How educated are all millionaires

Research puts Germany's millionaires under the microscope

The latest studies by DIW Berlin show that ten percent of Germans have around two thirds of net wealth. The scientists are therefore calling for greater broad-based support for wealth creation.


So far, science has known little about the wealthy in Germany. For example, they have so far been underrepresented in the Socio-Economic Panel (SOEP) of the German Institute for Economic Research (DIW Berlin). It was unclear what the actual scope and the precise financial situation would look like. Now the Berlin researchers have closed this data gap. This correction was made possible by an additional sample in which people with high wealth are strongly overrepresented.

2020 | OriginalPaper | Book chapter


In a developed society with a high division of labor like the Federal Republic of Germany, most of the goods and services necessary for one's personal life have to be bought. This means that the availability of money, that is, an adequate and continuously flowing income, becomes a fundamental requirement for an individual's standard of living.

Statements on the distribution of wealth are now more precise

The result: a large part of individual net wealth is concentrated in a comparatively small group of citizens. According to DIW Berlin, the richest ten percent make up "a good two thirds of net wealth". Previously, it was assumed that it was just under 59 percent. The richest percent of the population owns around 35 percent of the property, instead of the previously suspected 22 percent.

"Thanks to the new data, we can take a closer look at millionaires for the first time and describe their wealth as well as characteristics such as age, education and occupation in a really reliable manner. , explains Carsten Schröder from the Socio-Economic Panel, who wrote the study together with Markus Grabka, Charlotte Bartels, Johannes König and Konstantin Göbler.

Millionaires are often male, self-employed, and educated

About 1.5 percent of adults in Germany have an individual net wealth, i.e. gross wealth minus debts, of at least one million euros, the institute explains its results. Among them are more often than average men who are older, better educated, independent and more satisfied with their lives than people with less wealth.

The researchers identified this target group through their company shares, which these wealthy people often have. For this purpose, a representative random sample of almost 2,000 people was created from a database of 1.7 million people who live in Germany and have significant stakes in companies worldwide (SOEP-P). Compared to the regular SOEP sample, the net worth of this new target group is on average 21 times higher.

In order to include even higher wealth, the publicly accessible lists of the rich man of the Manager Magazin were used, as these show a particularly high concentration of wealth. "The calculations on the basis of the data set created from all three sources give a complete picture of the distribution of wealth in Germany," said the scientists.

40 percent of rich women are over 65 years of age

Interesting: Among the millionaires, the proportion of women is relatively low at just over 30 percent. 14 percent have a migration background, six percent come from the new federal states and 40 percent are over 65 years old.

For rich men and women alike, however, the following applies: Despite their older age, they are still working, the majority of them self-employed. And overall, they are significantly more satisfied than the average of the rest of the population, both in general with their life and in almost all sub-areas such as family, income and health.

Researchers recommend promoting real estate ownership and wealth accounts

In order to counter "the very unequal distribution of wealth, even in an international comparison", the Berlin researchers recommend that politicians support the accumulation of wealth across the population. This also includes a reform of state-sponsored private old-age insurance.

The Berliners see a possible way in individualized asset accounts. The state can pay into this for people with limited financial opportunities and they can then later fall back on the financial cushion from a certain age. A change in the promotion of property ownership should also be considered.

State subsidies instead of tax on the wealthy

"State incentives for wealth creation should be preferred to a stronger redistribution from top to bottom," says study co-author Markus Grabka. DIW Berlin therefore speaks out against a wealth tax or wealth tax.

"Many high-net-worth individuals keep their assets mainly in companies or in real estate that they don't live in. More than half of their individual assets are used productively and thus benefit other people and the economy as a whole", SOEP researcher Johannes König explains this attitude. The current recession as a result of the corona pandemic also illustrates the problem of a wealth tax, as this is assessed independently of income and could further exacerbate the recession in a crisis situation.

Asset accumulation through mutual funds

Building up assets sensibly can also be achieved through investment funds, for example, write Philipp Karl Maximilian Lindmayer and Hans-Ulrich Dietz in the book "Geldanlage und Steuer 2020". You perform on page 238:

The organizational and legal security of the investment in investment funds results from a large number of fundamental and essentially investor-friendly regulations and provisions such as the separation of the investment assets of the investors from the assets of the capital management company and the prescribed transfer of the custody and control of investment assets to a depositary and their liability . Investment funds are also protected against insolvency. "

In addition, there is the supervision and monitoring of the investment companies and the depositaries by the Bafin. The depositaries are also supervised in accordance with the provisions of the Banking Act. On page 243, the Springer authors compare the advantages and disadvantages for investors:

Investment funds from an investor's point of view



• Comprehensive investment information before signing a contract

• high legal security for fund companies according to European law (depositary principle and state supervision)

• Risk diversification

• High liquidity due to availability, mostly every trading day

• Comprehensive publication obligations and regular price publications

• convenient form of investment

• regular information

• Suitable for using the employee savings allowance under certain conditions

• Investment also in smaller amounts

• Savings plans and payout plans

• Possibility of reinvestment of the income at discounted conditions, usually without an initial charge

• easier access to foreign markets

• Extensive price transparency through the specification of the total expense ratio (abbreviation TER)

• Issue surcharge on purchase

• partial expenses for the brokerage of fund units that are not issued by the broker's institute

• Total annual cost burden through administration costs and the costs of fund management

• Depending on the fund, a performance fee is also charged

• Distribution can vary widely - even downwards

• In addition to market development, success depends on management performance and fund policy

• rather longer-term investment (exception: money market funds)

• The share value can fluctuate considerably in spite of the diversification and good management performance

Source: Book "Geldanlage und Steuer 2020", Philipp Karl Maximilian Lindmayer and Hans-Ulrich Dietz, 2020

The Springer authors provide the following criteria as assessment criteria for the selection of funds:

  1. Legal basis: Does the fund have a secure legal basis, as is generally the case with UCITS funds and AIF funds?
  2. Creditworthiness: How is the fund company rated by financial analysts?
  3. How is the fund rated within its peer group (fund ranking)?
  4. Does the investment company have many years of experience and proven success?
  5. Which investment strategy is being pursued? What can be found in the fund prospectuses?
  6. What has been the investment success and performance of the individual funds to date?
  7. Can you also expect medium and long-term investment success?
  8. Does the fund strategy match your investment strategy?
  9. What information do you have about the experience and proven sustainable success of fund management?
  10. What are the total costs? The subscription fee is often negotiable. Pay attention to the total expense ratio (TER)!