Germans are as rich as never before

Germans are as rich as never before. In the first quarter of 2021, the financial assets of private households increased by 192 billion euros to a new record of 7.14 trillion euros, as announced by the Bundesbank in Frankfurt. For the first time, the threshold of 7 trillion euros was exceeded. The growth is due in particular to price gains in stocks and investment funds. How the financial assets are distributed in the population cannot be read from the numbers, however. Cash and bank deposits, which are quickly available funds for private households, increased by 47 billion euros in the first quarter of the year. That is a little less than in the previous quarter. Claims against insurance companies increased by 27 billion euros. "Overall, private households still have a pronounced preference for liquid forms of investment or those that are perceived as low-risk," the Bundesbank said. However, exposure to the stock exchange also increased further in the first quarter. Mutual funds were particularly popular. The households acquired shares in such funds for 25 billion euros. According to the Bundesbank, that was more than ever before. "The increasing involvement in the capital market" speaks for an increased awareness of returns, "said the Bundesbank. In terms of shares, investments were primarily made in domestic company stocks. Price gains on the financial markets provided a lot of impetus - a total of 63 billion euros was the increase in financial assets through valuation gains. Many investors benefited from the steep recovery in prices after the Corona crash in February and March 2020. Overall, however, stocks and funds still only make up a fraction of the total financial assets of private households. Another reason for the overall increase in wealth: In the past year, people in Germany saved like the world champions - largely because trips were canceled and shops and restaurants were only allowed to offer services to a limited extent over long distances. The savings rate soared to a record high of 16.2 percent in 2020. That means: for every 100 euros of disposable income, households put an average of 16 euros on the high edge. Economists assume that after the emergency stop in the pandemic, people will increasingly catch up on consumption thanks to vaccinations and relaxation measures. Nevertheless, financial assets should continue to grow - thanks to increases in the value of stocks, funds and certificates. DZ Bank is forecasting financial assets of EUR 7.6 trillion for the current year, and by 2022 the financial assets could then reach the EUR 8 trillion mark. Household debt increased by 17 billion euros to 1.98 trillion euros. Real estate is not included in the Bundesbank list.