Tuesday, February 2, 2021

Long term investing in Germany - bad idea ?

Firstly, sorry for writing the post in English, I live and talk in German in real life but I'm more comfortable expressing opinions in English, especially when it comes to things I rarely talk about in German (also, der, die, das geben mir Angst).

This is the article I'm talking about If I understand this correctly, This means losses from Stocks can only be matched with winnings up to a total of 20.000E.

Let's look at the following scenario. At the beginning of 2021 you bought a total of 200.000E in different stocks with your life savings. On 31th Dec 2021 because of some event, the stock market goes down, so you are now worth 100.000E. Next year the price rises again, so that at the end of the year you have 200.000E. That would mean, that you will have to pay taxes on a total of 100.000E-20.000E =80.000E, even though you had 200.000E cash at the beginning of 2021 with which you bought the stock. That means you would have been better off just holding the money through the inflation!

I know it's a lot of money to be talking about, but this scenario makes a stock market drop at the end of the year a catastrophe, in theory you can end up owing the tax man more money than you are worth.

It would make more sense to buy Bitcoin and hold it for at least one year (since it becomes steuerfrei afterwards).

Opinions on this ?


No comments:

Post a Comment