Setting up a corporation for managing my own wealth (Germany)

[NuncFluens]

As I got more and more involved in the ERE forum I've notice one clear dissonance with the (or at least Jacob's) ERE mindset, namely my solely investing in ETFs because I'm to anxious/lazy to manage my money in any other way. This sent me down a rabbit hole researching different ways of managing my wealth, which led me to a german blog whose owners established a corporation solely for managing their own money.

This has a lot of tax benefits such as indefinite deferral of at least part of the taxes on dividends and income from selling stocks, more possibilities to offset losses, etc. On the other hand it seems like the bureaucratic burden is immensely high (Germany, remember) and most of what I could get out of it now (at 40k€ NW) would be eaten up by tax advisors and management-fees. Anyway, there's a supposed breakeven point at ~100k€, which has me thinking I might switch from salaried work to managing my own wealth as a "job" in the future.

So... did any of you ever "go pro" in managing your own wealth and was it worth it (especially with all the overhead required)?

[Lemur]

@NuncFluens

I don't know much about setting up corporations...let alone a different country then the U.S. but there is certainly nothing wrong with investing plainly in ETFs. You will get average market returns which is acceptable enough for FIRE/ERE purposes and time is a cost too and active traders have to spend more time in research, trading, and thinking. And even still, active investors might still lose anyway despite efforts.

Speaking of setting up corporations, I'm thinking that is more for managing business or real estate portfolio. Never heard about it for managing funds unless it was OPM (Other People's Money).

[Alphaville]

what you're talking about exists but here in the usa it's at a different level of wealth altogether

https://en.wikipedia.org/wiki/Family_office

any kind of formally incorporated business can be an administrative headache, but business rules change from country to country so that depends.

on the other hand you might be able to legally establish an "investment business" in a tax haven maybe? i don't know your laws though.

https://www.forbes.com/sites/alasdairla ... 6893729432

[J_]

@Nuncfluens Do not become a slave of your possesions, I would say. Look for the most simple way to maintain your savings. Since bonds are gone I have most of my savings on bank accounts, I accept what inflation does, I accept to pay taxes. It worries me not at all. The more ere style you live the less you are prone to inflation, for me only the cost of food is one which makes my yearly expenses grow a little because of inflation. An other thing are taxes, but that is mostly beyond your control.

[Alphaville]

it seems though (caveat:this impression might be an illusion) that moving to the netherlands alone could automatically set you up in a more favorable tax regime.

eta: then again... https://www.numbeo.com/cost-of-living/c ... etherlands

[NuncFluens]

it seems though (caveat:this impression might be an illusion) that moving to the netherlands alone could automatically set you up in a more favorable tax regime.

eta: then again... https://www.numbeo.com/cost-of-living/c ... etherlands

The basic tax structure seems a bit simpler, but not exactly more favorable money-wise. Although the most relevant bit would probably taxes on capital gain which seems lower for selling stocks and higher for dividends. This is subject to change, though, as it is in Germany too, so it might be a wash.
And I have to disagree on the cost of living, at least when it comes to food. There might have been more fancy options, but when it comes to staples, The Hague was not any more expensive than home.
Overall moving there should be a minor factor in overall wealth management.

@Nuncfluens Do not become a slave of your possesions...

I guess you're right. I spent some more hours researching how to set this construct up and it seems it really only shines as part of a multi-corporation scheme. That means more setup costs, more running costs, more tax forms
It's just sad how anti-FIRE this country is when it comes to the common people and this seemed like a better way, but no...