Meter crowds percentage
The pursuit of a long dollar
Text: Igor Dunaevsky Americans are distinguished by a fairly high level of financial literacy and willingly experiment with different forms of investment. This is especially evident in times of crisis, such as this year plagued by the coronavirus pandemic. According to statistics from the US Department of Commerce, in the spring, Americans drastically reduced operating expenses and saved a record 33 percent of their income for savings. By the summer, this figure dropped to 19 percent, which is still much higher than the average level of recent years, about 6-7 percent.
An investment portfolio is usually made up of several instruments. If we talk about deposits popular in our country, then in America the rates on such products are low. For example, the typical return on deposits in major banks does not exceed 0.6-0.8 percent per annum. As for savings accounts, the profit on them is symbolic at all – from 0.05 percent per annum. In addition to their liquidity, their plus in comparison with more profitable and risky assets is that all savings in such accounts are insured by the state for up to 250 thousand dollars. In special credit associations, rates are slightly higher than in banks, but still do not exceed approximately 1.5 percent per annum, even for long-term investments (for 5 years). Therefore, such deposits are considered more a means of preserving savings than increasing them. Deposits and savings accounts are only the third most popular type of savings investment in the United States. According to the financial analytical resource Bankrate, on p�Approximately 19 percent of Americans ranked first such an instrument.
In the United States, long-term investments are preferred. For a long time, securities have been the favorite among them. For example, investments in a stock fund according to the Standard & Poor’s 500 index have, on average, been consistently generating about 10 percent per annum over the past decades. Such investments for the majority are considered long-term (from 3-5 years), since for a short time, due to the volatility of financial markets, they can be unprofitable.
But in the last couple of years, real estate recovering from the collapse at the end of the last decade pressed the position of securities. According to polls of sociologists, about a third of Americans, when asked where they would invest savings that will not be useful to them in the next 10 years or more, would choose to buy real estate.
Return on deposits in the US does not exceed 0.8 percent per annum, therefore, to increase savings, Americans buy shares
Precious metals have a certain popularity, which is given priority by every tenth American. Cryptocurrencies and other exotic investments are considered the best investment under 5 percent.
A special place in the investment portfolio is occupied by individual retirement accounts, which Americans try to open in their youth for the sake of savings for a comfortable old age. By themselves, they do not bring income, but they enjoy tax incentives for deductions. Given that tax rates in the United States are quite high (from 10 to 37 percent depending on the amount of income), this alone makes such plans a good investment. In addition, funds placed on such an account can be additionally invested both in deposits and in securities in order to increase the amount of savings. It should only be borne in mind that the funds in such an account are usually frozen for decades and will only be able to be used upon retirement. Many such pension plans are provided by their employer, but about one in three Americans working in the private sector does not have this option in their contract.
Money goes to stones
Text: Vyacheslav Prokofiev (Paris) A longtime acquaintance who works in one of the capital’s legal agency, a year and a half ago, acquired a little “odnushka” near Paris. True, Marie-Anne did not live there, but immediately surrendered her. To my question about how profitable it is, she replied: “And how! We have money invested in stones – the most reliable way to secure savings.”
When buying, Marie-Anne used a bank loan, and in France he is more than sparing for such real estate transactions – from 0.75 percent per annum to 2, depending on the terms. As a result, the rent for the “odnushka” almost completely covers the deductions to the bank for the loan. As a result, after 15 years (for this period he was taken) Marie-Anne will become a full-fledged owner of the apartment, which by this time, which is important, on the market will cost two or even three times more than the original price. There are a lot of such “lovers of stones” as Marie-Anne in France. And this is not surprising: housing has only one tendency here – it is getting more expensive. So, it is officially calculated that in Paris from 2000 to the present, the average cost per square meter has grown by 250 percent, and now it is off scale for 10 thousand euros.
Today the French are most concerned with the safety of the euros they earn. And here the undoubted champion is accumulative life insurance. It embraces tens of millions of French people. Last year alone, more than 144 billion euros were invested in this financial instrument, and the savings there are estimated at an astronomical amount of 1.785 billion euros. These investments are guaranteed to be of the highest standard. However, the profitability here is low – from 1.5 to 2.5 percent per annum. In addition, we are talking about a long-term investment, calculated for at least eight years. If you use it earlier, you will have to pay tax.
An equally popular, let’s say, “popular” way to secure savings is Livret A – a modernized version of a savings bank. Here, in general, the guarantee is complete. It is not for nothing that almost all French people have it. You can replenish and withdraw money from it at any time without any deductions and taxes, but there is a limitation – it is allowed to keep no more than about 23 thousand euros on this account. And one more disadvantage: the yield is microscopic – 0.5 percent.
For people who are wealthy to one degree or another, there are other ways to preserve, and even increase their savings. Note that the French are now, to put it mildly, restrained, towards playing on the stock exchange, towards investment funds, not to mention bank offers to purchase shares and other securities. Some still have bruises since the 2008 financial crisis. But, for example, the purchase of wines for investment purposes attracts many. It is clear that not ordinary wines, but those that are included in the Grand Cru category, that is, classified, exclusive Bordeaux and Burgundy. Strict statistics show that over the past two decades, prices for these rare wines have increased by 4-8 percent annually.
The most reliable is a passbook
Text: Ekaterina Zabrodina It is not for nothing that the Germans are known as one of the most frugal nations. According to Deutsche Welle, every second German citizen tries to set aside at least a small amount every month. According to the Federal Statistical Agency of the Federal Republic of Germany, these savings account for about 10 percent of the annual income of citizens.
The most popular means of saving is the “grandmother’s method” – the good old passbook. More than 70 percent of citizens had at least one savings account in 2019, according to a study by the Statista Center. This way of investing money is considered the safest, although the least profitable: most banks and savings banks offer rates below 0.1 percent. Yet the total volume of private savings, according to the Bundesbank, has already exceeded 6 trillion euros. Families with minors often open special “children’s accounts” with a rather high, by local standards, rate of up to 3 percent on deposits up to 500 euros.
The purchase of precious metals has been considered a stable investment option for several decades. Gold bars can be purchased at major exchange offices. Gold coins are also in use, especially those minted at the Bavarian Mint, whose history goes back to the 12th century. However, this activity is rather the lot of enthusiasts: the costs of keeping jewelry in a safe deposit box or in a safe are too high. Investing in stocks is also not very popular due to the high risks. At the end of last year, slightly less than 10 million citizens were shareholders of various companies, this is about 15 percent of the population of Germany over 14 years old.
Recently, new types of investment have been gaining momentum, for example, in “green” bonds (Green bonds). These are environmental projects such as the construction of wind turbines. But Germany does not yet have clear financial standards for “climate-friendly initiatives,” and this is holding back a massive influx of investors into the industry. The market for “financial technologies” (FinTechs) is developing. It attracts gambling patrons who are passionate about supporting high-tech startups. True, they are at serious risk, because no one can guarantee that such a startup will last at least three years, the portal vergleich.de notes.
Germans are conservative in terms of savings and the most popular way to invest them is still a savings bank
Germans also invest in material values - art, antiques, musical instruments, wine. In 2014, the first edition of the 1938 Superman comic book was sold for 2.4 million euros. Things are more complicated with the paintings, because the buyer must spend money on their assessment. On the other hand, the Germans are willing to invest in what they know and love – cars. So, the Hamburg company Momentum automotive invites interested investors to invest 100 euros in limited edition Ferrari and Aston Martin models. If they are sold within a certain period, the depositor is guaranteed income. And eROCKIT, which manufactures pedal motors at its plant near Berlin, allows anyone to invest in the project from 100 to 25,000 euros in exchange for a fixed interest rate of 5.4 percent for three years.
The Untouchables no more
Text: Niva Mirakyan (Rome) The coronavirus has seriously altered the attitude of Italians towards their once “untouchable” savings. Due to the coronavirus epidemic, almost half of Italians had to cut costs and start actively spending their savings for a rainy day, according to a study by Cerved. Therefore, the question today is not so much how to increase savings, but rather how not to waste existing funds.
According to unofficial data, Italians keep about 200 billion euros in 1.5 million bank cells, this money are often the result of undeclared income. At the same time, official sources claim that in 2019 they had more than 4.445 billion euros between current accounts and time deposits.
In recent years, the lion’s share of Italians have lost interest in buying stocks and bonds, as well as playing on the stock exchange. They consider the securities market to be overly volatile. A very small percentage of those who trust their hard-earned money to private pension funds. True, due to the pandemic and with a sharp increase in mortality, the inhabitants of Italy began to actively purchase all kinds of insurance packages.
Italians had to cut costs and actively spend their savings set aside for a rainy day
types of investments are confidently leading the purchase of real estate. More than half of citizens (56 percent) adhere to this logic. And there is a very reasonable explanation for this – real estate in Italy, which despite everything remains the main tourist destination in the world, is both a tool for quick earnings and a long-term investment that will help save capital from any economic shocks.
The deposit will dilute the bones
Text: Alexander Lenin (Tokyo) In Japan, people are accustomed to multiply their savings in classical ways. Deposits with interest and investments in housing are still popular among the inhabitants of the Land of the Rising Sun.
The prosperous conditions of the local population allow them not to worry about the money given to the bank. The client, upon request, is guaranteed to receive all his savings up to a single yen.
People with good income purchase expensive apartments in new residential complexes for subsequent renting. This type of business is popular in Tokyo and some other large metropolitan areas of the country. The local housing market is stable and not subject to major fluctuations. There are also more than enough clients. Many families with a good income choose to live in rented housing, periodically moving to more modern apartments.
The Japanese are not devoid of a love of luxury and antiquity. Many retirees have amassed rich collections of paintings, coins or netsuke. Here is a matter of taste. Consistently high earnings allow the Japanese to immerse themselves deeply in a hobby that can bring high dividends over time.
Some Japanese conservatively invest in housing and deposits, others prefer gambling
Gambling is prohibited on the territory of the Japanese archipelago. Therefore, casino lovers travel to the Philippines or Macau. It happens that even novice employees of private companies can afford to fly there for the weekend. In Japanese cities, the pachinko slot machine halls are popular, where regulars compete in an unequal battle with the machine for a win.
Others have a preference for mahjong. Recently, an addiction to the game ruined the career of Tokyo prosecutor Hiromu Kurokawa. The prominent lawyer was forced to resign after it became known about his participation in several parties for money with friends-journalists.
Not afraid to take risks
Text: Ivan Kartashov (Brasilia) The Brazilian experience of hyperinflation in the 1980s and 1990s, when it reached 235 percent on an annualized basis, left a significant imprint on the country’s financial system. “Hyperinflation just wiped out the savings of the population,” ex-Brazilian Deputy Minister of Economic Affairs and former member of the Governing Council of the National Bank for Economic and Social Development, Raul Velloso, told RG. Then it became possible to open deposits for a very short time, up to one month or even a day. “
Today, when inflation in Brazil has reached low levels, short-term deposits have become less profitable, but have retained their popularity among the population. Savings deposits are in the greatest demand, interest on which falls into the accounts of Brazilians every month. But, since the Central Bank rate over the past year has decreased from 6.5 to 2 percent per annum, pulling down the profitability of deposits, now Brazilians are increasingly paying attention to riskier assets.
Deposit rates have decreased, so Brazilians are drawn to more risky assets
“This has led to the fact that over the past two to three years the number of investors in the Brazilian stock market among individuals has grown by 90 percent,” Eduardo Schroeder, founder of the Brazilian portal for teaching children financial literacy, told RG. most of the population lacks financial education. Brazilians are mostly not very worried about the use of credit cards, the penalties for delinquencies of which reach 400 percent per annum. This has led to the fact that many are in debt and are forced to constantly refinance. “