Regrettably, there is no “official” classification of life phases. Based on our many years of experience, however, we can identify four broad distinct phases which, as already mentioned, differ very considerably from one another.

The first phase, which unfortunately is not within our own control, is childhood. Here the parents can already lay the foundation for a solid start in life. Long-term savings schemes, real estate and the targeted use of tax allowances can thus generate initial returns and a financially independent life. The parents’ liquidity requirements and financial circumstances are, however, highly individual here and can accordingly be influenced only to a limited extent.

With the end of childhood, in the second phase, one’s finances are now in one’s own hands. In their younger years, many people are still at the start of their career or are studying and have often not yet built up sufficient assets to invest in several areas at once. Depending on one’s personal appetite for risk, a risk-conscious investment strategy may well be chosen. Investments in shares or equity funds, for example, would be conceivable. With the right point of market entry, these can deliver high returns over the long term. A high return always goes hand in hand with higher risk. The investor’s risk tolerance should therefore always be taken into account.

Liquidity, too, plays an important role in one’s younger years. Those who do not yet enjoy substantial financial security often need money at short notice. It is therefore advisable to keep part of one’s assets in liquid investments, such as instant-access or fixed-term deposit accounts.

In the third phase, in middle age, many people have already built up substantial assets or enjoy stable income conditions. The focus now is on safeguarding one’s wealth and achieving further financial goals. A balanced investment strategy with a broadly diversified portfolio of shares, bonds and funds may be the right choice here, but real estate for private use also plays a major role at this stage of life. Matters such as family planning, career and the financial circumstances of one’s own parents have an enormous influence on the choice of investment strategy. Liquidity, too, continues to play an important role, since unexpected expenses or sudden changes in one’s circumstances may arise.

In the final phase, in old age, asset management once again becomes particularly important. Here the focus is above all on preserving one’s wealth and generating a regular income through pension funds and conservative investment strategies. In this phase, growing one’s own wealth is difficult to achieve and certainly cannot be accomplished through work alone. Nevertheless, even this phase offers opportunities to continue building one’s wealth.

Inflation, too, should be taken into account, since it can erode the purchasing power of one’s assets. A regular review of the investment strategy and an adjustment to the current market situation are therefore very important.