I would like to give you some insight into what it costs to run a business or rather my business in Germany. On top of that I’ll share my cost of living (married couple, child from first marriage is 23 and out of the house, no pets but cat is definitely coming soon).
1. Our Income
My current turn over is around 13k EUR per month, mostly through sales of my online German courses, the rest affiliate share income (500 EUR) and private lessons (500 EUR). Sometimes it’s a bit more, sometimes a bit less. My wife earns 520 EUR as an employee of mine (mini-job) and she’s underpaid for sure – forgive me honey. I used to have up to 5 employees but the company has been running smoothly almost on its own, so there’s no need to employ anyone else. I tackle the few software projects I still find worth my time with help of freelancers from anywhere on this planet.
From those 13k I take out 4,000 EUR every month and an additional 520 EUR go to my wife. Sometimes we need 500 EUR more. That’s my/our salary. I work about 80 hours per month so that’s 50 EUR net per hour.
2. Our Wealth
We are currently living for rent in Berlin Neukölln but are still paying off my wife’s apartment in the Netherlands (-100k EUR) which will at least free us from having to pay rent one day. We won’t use it as an investment because we both believe that habitation should never be an “investment opportunity” for anyone. We will nevertheless benefit from a crazy increase in value which will be eaten up by a heavy increase in cost of buying a new apartment in another place. Currently a friend of my wife’s is staying there at cost meaning we don’t have many costs with it either. She got an iPhone X (150 EUR) as a gift for helping a Ukrainian family with bureaucracy 3 years ago which is still doing its job. Recently I got her a used iPad Pro 11 128 GB for 700 EUR so that she wouldn’t have to schlepp her Intel macbook pro (150 EUR) to uni anymore which was also always running out of juice quickly.
I own a macbook air m1 (2020) worth 1k EUR and an iPhone 15 plus worth 1k EUR. That’s about it. We don’t need a car, ride old bikes and don’t need a TV. My next smartphone will either be a dumb phone or a Fairphone. I see no further justification for spending that much money on a rather ecologically problematic phone.
We won’t inherit much from our working class parents and they hopefully still have 20 years to life anyhow.
Total wealth: -97.000 EUR
3. Cost of Running My Business
Once you make a bit of money everyone wants a piece of the cake whether they deserve it or not. Of 10.000 EUR a month I’d pay the following cost:
- VAT (~15%) 1.500 EUR (not all countries charge the same VAT if any, so this is the average)
- Marketing 2.800 EUR
- Facebook: 550 EUR + 250 EUR for the marketer <– I’ll probably stop this in April, Zuck sucks
- Google: 1.500 EUR + 500 EUR for the marketer
- Sales fees (5%) 500 EUR Credit Card, Stripe, Paypal, Teachable
- Accounting: 470 EUR (inc. yearly tax declaration)
- Software: 435 EUR Teachable, Kit, Canva, Suno, Artlist, Podbean
Rough Total: 5.705 EUR
4. Cost of Living
Berlin is still one of the cheaper cities to live in especially if you have been living here for a while because then your rent is still reasonable. If I had the choice to move here again nowadays, I wouldn’t as rents are ridiculous and it’s a major pain in the arse to get a flat in the first place unless you make a lot of money. My/our salary would not allow that.
Here’s the biggest cost:
- Health insurance 1.150 EUR public insurance out of conviction plus private costs and arm and
a leg when you get older. It’s income dependent and capped at 1.150 EUR and as an employee 50% of this would be paid by your employer but as I’m my own employer… - Rent 85sqm 100yo-Altbau 850 EUR quite hip district still gentrifying
- Wife’s education 500 EUR private psychoanalysis, she wants to
become a psychoanalyst. When she does her masters we might need 830 EUR more for her private university. - Food / Eating out 1.600 EUR we buy high quality food where it’s feasible and our only luxury is
going out for coffee and sandwiches and the occasional Döner. Roughly 20-30 EUR per day for two. - Pension fund* 3.000 EUR is what I’d have to invest at 2% (no crypto) starting today if I want
to retire with 70 and get 2.500 EUR assuming the company pays for itself. I don’t make that kind of money yet. So I don’t pay this yet.
Rough Total: 4.100 EUR (should be: 7.100 EUR)
5. Our personal Future
In roughly 3 years my wife will be done with her studies freeing some resources and allowing her to make some money herself as a possibly child/teen-therapist (~2.000 EUR / mo) allowing us starting to save the necessary 3.000 EUR / month for retirement. My wife’s flat will provide some shelter at least saving us whatever rent is charged in 20 years while also cutting down the running cost by about 1.500 EUR (estimated rent then). I’ll continue to work at SmarterGerman – so God wants – until I can’t do so anymore. Hopefully that will be until the end of this experience.
There’s maybe a total of 100k in inheritance awaiting us in the next 20 years from both sides but that’s a big maybe and we’d be fools to count on this.
My life is fulfilled, I’ve done everything on my bucket list at 52 and have travelled the universe, or rather the universes and quite many dimensions and I’ve also already explored spirituality from sufficiently many angles. There’s nothing more for me to achieve here other than to flow with what is and to spread love and kindness to those that need it and anger to those that deserve it ;P
Most of my week I’m sitting grumpily on my sofa shaking my head over the news. The most fun I have is meeting and working with beautiful people like you.
6. My Business’ Future
Even if the Nazis rise to power also here (Fuck AfD and also fuck CSU/CDU who I see as enablers) there’ll probably always be a need for professional German courses and tutoring. Online courses are also not going away in the foreseeable future either. AI will not take over as it’s one of the biggest consume scams I’ve witnessed in my professional life. There isn’t even any such thing as AI because it’s all ML (machine learning) in disguise. The actual cost of keeping the business running, if I can get rid of paid marketing which I’d love to as Google and FB are horrible companies in my perception, lies at around 2-3k EUR per month maybe even less. I’ll still need to eat and I like to have a warm home, so ideally the company provides me with the necessary income.
All in all I’m still slightly more optimistic than the current state of the world wants me to be. I also still strongly believe in the power of good and caring people and there’s hope that I’ll still witness the downfall of the billionaires as they – or rather the monetary system that made them what they are – are the root of many of our current societal problems. No, it’s not the Ausländer as certain people want you to believe.
So, now you know what it can cost to run a small online business and to live in Berlin in 2025 if you don’t have any ambition to become rich and wealthy. And if I had an office or worse, a school, and more employees that I’d feel obliged to pay what they want for their precious time and skill, I’d have to generate a lot more money every month. I possibly could also make more money but then I’d have to work more. And no amount of money beats having 20 hours of extra time per week which I deeply enjoy wasting on playing computer games – I’m a big fan of Valheim and Satisfactory – or meeting with lovely people like you.
On top of that I’m already financially better off than 99% of this planet’s inhabitants mostly by luck and I got a wonderful wife and son that I love dearly – most of the time. My parents are sweet and good hearted people and I had a pretty cared for childhood thanks to them and my grandparents (RIP).
What would I ever want more from life for myself? You tell me 😉
So the next phase of my life is to see how I can share my wealth with as many others as possible.
FAQs
Let’s look at some frequently asked questions regarding running an online business in Germany and the cost of living in Berlin
1. How much does it cost to run a business in Germany?
The costs depend on various factors such as your target markets, marketing, sales fees, accounting, and software. It also matters whether you have an office and employees as those are heavy costs. In my case, I don’t have to deal with such things, so the rough monthly cost amounts to roughly 5.000 EUR, excluding my personal salary.
2. How high are taxes and VAT in Germany?
VAT in Germany is typically 19%, but some sectors like food and books have a reduced rate of 7%. My business-related VAT expenses amount to around 15% per month as I am obliged to pay VAT in every country of this planet that I sell my courses in. And I happily do so because after all they allow me to live a life I deeply enjoy.
3. What are your biggest personal living expenses in Berlin?
- Health insurance: 1,150 EUR/month (that’s the max at an income of about 130,000 EUR/y)
- Rent (85sqm Altbau): 850 EUR/month (that’s very cheap, rather 1,700 EUR for new renters)
- Wife’s education: 1,330 EUR/month (unusual as she chose a private uni and pays for her analysis which is usually covered by your health insurance)
- Food & Eating out: 1,600 EUR/month (good food is our only luxury)
- Pension savings (ideal but not yet realized): 3,000 EUR/month (well, that’s only if you neglect this point until you are 52 years old. But if I was employed at the same salary I’d have to pay 600 EUR monthly and my employer another 600 EUR into the public pension fund. As a self-employed I am not obliged to do that).
4. Is Berlin still affordable to live in?
Berlin is cheaper than other major cities in Germany if you have lived here for a long time and benefit from lower rents. However, for newcomers, finding affordable housing is challenging. Even with an income of 4.500 EUR monthly we currently would struggle to pay 33% of that just for rent. We don’t have little children but I guess my wife’s training makes up for that cost wise.
5. How do you finance your retirement?
To retire at 70 with 2.500 EUR/month (after inflation), I would need to invest 3.000 EUR/month at a 2% return. Currently, this is not feasible, but my wife’s apartment and her soon to end education will certainly help reduce future costs and add income. The current pension fund however is struggling to fulfil its purpose for future generations. You’ll have to take care of this personally in the near future and the earlier you start the less dramatic things will be when you get older or fall ill. I’ve heard that Rheinmetall stocks are up and coming /s.
6. What are the biggest challenges of running an online business?
One of the biggest challenges is the legal situation. I got a few warnings from shady businesses, costing me a few thousands, I spent even more on making sure my website is following the GDPR to the point and marketing is a pain even though I’ve now been working with the same reliable and trustworthy people for many years. Everybody is trying to sell their new and better recipe for cooking water to you but in the end very few reaching out to you actually offer something of value. Finding people that are good at what they are doing is a challenge and then also having fun working with them is not a guarantee. I got a good hand for picking the right people but it’s still a challenge. But it’s all learning as you go I’d say. Tackle things one by one and all will work out in the end. While I could do my taxes myself, I prefer to have the safety of hiring a tax advisor who stays up to date with the tax legislation and keeps the Finanzamt and Rentenkasse at arms length.
7. How do you see the future of (online) German courses?
I believe there will always be a demand for professional German courses, especially online due to the many downsides of physical courses (long commutes, bigger groups, health risks – see Covid) and AI is highly unlikely to replace human teachers in my lifetime. I’ll continue to work 1:1 with selected people and to improve my online courses so that they will get even easier to work with. Technology isn’t generally easy to use. It has to be made this way and that’s an ongoing challenge. While I’ll use AI in a limited manner myself as an extra product later in 2025, I don’t think it’ll be helpful for the common German learner without proper training or guidance which I’ll of course keep providing.
There’ll also always be the need for physical German courses as the simple fact of sharing a learning experience with others in the same room beats the rather lonely experience of sitting in front of one’s computer even if there’s other faces on the screen (in some online courses, not mine). It’s an economical question I’d say as you’ll need time to travel there and learning is slower especially when the classes are conducted in German in my professional opinion. I personally would always prefer a physical classroom but as you have read above, I got a lot of time on my hands which is a luxury that not many people have and I am not too interested in any specific language but rather in the social experience. But if I had to be more economical I’d definitely pick an online course for self-learners, no doubt.
8. Do you plan to expand your business?
I prefer a work-life balance over maximizing profits. More employees or an office would increase costs significantly, so I focus on maintaining a stable income while enjoying free time and reducing my prices to spread my life’s work further and further. Every German learner that works with my course fills my Karma account. 😛
9. How do you define wealth?
With what I have, I am already wealthier than 99% of the global population at the moment. Financial stability, time freedom, and family and friends are my key measures of wealth. I am very aware that any money I make is hard earned by those that buy my courses and services. I would feel bad if I bought a Porsche for that as much as I understand it’s peak automotive engineering by my people and driving one causes quite a lot of pleasure for a while. But if I ever feel like having a bit more fun, I’d rather take some magic mushrooms in the Netherlands and enjoy the universe’s love and care for a few hours before returning to reality ✌️.
A rough overview of my spendings in form of a sankey diagram via finanzfluss.de based on the assumption that one day I turn around 20k EUR per month:
© Photo in Thumbnail by Microsoft Edge on Unsplash