Optimization ideas when ETFs reach FIRE-level
Hi,
Long time lurker here. Great community.
Here's the rough summary of myself and my assets to contextualize questions. Happily married, we have kids. I earn 200k€/year, wife and other family support income bring another 2.5k€ / month. Rental income below.
Regarding assets, we have one rental apartment (~900k€) that brings 2.6k€/month. Our home (~1.3M€). Combined mortgages are ~5.8k€, total debt is 1.1M€ (1.7% and 3.8% Tilgung). We have 120k€ in ETFs and 30k€ in cash. Through other assets we get rental income of 2.8k€.
I have a holding UG that has the shares from a startup I founded (were I work at) and some angel investments. The UG has ~1M€ in it's balance sheet (800k€ in ETFs, 100k€ in money markets and 100k€ on high interest accounts).
Now the changes coming, the UG will very likely receive between 2-5M€ in the next 6-8 months. My salary will grow 25-40% together with this.
From above, total income before this change is ~17.5k€ / month. I have some tax optimization with the rental but performance is not spectacular.
Questions:
- Do I get any tax benefit from converting UG to GmbH? Thinking about the 25% allocation of income from the UG and things like that.
- Should I sell the apartment and buy ETFs whenever I can do so without paying taxes (in ~2 years)?
- I'm employed as full time employee through employer of record. The company is incorporated in EU but not Germany. Is there any way I could hire myself through my holding and optimize taxes that way?
- Is there any tax optimization schemes that would make sense to do in the UG before the additional income lands?
- Any sense in advancing payments in the two mortgages? We have some cash leftover and some bonuses here and there but at such a low interest I always hesitate. It would feel better to not have debt but also invested is doing better.
Thanks in advance for any advice. Happy to share more details. I read you in the comments.