Hi Cass,
well, I'm a German mini-mustache, who is at least striving for an early semi-retirement within the next 10 years. I think the German situation is not completely comparable to the US situation. What you can do, as MrMM suggests is:
* Reduce your spending e.g. but choosing your home related to your job wisely and buy (if required at all!) a used car. Use public transportation or bicycle if possible. At lot of hints of reducing your cost a applicable in Germany as well.
* Investing in index funds is possible in Germany as well and is really a good idea. The knowledge about this is rather low in Germany. The TER should be around or less than 0,5%p.a.
In my humble opinion the best starting point for German readers are the books by Gerd Kommer: Either the "Buy-and-Hold-Bibel" or "Souveraen investieren mit Indexfonds und ETFs". You can find both on Amazon. The tax aspect of these index funds can be discussed in forums like the wertpapier-forum.de. Me, I prefer mainly Comstage funds (just to give you an idea - this is NO recommandation - you have to decide on your own).
* I personally (again you have to find an own opinion) would not recommend using Riester or Entgeltumwandlung. Both support you during the saving phase by tax reduction, but this is rather a delay in tax payment since you have to pay these taxes back during the payout phase. This is all well and good, but the products you can choose from are mainly too costly. The nice benefits are mainly offset by these expenses. I would give you the advice to do the investment in index fonds on your own.
* Pay attention that the health insurance system is also different in Germany. It might be useful to keep a midijob (>450Euro) during semi-retirement. Otherwise your savings gains like interests and dividend will be taken into account to calculate your health insurance premium. This is a rather short explanation, I know, but the rules may change until you can retire early :-).
* If you would like to visit some websites, I would suggest, you take a look at those:
- der-privatanleger.de
- zendepot.de
Both are done by private individuals (so no interest in selling you into several product!!). The first one is a little older and deals with most of the ETFs asset classes you might be interested in.
The second one is a rather new blog. I really appreciate the way, information is presented there and a series about ETFs is about to start in the next weeks as the blogger just mentioned.
I hope these information help you to start your index investment. My recommendation:
* Start with one of the books. Read it twice.
* Read the blogs
* Ask within the mentioned forum, if questions remain. (Don't ask about early retirement there - in Germany this is not common idea and they will mainly say you are crazy ;-).)
If you have any specific questions, I will try to help you.
Best regards,
Woody