Scale generation is a scam
Protect yourself and your children from generation fraud. The whole world is talking about climate change, especially the young generation of “Fridays for Future”. So far we can understand that very well. A very important topic that has been ignored for far too long and thus jeopardizes the future of our children.
In addition to the climate debate, a no less important topic is emerging, largely unnoticed. Demographic change and generation fraud. Unfortunately, very few talk about it, even though it is about one's own prosperity, jobs and a financially carefree life in old age.
The Generational Fraud since 1957
The pay-as-you-go pension system has existed since 1957. I.e. the young take care of the old. That worked pretty well in the past. Why? For every 100 people of working age there were 16 people of retirement age. Say 1: 6. A very healthy relationship.
Today, on the other hand, 100 workers have to provide for 36 pensioners and by 2060 even 60 retirees. From a ratio of 1: 3 today, 2 employees will have to look after a pensioner by 2030. At this point at the latest, the pay-as-you-go system comes under considerable pressure. The children that we would then need to look after the elderly were unfortunately never born.
100 billion euros support
Protect yourself and your children from generation fraud. Already today, around 100 billion euros, around a third of the federal budget, are forced into the pension fund because there is not a cent in reserves. No politician dares to speak the truth and pull through a real pension reform. Re-election seems more important than the future of our children!
The weakness of the system, coupled with demographic change, cannot be stopped by immigration. The Bundesbank estimates that the contribution rate to the statutory pension insurance is likely to increase from 18.5% to 31% by 2070 without fundamental reform. Not good news for all employees and especially for the 2000s.
Retiring at the age of 67 or 69 is not even rudimentary for this generation. Poverty in old age will definitely hit normal earners and the middle class, and that's millions of Germans. This can already be felt now and painfully from 2030 at the latest.
You can read what scientists are saying about the future of our German pension system in our FinanzWiki.
Where there is shadow, there is also light. So it is too early to throw the gun in the grain. There are solutions. One is education in general and financial education in particular.
Unfortunately, finance and economics is usually very low on the popularity list with both high school students and adults. Most of them are more concerned with vacation, cars and other things, instead of finally packing on this essential topic. After all, this is about nothing less than a carefree life in old age.
In schools in particular, one would have to firmly integrate the 1 × 1 of financial investments and economic relationships into the lessons in order not to develop a new generation of savings accounts and life insurance, which can only be proven to be of use to the financial sector. Because these people are the big losers of the zero interest rate policy and unfortunately mostly also their children. Only those who can give themselves a push and deal with the matter will increase the level of knowledge and make sensible, financial decisions that point the way for the whole family.
Wake up and find out more!
On the other hand, the financial industry has largely failed to explain complex financial topics in a way that everyone can understand. We, at Professor Money, have made it our mission to pass on the often annoying topic of investing simply and without technical terms and to help with its implementation. Help spread the word. It's about time.
Does the black zero hold?
Our finance minister Olaf Scholz, who praiseworthy pats on the shoulder for getting the black zero, unfortunately does not contribute to more financial education either. Because the black zero is a consequence of the ECB's zero interest rate policy. This is the only way to save Germany billions in interest that would have to be paid in a normal interest rate environment. Federal interest expenditure has fallen by 73%, the equivalent of € 29 billion, since the financial crisis. In addition to the bubbling tax revenue, many are wondering where all the money that should be invested in the necessary infrastructure and education has gone. We can't even make calls on the train without a break! Yes, digitization and the associated network expansion, among other things, seems to be at the bottom of the agenda.
Just like a restructuring of the social security systems. As can be seen, our government is apparently more concerned with maintaining power and personnel issues than with the really essential issues. Although the solutions are literally ahead of us.
Norway, for example, has the largest sovereign wealth fund in the world with around 1,000 billion euros. This is invested worldwide in a wide variety of asset classes, mainly stocks. If stocks were only a pure and high-risk object of speculation, then a solid, economically viable state would certainly not invest the retirement provisions of its own population there. The Norwegians, or also the Swedes, understood. Unfortunately we don't (yet).
So the most sensible thing to do is to take care of it yourself. And that starts with financial literacy.
What does that mean for your investment?
Protect yourself and your children from generation fraud. Initiative is required. Those who remain inactive will in the end be among the losers. But everyone has it in their hands and can make new decisions every day. We at Professor Money want to provide impulses on the subject of investment and economic understanding. Short, concise and without technical terms.
Take the first step and find out more. In small bites.
With our pension calculator you can work out how much money you will lack later and how much assets you will need to enjoy a carefree retirement.
Do you like our money tips? Then pass that wake-up call on to a friend or two. Help us to achieve prosperity through more financial education. For you and your loved ones.
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Your team from Professor Money,
Sandro Fetscher & Christian Schüller
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