% (current): 4,000 euros / year

Step 1: Consider borrowing today, with 2% repayment rate as interest rate.

Credit Today:

• Credit: 100.000 Euro
• Repayment (2%): 2,000 euros / year
• Interest (2%): 2,000 euros / year
• Annuity (total amount / year): 4.000 Euro

Credit 2023 (3% / +1% increase): 5,000 euros / year

Let’s speculate that the interest rate increase in 2023 will go up to one percent. This would quickly change your yield calculation, because the costs are rising.

Talk about cost increases! Have you heard about the property tax reform? Since 2022, landowners in Germany have been written to and asked to submit new data to the tax office. The goal is to reform the property tax calculation, because it is based on data that is more than 50 years old. Read more about the 2025 property tax reform here.

REPEAT (Attempt 3). The previous attempt was incorrect. The previous attempt returned the German text unchanged. This is the most serious error. Translate EVERY sentence completely into the English language. No German sentence may remain.

Now back to increasing your interest costs, which will be incurred in the first year and (depending on the remaining debt) in subsequent years.

2023 Credit (Adopted):

• Credit: 100.000 Euro
• Repayment (2%): 2,000 euros / year
• Interest (3%): 3,000 euros / year
• Annuity (total amount / year): 5,000 euros

Conclusion at 1% interest rate increase to 100,000 euro loan:

With only 1% interest rate increase, your costs will directly increase by + 1,000 euros, in the first year alone.

Interest is calculated annually! Follow-up costs

The effect repeats itself in each subsequent year, paying one percent more interest. This means that if you pay off your first 2,000 euros in the first year of your financing (100,000 euros), you will still have 98,000 euros in remaining debt. Accordingly, in the second year you also pay 980 euros more interest to your bank than before.

• Year 1 + 1.000 Euro
• Year 2 + 980 Euro
• ..

Accordingly, a 1% increase in the interest rate alone, in the first two years of financing, means additional costs of 1,980 euros.

Credit 2024 (4% / +2% increase) – 6,000 euros / year

What would happen if the interest rates on your real estate financing increased by 2%? Let’s take a look at this example: If interest rates were to rise by 2% in 2024.

2024 Credit (Adopted):

• Credit: 100,000 euros
• Repayment (2%): 2,000 euros / year
• Interest (4%): 4,000 euros / year
• Annuity (total amount / year): 6,000 euros

Conclusion +2% increase:

With only a 2% increase in the interest rate, your costs will directly increase by + 2,000 euros, in the first year alone.

Credit example 500,000 euros for house & apartment

100.000 euros is not a financing basis for a property in most cities, especially the A-locations and B-locations, where the financing sum is usually much higher. Therefore, here again exemplary the additional interest costs calculated, with a loan amount of 500,000 euros.

Credit at 2% (current): 20,000 euros / year

First of all, let’s look again at the basis, the real estate financing with 500,000 euros at the current interest rate level, of about 2% for the initial financing.

Credit Today:

• Credit: 500.000 Euro
• Repayment (2%): 10,000 euros / year
• Interest (2%): 10,000 euros / year
• Annuity (total amount / year): 20.000 Euro

Credit 2023 (3% / +1% increase): 25,000 euros / year

If the interest rate rises by just 1%, this directly means more costs of 5,000 euros per year for you. Shown here in the example for the year 2023.

2023 Credit (Adopted):

• Credit: 500,000 euros
• Repayment (2%): 10,000 euros / year
• Interest (3%): 15,000 euros / year
• Annuity (total amount / year): 25,000 euros

Conclusion at 1% interest rate increase to 500,000 euros loan:

With only 1% interest rate increase, your costs will directly increase by + 5,000 euros, in the first year alone.

Credit 2024 (4% / +2% increase) – 30,000 euros / year

The interest rate increase of 1% alone provides 5,000 euros of additional costs that you have in the first year of your real estate financing. If interest rates rise by 2%, the additional costs increase to 10,000 euros in the first year of your real estate financing.

Again, if €10,000 is repaid in the first year at the regular repayment rate of 2%, this leaves €490,000 in remaining debt. Accordingly, €9,800 in additional costs and a full €19,800 after just two years.

2024 Credit (Adopted):

• Credit: 500,000 euros
• Repayment (2%): 10,000 euros / year
• Interest (4%): 20,000 euros / year
• Annuity (total amount / year): 30,000 euros

Conclusion +2% increase:

With only a 2% increase in the interest rate, your costs will directly increase by +10,000 euros in the first year alone.

New! Especially for real estate buyers

Buying real estate from A-Z: preparation, search criteria, buying process and all that, free of charge and online, from experts.

Now on real estate-experience.com

Buying an apartment, buying a house, owner-occupation or capital investment, yield or investment property? On my new project Immobilien-Erfahrung.de you will now find everything you need to know for your successful real estate purchase! Learn everything you need to know about setting goals when buying real estate, location types(A-, B- and C-locations), real estate types, their yields and … all online and free of charge! Invest in real estate and build wealth even during inflation. Now on Immobilien-Erfahrung.de:

• Real estate: wealth accumulation despite inflation

Real estate as an investment or savings account & Co.

Not only is the property itself considered a secure protection against inflation, but this also has a positive effect on the financing. The assumption that you have to save money in order to build up assets is therefore not entirely correct. On the contrary, if you invest conscientiously, inflation can actually play right into your hands.

Traditional investments in the face of inflation

Let’s take the classic savings book as an example. Here, you regularly deposit money to save it. Whether it’s for your pension, future investments, travel plans or the education of your children. If you have paid in 10,000 euros, for example, that sounds good at first. But what happens in the event of inflation? The money is devalued. Product prices rise. Life becomes more expensive. The 10,000 euros still remain in your savings account, but they are now worth less.

Savings account – If you had put the 10,000 in a savings account, you would still have 10,000.

The savings book as a classic investment may be safe, but you will actually lose capital in the event of inflation. Even the well-intentioned interest from the bank no longer makes much difference. The situation is completely different with real estate as a capital investment.

Invest in real estate: Advantages

Even in times of crisis, real estate is considered a safe investment. Its value is stable in the face of inflation, and even your loan can be positively affected by a depreciation in value. You can sell your property later for twice its value. If you have invested in an increase in the value of your property, for example through renovation and refurbishment, you can increase the selling price of your house or apartment even more!

Property – If you had bought a property for 10,000, in the example, you would later sell it for 20,000.

So here is a sample calculation:

• Buy property (today): 65,000 euros (~15% equity = your 10,000)
• Sell property (later): 130,000 euros

Loans: Fast and efficient repayment

With inflation, money is devalued. The value of your property increases steadily. With regard to financing, things are now getting exciting:

What happens to your loan?

So let’s stay with the example of the 10,000 euros. If you have taken out the loan today, it will still be 10,000 euros later. After all, we now know: The amount of money always remains the same.

Let us now assume that you have rented out your property in order to generate passive income. Due to inflation, you now receive more rent and continue to pay your installments:

• 2020 = 350 Euro rent / repayment 300 Euro
• 2035 = 460 Euro rent / repayment 300 Euro

Conclusion: Minimizing inflation risk

So you see: In contrast to traditional financial investments, real estate offers you some advantages that savings books, Riester pensions & Co. simply cannot promise. While your invested money loses value there, you can generate even more money with real estate as an investment in times of crisis. Your loan will also be repaid more quickly, especially if your rental income increases.

What is inflation?

Inflation and real estate financing in combination are an extremely interesting and important topic for money investors!

What is inflation?

Explained very simply: in 30 years, the money may only be worth half as much.

For 10,000 euros you get 10 tons of wood today, for example. In 30 years you will only get 5 tons of wood for 10,000. Because your money is only worth half as much.

It’s simple:

Conventional investment: savings book

If you have invested 10,000 euros, then in 30 years you will “still” have about 10,000 + X (interest / price increases). The basis is and has always been your invested money.

• Today: 10.000 Euro
• In 30 years (example): 10,000 euros + X (interest / price increases)

These include savings books, endowment insurance, Riester savings & Co.

Real estate as an investment: comparison

New starting situation, same development, in 30 years the money is only worth half as much. This time, however, you have invested in a property. While the “saver” has his 10,000 euros + X, you have invested in a property. On the one hand, you have benefited from the return (rent) for 30 years and now you can sell your property for 20,000 euros + X (appreciation).

• Today: 10.000 Euro
• In 30 years (example): 20,000 euros + X (increase in value)

Inflation, your best friend as an owner with loans

The property is now “worth twice as much money” (i.e. 20,000), but you are still paying off your original sum (i.e. 10,000 euros).

Another advantage for capital investors, also the amount of money of the rent payment increases. If your tenant pays 300 euros a month now, it will be 600 euros a month later.

Why inflation (as a borrower) is your best friend?

Your loan is going down due to inflation!

Survey: The safest form of investment in the face of inflation?

When it comes to inflation protection, real estate is at the forefront, as seen here. Whether for personal use or as an investment.

• 75% – Owner-occupied property
• 62% – Investment property
• 32% – endowment insurance
• …

More about buying real estate: Wealth Building

Minimize the risk of inflation with house and apartments or “ignore” it altogether plus accumulate wealth? With the classic savings book, you lose value in real terms, in the long term. Real estate protects against inflation. Read more on the subject here, on my new site for buyers, Immobilien-Erfahrung.de:

• Real Estate & Inflation (external)

News. US inflation above 5.3% again for a long time

US inflation has been rising above 5.3% for a long time, Germany is at 3.8% inflation as of today.

Update on #Inflation USA: You have to go to the second decimal place to see our assessment confirmed that the peak is behind us. Headline rate remains at 5.3%, at least core inflation rose less than expected in Bloomberg survey pic.twitter.com/RA8t6bHgGG

– Marc Brütsch (@MarcBruetsch) August 11, 2021

Inflation in Germany: Statistics

Here you can see the inflation rate in Germany from July 2020 to July 2021 (increase in the consumer price index compared to the same month of the previous year).

You can find more statistics at Statista

Inflation in Europe: Statistics

Here you can see the Eurozone, or inflation rates in the member states in June 2021 (compared to the same month last year).

Inflation in the world: Statistics

Here you can see the inflation rate worldwide from 1980 to 2020 and forecasts until 2026 (compared to the previous year).

What became more expensive? Ranking

This tweet shows which goods were the main drivers of inflation.

Shown concretely for a change: #inflation example since 2019.#Servicetweet

â¦@world_moneyâ© pic.twitter.com/TKJ85gy3Gh

– Johannes Zenner (@JoZenner) August 12, 2021

What does inflation mean for pensions?

In this, another article retirement planning, we calculate the pension together. However, taking into account the regular 2% inflation and all deductions that you also pay as a pensioner.

How much pension do inflation and deductions wipe out?

See here, how you after 35 years of work as a good earner ( > 60,000 gross / year) of 2,393.30 euros gross pension, after inflation (2%) and deductions (tax, health and long-term care insurance), still 739.91 euros left.

Here alone is the inflation in 35 years:

Year	Purchasing power	Inflation
2021	2393,30	2%
2022	2345,43	2%
2023	2298,53	2%
2024	2252,55	2%
2025	2207,50	2%
2026	2163,35	2%
2027	2120,09	2%
2028	2077,68	2%
2029	2036,13	2%
2030	1995,41	2%
2031	1955,50	2%
…	…	…
2045	1473,75	2%
2046	1444,27	2%
2047	1415,39	2%
2048	1387,08	2%
2049	1359,34	2%
2050	1332,15	2%
2051	1305,51	2%
2052	1279,40	2%
2053	1253,81	2%
2054	1228,73	2%
2055	1204,16	2%
2056	1180,08	2%

Doing what? Part of the solution: Investment real estate.

In the following we explain the effect of inflation and taxes on your later pension and ask the question whether a property is not the more attractive investment compared to private pension provision through financial products (such as Riester pension & Co).

• Retirement provision: How much pension will you get?

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