How to Set Up an ETF Savings Plan — The Easiest Way to Build Wealth

A savings plan (Sparplan in German) is the single most powerful tool for building long-term wealth. You set it up once, invest a fixed amount automatically every month, and let compounding do the rest. No market timing, no stress, no expertise required. This guide shows you exactly how to set one up.

What Is a Savings Plan?

A savings plan is an automatic recurring investment. You tell your broker: “Buy €100 worth of this ETF on the 1st of every month.” The broker executes this automatically — you don’t need to do anything. The money is debited from your account and invested on your chosen schedule.

This strategy is called dollar-cost averaging (or Cost-Average-Effekt in German). Because you invest the same amount regularly, you automatically buy more shares when prices are low and fewer when prices are high. Over time, this averages out your purchase price and eliminates the risk of buying everything at a market peak.

Why Savings Plans Work So Well

You remove emotion from investing. Markets crash. Headlines scream about recessions. Your gut tells you to sell everything. But your savings plan doesn’t care — it keeps buying. And those purchases during scary times turn out to be the most profitable ones.

The power of compounding is real. €200/month invested in a global ETF averaging 8% annual return becomes: €36,589 after 10 years, €118,589 after 20 years, and €298,072 after 30 years. Your total investment was €72,000 over 30 years — the other €226,072 is pure compound growth. That’s the money working for you while you sleep.

You don’t need a lot of money. Most brokers let you start a savings plan with as little as €1/month. Even €25 or €50/month adds up significantly over decades.

What Should You Invest In?

For a savings plan, broad ETFs are the best choice. Here are the most popular options:

The “One ETF” solution: iShares MSCI World (IWDA) or Vanguard FTSE All-World (VWCE). One ETF, 1,600+ companies, 23+ countries. Set it and forget it. This is what most financial advisors would recommend for someone who wants simplicity.

The “Two ETF” solution: 70% MSCI World + 30% MSCI Emerging Markets. Same broad coverage but with more weight on developing economies like China, India, and Brazil. Slightly more diversified, slightly more complex.

The “S&P 500” solution: If you believe U.S. stocks will continue to dominate, a single S&P 500 ETF (like SXR8) is an option. Less diversified geographically but has historically delivered the best returns.

Step by Step: Setting Up Your First Savings Plan

Step 1: Open a brokerage account if you haven’t already. Trade Republic, Scalable Capital, and Flatex all offer free ETF savings plans. See our Depot eröffnen guide for details.

Step 2: Decide how much you can invest monthly. Be realistic — use money you won’t need for at least 5-10 years. Even €25/month is a great start. You can always increase later.

Step 3: Choose your ETF. For beginners, VWCE (Vanguard FTSE All-World, accumulating) is the simplest choice. One purchase covers the entire global stock market.

Step 4: In your broker app, search for the ETF and select “Savings Plan” or “Sparplan.” Choose the amount, frequency (monthly is most common), and execution day (1st or 15th of the month is typical).

Step 5: Confirm and you’re done. Your broker will automatically invest for you every month. Sit back and let time work its magic.

How Much Should You Invest?

A common rule of thumb: invest 10-20% of your net income. But honestly, anything is better than nothing. Here’s what different monthly amounts grow to over 30 years (assuming 8% average annual return):

€25/month → €37,259. €50/month → €74,518. €100/month → €149,036. €200/month → €298,072. €500/month → €745,180.

The most important thing is to start. You can always increase the amount later as your income grows.

Common Savings Plan Mistakes

Stopping during a crash. This is the biggest mistake. When markets drop 20-30%, your savings plan buys more shares at lower prices. Those cheap shares will be the most profitable ones when markets recover. Pausing your savings plan during a crash is like leaving the store during a 30% off sale.

Changing your ETF constantly. Pick one ETF and stick with it. Switching from MSCI World to S&P 500 to Emerging Markets every few months just creates transaction costs and tax events without improving your returns.

Investing money you’ll need soon. A savings plan is for long-term wealth building (10+ years). Don’t invest your emergency fund, vacation money, or rent. Keep 3-6 months of expenses in a savings account as a safety net first.

Track the growth of your savings plan with our Portfolio Tracker and use our Compound Interest Calculator to see how your investments will grow over time.

This article is part of our Academy series — investment education for beginners and beyond.

Disclaimer: This article is for educational purposes only and does not constitute financial advice.