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Invest 100,000 euros correctly: solution for a married couple with one adult child

2023-01-25T10:15:29.973Z


You have received a large sum of money and want to invest? The decision about the “how” is not easy for many. We have created sample cases.


You have received a large sum of money and want to invest?

The decision about the “how” is not easy for many.

We have created sample cases.

Munich – Whether it's a gift, inheritance, severance payment, real estate sale or life insurance payment: many people have a large sum transferred to their account at some point in their lives.

But what to do with the money?

Even if it may sound strange: This question can become a burden.

We have therefore created sample cases and shared them with two experts (see box below) who provide professional financial and investment advice.

We always assumed an investment amount of 100,000 euros, but of course the answers also apply in principle to smaller sums.

Although the tips and hints apply to many cases, both experts still consider further individual advice to be essential.

How do you invest 100,000 euros?

The case

A married couple – both around 50 years old – with a child of legal age receives 100,000 euros from an inheritance.

He lives in a property that has almost been paid off and doesn't need the money urgently, but doesn't want to lose any of it either.

You should have enough money to retire.

There should also be a small reserve for the child, for example for a used car.

How should the couple proceed?

Tip 1: make a checkout

As with any financial decision, the couple should first make a checkout, advises financial advisor Merten Larisch from the Bavarian consumer center.

What about retirement provision?

Will the pension suffice later?

Are there enough reserves for the couple?

And: Are major investments planned for which the money is required?

In this case, the experts assume that it is not so, after all, the couple does not need the money urgently.

Only a special repayment of the remaining debt of the real estate loan is worth considering, provided that this brings financial advantages.

Tip 2: Up to 20% reserve

A part of the 100,000 euros should still flow into a reserve for the child who has just come of age, for example for a car, a semester abroad or household appliances.

Because even after children leave home, they remain a cost factor.

Both experts therefore recommend putting aside up to 20,000 euros.

"But it shouldn't be more than necessary, after all, this reserve loses purchasing power due to inflation," explains Jürgen Wörl from the private bank Julius Baer.

And Merten Larisch says that parents shouldn't just think about the child, but "first of all, apparently selfishly, about themselves." It doesn't do the children any good if the parents' property has to be sold at some point due to lack of money, which would otherwise be inherited.

As a “parking space” for the reserve, the experts recommend overnight and time deposit accounts.

There, interest rates are below inflation, but the capital is available.

Tip from consumer advocate Larisch: 10,000 on the call money account, where you can access the money at any time, the other half on fixed-term accounts with a term of one, two and three years, where there is a little more interest.

In this way, money is regularly available and the loss of purchasing power due to inflation is kept within limits at least as much as possible.

Our experts

The financial expert Merten Larisch offers comprehensive and independent financial advice for 120 euros per 90 minutes at the Bavarian Consumer Advice Centre.

You can register on the Internet on the website of the Bavarian Consumer Advice Center or by calling 089/5 52 79 41 31. The consumer advocate's suggestion for the couple: 20,000 euros in overnight deposits or time deposits, 40,000 euros in global stock ETFs and more 40,000 euros staggered in fixed-term deposit accounts.


The private bank Julius Baer primarily advises wealthy clients with invested capital of more than one million euros.

At the moment she manages 481 billion euros in assets.

Jürgen Wörl heads the Julius Baer office in Munich.

He advises the couple to invest a reserve of 20,000 euros in overnight or fixed-term deposits, 30,000 euros in shares and 50,000 euros, some of which are staggered, in bonds or additional fixed-term deposits.

The share capital should be invested with an investment horizon of at least five years.

Tip 3: Up to 40% shares

But because even with three percent interest and ten percent inflation, assets melt down by seven percent a year in real terms, a part has to be invested in shares.

The financial professionals point out that it is difficult to say exactly how much should be invested in shares.

That depends on your personal risk tolerance.

Nevertheless, both had to specify a specific sum: Merten Larisch advises 40,000 euros, Jürgen Wörl 30,000. The decisive factor here is the investment product.

Julius Baer relies on globally investing equity funds or globally investing index funds, ETF for short.

This is how you spread risks worldwide.

In contrast, the consumer advice center favors only globally investing ETFs because of the lower fees.

Indices such as the MSCI World, which contains over 1,500 stocks from 23 industrialized nations, are suitable.

Or the indices MSCI All Country World and FTSE All World, which even come to around 3500 titles with additional emerging market papers.

In the past 15 years, global stocks, calculated in euros, despite the financial crisis, the corona crash and the Ukraine war, have brought in more than 200 percent profits – on average eight percent per year.

The longer you invest, the lower the risk of losing money.


Tip 4: Invest the rest with interest

But what about the rest?

It should be invested conservatively in order to have security.

For consumer advocates Larisch, this is mainly possible with fixed deposits.

He advises investing an amount of EUR 40,000 in four tranches of EUR 10,000 each with a term of one, two, three and four years.

“In this way, a partial sum is due every year that you can decide on anew.” At the same time, you secure a higher interest rate for the longer terms.

Good offers for such fixed deposit accounts can be found in the lists of Stiftung Warentest or on the financial portal biallo.de.

Jürgen Wörl also finds this staggering sensible.

He also brings bond funds and bond ETFs into play.

Instead of slightly higher-interest bonds in foreign currency or from borrowers with less good credit ratings, he would prefer paper from solid states and companies,

even if they offer slightly less interest.

But: "The better the creditworthiness of the investment, the more secure these bonds are," says Wörl.

After all, this building block should balance out the fluctuations in the shares and consistently deliver small returns.

Source: merkur

All news articles on 2023-01-25

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