Financial awareness in the society

What’s your point with the tweet?
They usually don’t list the savings in those graphs.
Considering this, he’s spending the money quite wisely.
(Just checked the article, he has $43k saved at age 25. Seems pretty good to me.)

The point is the same as the NZZ Article. They write about a speicific subgroup of people rather who their believe they write about. (Or in some cases they just pretend to know. 20usd internet per month?)
The biggest example, as pointend around some internet forums, is the 600+ donation. It 's probably someone who “donate” every month to the church (I don’t know how it’s called that kind of tax)

Bad example:

Philanthropy is a key part of Klee’s financial picture. Each month, he donates a significant amount, around $615, to a variety of charities, including More Than Words and GiveDirectly. The bulk of his contributions go to One Family, a non-profit located in Waltham, Massachusetts, that works to end homelessness and break the cycle of poverty for local families.
“I spend money that I would otherwise spend on going out, or just putting it in savings,” he says.
It’s a worthwhile expense for Klee because, while “it’s not a significant amount of money for me,” it makes a difference for others. “It doesn’t affect my quality of life at all, and yet I’m able to actually alleviate a lot of suffering and make a lot of people’s lives better,” he says.

Seems he just cares about things other than getting to financial independence and that’s cool.

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Ok got it.
I wanted to link it to the NZZ article since it seems that NZZ is generalizing something that’s not really general.

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ditto. I try to explain in every way I can but some won’t even believe me about the problems 3ieme investments mixed with risk insurances…they’d prefer not admit that they’d already lost money and don’t want to have to call the insurance to get out of it…so forget about talking about FinPension or VIAC.

FIRE Fund is a whole other story, won’t even let me start to explain how I invest …and i only have 1 fund!

16 posts were split to a new topic: [COFFEE] Investments and donations

cash.ch have some interesting “analytical” articles during weekends, unlike usual buzz. Here is another one I found interesting. But if you tell me to shut up, I will.

Sorry, German. If someone would point me to a French language resource about economy and investment, I would be happy to take a look.

In der Altersgruppe der 16- bis 24-Jährigen wissen demnach nach eigenem Bekunden sogar 45 Prozent nicht, was Inflation bedeutet

Eine deutliche Mehrheit von 82 Prozent der Befragten sprach sich in der BdB-Umfrage dafür aus, der Vermittlung wirtschaftlicher Zusammenhänge in der Schule einen höheren Wert einzuräumen: Umgang mit Geld, Wirtschaftssystem, Möglichkeiten der Altersvorsorge, Möglichkeiten der Geldanlage.

(Biased of course)

Für viele Befragte sind ETFs, Investmentfonds und Co. böhmische Dörfer.

(I personally liked this expression :rofl:).

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There’s also an impact on society, beyond the financial impact on individuals.

Somebody recently told me what a scandal this inflation is!

  1. I asked if they knew what inflation is and was told it’s “something inflated by the rich.”
  2. I asked how “the rich inflate things” and was told that “they gamble with our future.”
  3. I asked if the person supported the financial measures taken by the governments during the pandemic. “Of course, otherwise everything would have collapsed!”
  4. Is there a connection between these measures and inflation? “Huh?”
  5. Finally I asked how high inflation is in Switzerland? The number I was told was actually the inflation in the US.

In other words, I see people complain about financial and economic problems but they don’t have a basic understanding of how things actually work.

Much of this malcontent and mistrust probably can’t be traced back to anything real, anyhow…

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I wanted to share this post from reddit with very interesting stories in the comment section: People who have surprised you with a lack of financial literacy - Reddit

Main post:

I was talking to some co-workers yesterday including a few guys my age that I thought were fairly financially savvy, they both manage side businesses and work with money for our company. I was surprised to learn that neither of them really was that literate in terms of tax-advantaged investing or just general personal finance. I had to walk them through investing in our company 401k program and the differences and trade-offs of using the Roth 401k and standard 401k options we have. One had not been putting any money into any tax-advantaged account and had simply been using a taxable brokerage full time.

I know there are those out there who want to build up a sizable investment portfolio outside of the tax-sheltered options for various reasons such as access or time horizons but it surprised me that these two, in particular, seemed to have no clue about their strategy or purpose, they were just missing out.

I want to hear some other good examples where someone has surprised you with their lack of knowledge or just general misuse of financials, I’m sure there have got to be some good stories out there.

So did you have any similar encounters with family, friends co-workers, etc?

I don’t want to turn this into a political discussion, but isn’t that the same reason why a certain party has as many voters as it has now?

Hard to turn that into a political discussion when you don‘t even name that party.

My gut feeling somehow tells me it‘s not the Green party though.

Hand aufs Herz - wann haben Sie das letzte Mal Ihren jährlichen Pensionskassenausweis angeschaut? Falls Sie jetzt antworten: «Das ist lange her» oder «noch nie», dann sind Sie nicht allein.

83 Prozent der Schweizer Bevölkerung geht es ähnlich: Sie wissen nicht, wie hoch ihr aktuelles Pensionskassenvermögen ist. Das zeigt die Studie «Fairplay in der beruflichen Vorsorge» von Zurich und Vita. Die Studie zeigt ausserdem, dass 57 Prozent der Schweizer Bevölkerung nicht wissen, dass das in der Pensionskasse angesparte individuelle Altersguthaben ihnen gehört.

(Newsletter from a financial company)

Speaking of pension funds: I wonder how many people have only the mandatory part of their salaries covered despite earning more.

I know of a few cases, and they don’t know what it means.

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Not even speaking about people working less than 100%. A lot of pension funds don’t adjust the coordination deduction to the working rate

What do you mean? I think the “coordination deduction” is fixed by legislation and it’s not up to pension funds to decide anything about it.

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If you work part-time and earn 50k, only 25k will be insured. So not a lot of contributions.

Some funds have no coordination contribution and some other funds adjust the contribution to the working rate.

The current deduction of coordination is 25’725.-
Let’s assume the salary is 60k at 100%, and 30k at 50%. An employee works at 50% and his age is 35. The pension fund employer part is 5% and the employee 5% (a total of 10%).

Fund 1 (Not adjusting the deduction of coordination):
30’000-25’725=4275.-
The contribution each year in the pension fund will be 4’275*0.1=427

Fund 2 (adjusting the deduction of coordination):
30’000-25’725 * 0.5=17’137.-
The contribution each year in the pension fund will be 17’137*0.1=1’713

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25‘725.

It‘s 2023 already. :wink:

The law defines a legal minimum (and maximum). Pension funds can operate quite freely within these boundaries, as long as the general principles are adhered to.

Let’s keep in mind that this is only the minimum old-age savings contribution. The contribution could also be higher than 10% - in fact, it usually will be, since there‘s also be risk premiums and management/administration costs to cover.

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Is the coordination deduction a common thing? I have never had that applied to my BVG, I guess that is a good thing?

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While pension funds are pretty regulated, there are still several options to offer a better pension fund for employees. For example:

  • Starting to contribute sooner than 25 (there are several that start at 20)
  • Insure more than the mandatory amount (>61k)
  • Contribute a higher % than mandatory required
  • Decrease the „Koordinationsabzug“ of 25k or even abolish it completely (some pension funds have special regulations like „if you earn less than 86k, 20-30% of your salary will be your Koordinationsabzug“ which is great for part-time or low-income employees)
  • Completely cover all risk-insurance related parts and thus 100% of the contributions/deductions are going into wealth-building
  • Many more…

So lets compare 2 completely different pension funds and 2 different employees in their early 30s. Pension fund A does the legal minimum and pension fund B doesn‘t have a Koordinationsabzug, insures the total salary and contributions are 6% by employee and 9% by employer instead of 3.5/3.5% (legal minimum for 25-34 year olds). Jonas is earning 140k and works 100%. Sarah is earning 50k and works 60%. Total yearly contributions:

Jonas at pension fund A: 4.3k
Jonas at pension fund B: 21k
Sarah at pension fund A: 1.7k
Sarah at pension fund B: 7.5k

These aren‘t just imaginary pension funds. These are real-world examples I‘m encountering every week in my job.

The biggest problem with pension fund A isn‘t even low contributions, it‘s low insured salaries. Invalidity rent is 65% of your insured salary. So it makes a huge difference how much is insured. Especially for Jonas with his 140k salary where pension fund A would only pay 40k/year in case of invalidity compared to the 91k of pension fund B.

So chose your employer wisely. It‘s not only about the salary.

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