How to Become a Millionaire in Germany on an Average Salary

Key Takeaways

Germany has 2.8 million millionaires, and with the right strategies, you can join their ranks—even on an average salary.
The average German millionaire has €2.94 million, showcasing the power of compounding wealth and smart investments.
Millionaires work 10 hours more per week on average, often self-employed, exemplifying discipline and entrepreneurial dedication.
Men dominate millionaire demographics, accounting for 69%, while women and expats face barriers yet still achieve success.
Wealth increases with age due to earning potential and compounding interest, highlighting the importance of long-term planning.
Wealthy people prioritize real estate and entrepreneurship, accelerating their net worth through diversification and ownership.
By investing 20% of earnings in ETFs and real estate, even an average salary can grow into millions over time.
Hard work, smart investments, and disciplined financial planning are the keys to transforming your financial future in Germany.

Introduction: The Millionaire Landscape in Germany

Germany is home to 2.8 million millionaires, representing just over 3% of its population. While this may seem exclusive, the good news is that becoming a millionaire—even on the average German salary of €4,323 per month—is achievable with the right strategies. Private households in Germany hold a combined net worth of €7.7 trillion, which excludes the value of companies and foundations owned by the wealthy. On average, a German citizen has a net worth of €91,131—a decent sum, but far from millionaire territory.

According to a study by the Deutsches Institut für Wirtschaftsforschung (DIW), the average millionaire in Germany has a staggering net worth of €2.94 million. With this wealth, following the 4% rule, a millionaire could withdraw €117,000 annually—nearly three times the average German salary—without working a day. This illustrates the power of accumulated wealth, as it starts generating income through smart investments.

The path to becoming a millionaire may seem daunting, but understanding who millionaires are and how they manage their wealth is the first step. Let’s dive deeper into the profile of a typical German millionaire and what sets them apart.

What Defines a Millionaire in Germany?

The DIW study categorizes Germany’s population into four groups: the bottom 50%, the middle class, wealthy individuals, and millionaires. While the bottom half struggles with net worths under €22,800, millionaires surpass €1 million, averaging €2.94 million. This wealth enables them to lead financially stable lives while building more wealth through calculated decisions.

Importantly, millionaires in Germany are not idle. Contrary to stereotypes, only 5% of millionaires don’t work, a smaller percentage than the general unemployment rate of 6.1%. Moreover, millionaires work longer hours—averaging 47 hours per week compared to the 37 hours worked by the rest of the population. Many millionaires are self-employed, dedicating weekends and additional hours to their businesses.

This commitment to work explains why millionaires have significantly more financial resources than others. Over a year, their additional 520 hours of work translate into a productivity edge equivalent to 65 eight-hour workdays. Self-employment, combined with a strong work ethic, appears to be a critical factor in climbing the economic ladder.

The Work Ethic of German Millionaires

What truly separates millionaires from the average person isn’t just their wealth but also their mindset and habits. The DIW study reveals that self-employment is a defining trait among millionaires. Self-employed individuals are more likely to reinvest their earnings, take calculated risks, and work tirelessly toward long-term goals.

The disparity in working hours—37 for the average worker and 47 for millionaires—might seem marginal, but it adds up significantly over time. Millionaires effectively work an additional three months annually compared to their peers. This extra effort often results in higher earnings, greater opportunities for investment, and, ultimately, compounding wealth.

This lifestyle isn’t for everyone, but it underscores an important lesson: hard work and strategic career decisions play a massive role in financial success. Whether you’re employed or self-employed, a shift in work habits and focus can have a significant impact on your wealth-building journey.

How Gender and Background Influence Wealth in Germany

While hard work and strategic planning are controllable factors, others, such as gender and background, play a significant role in wealth accumulation. Statistically, only 31% of millionaires in Germany are women, despite women making up 50% of the population across other economic categories. The reasons are complex, ranging from wage gaps to societal roles, but the disparity remains clear.

Expats in Germany face additional challenges. According to the Institut der Deutschen Wirtschaft, median salaries vary greatly by nationality. Highly skilled workers from countries like India, Austria, and Northern Europe earn significantly more than the average German salary. Yet, only 14% of expats achieve millionaire status. This may be due to a mix of financial priorities, lack of familiarity with German investment options, and lower starting capital.

These statistics highlight the importance of tailoring financial strategies to individual circumstances. Regardless of background, focusing on smart investments and building wealth over time is the key to financial success.

Why Age and Experience Matter in Building Wealth

The path to wealth isn’t a sprint—it’s a marathon. DIW data shows that millionaire status is rare for individuals under 25, but as people age, their wealth tends to grow significantly. By leveraging time to accumulate savings, investments, and compounding returns, older individuals naturally achieve higher net worths.

The lesson here is patience. Building wealth takes time, discipline, and consistent effort. Starting early and maintaining a steady course, even through financial challenges, lays the groundwork for future success. Younger individuals should focus on building strong financial habits, while older investors can benefit from optimizing their strategies to maximize returns.

How Millionaires Invest: Secrets to Growing Wealth

One of the biggest differences between millionaires and the rest of the population is how they allocate their money. Millionaires score higher on overall happiness, partly due to their financial stability and smart investment choices. They prioritize investments that generate steady returns, such as real estate and diversified portfolios, while minimizing risky financial behaviors.

Real estate investments stand out as a cornerstone of millionaire wealth. Millionaires often leverage mortgages to acquire high-value properties, amplifying their returns through tax benefits and appreciation. They also invest heavily in ETFs and pension plans, maximizing tax advantages and long-term growth potential.

In contrast, the bottom 50% of earners often struggle with debt and low-value assets, such as consumer loans and depreciating cars. Avoiding these pitfalls and adopting the investment strategies of millionaires can help you significantly improve your financial future.

Actionable Steps for Aspiring Millionaires

Becoming a millionaire on an average salary is not only possible—it’s achievable with the right approach. Start by saving 20% of your income and investing it in ETFs, as per the 50/30/20 rule. Tax-advantaged accounts, such as German base pensions (Level 1), can further enhance your savings through deductions.

For those willing to explore real estate, leveraging mortgages and capitalizing on tax benefits can yield returns far exceeding the stock market. Real estate investments often generate annual returns of 14% or more, thanks to the combination of appreciation, rental income, and tax advantages.

The key is to stay disciplined, focus on long-term goals, and continuously learn from the habits of successful investors. By following these principles, you can build significant wealth over time.

Conclusion: Achieving Millionaire Status on an Average Salary

Germany’s 2.8 million millionaires didn’t achieve their wealth by chance. They worked hard, made strategic investments, and maximized their opportunities. Whether you’re in your 20s or 40s, earning an average salary or more, becoming a millionaire is within reach.

The path involves a mix of dedication, smart financial planning, and leveraging the tools available in Germany, such as tax benefits and diversified investments. With consistent effort and informed decisions, you too can achieve financial freedom and join the ranks of Germany’s millionaires. To make the best out of your financial situation, feel free to book a free meeting with us.