.

[Lyssa]

Trying to get back on topic:

I've always wondered where the German fear of equities came from. Hyperinflation is a national trauma (very present in our subconsious, I'd say about on par with Nazi Germany and WWII. Yes, I'm serious, it's that bad.), but I never understood how one translates the German Angst of inflation into affection for cash accounts and insurances. Equities and commodities would be the obvious better choice. It's a complete mystery to me.

[shrnjad]

I guess for most people in Germany buying shares equals going to the casino, at least for everyone I know. And I would even agree with it, if we are talking about buying individual shares and expecting to make a profit from them.

Virtually nobody has ever heard about index-funds, including me. MMM was a huge eye-opener considering this.

Also, it is not a popular topic and most people do not show any interest in it.

The other day I told a girl at work that I was reading a blog about stocks and investing (j collins stock series) and she looked at me in shock. Like she wanted to say, 'I thought you were such a nice guy' :D :D

[forummm]

It is interesting that people whose grandparents weren't even alive in the hyperinflation 1930s are so afraid of inflation 80+ years later. The hyperinflation was a byproduct of world war. And also odd that a populace so afraid of inflation would put all their money in bonds. Those two ideas do not seem to go well together.

[Zinsch]

I don't think it's inflation fear why they don't invest in stocks.
Lack of knowledge of how it actually works and fear of the volatility are bigger drivers in my opinion.

[Lyssa]

The other day I told a girl at work that I was reading a blog about stocks and investing (j collins stock series) and she looked at me in shock. Like she wanted to say, 'I thought you were such a nice guy' :D :D

This. You're not only considered a bad decision maker but a morally questionable person if you announce publicly that you're invested in the stock market. I think this is indeed a somewhat socialist element of German society: investing and speculating is considered one and the same activity and only vultures would engage in it. You might (!) be considered a good guy again if you loose money and claim victim status but successful investors are considered cheaters and frauds on some subconsious level.

While German society won't let you fall as deeply as e.g. the U.S., there is also the darker side of not wanting to see you climbing too high. Sure, go to school, have good grades, work your ass of, make good money, build a home and leave your children said house and some money on top. But letting your money work harder than yourself and either retire in your 40ies or become a multimillionaire and jump several classes upwards in just one generation? That's not viewed as success but as suspicious and probably criminal.

[Kris]

To be a little bit fair, it's worth remembering that average Americans didn't participate in the stock market at all, through mutual funds or anything else, until relatively recently.  My parents, who would be in their eighties now, never would have dreamed of investing in an index or mutual fund, let alone an individual stock.  That shift has happened relatively quickly, generationally speaking, and probably wouldn't have happened if corporations hadn't started pushing against offering having to offer pensions to retirees.

[Bracken_Joy]

While German society won't let you fall as deeply as e.g. the U.S., there is also the darker side of not wanting to see you climbing too high. Sure, go to school, have good grades, work your ass of, make good money, build a home and leave your children said house and some money on top. But letting your money work harder than yourself and either retire in your 40ies or become a multimillionaire and jump several classes upwards in just one generation? That's not viewed as success but as suspicious and probably criminal.

Now this is getting into some VERY interesting territory, IMO. I wonder how viable FIRE is in Germany then- would you be socially isolated as a result? To me, FIRE would not be worth it if I were perceived as a pariah.

[Lyssa]

While German society won't let you fall as deeply as e.g. the U.S., there is also the darker side of not wanting to see you climbing too high. Sure, go to school, have good grades, work your ass of, make good money, build a home and leave your children said house and some money on top. But letting your money work harder than yourself and either retire in your 40ies or become a multimillionaire and jump several classes upwards in just one generation? That's not viewed as success but as suspicious and probably criminal.

Now this is getting into some VERY interesting territory, IMO. I wonder how viable FIRE is in Germany then- would you be socially isolated as a result? To me, FIRE would not be worth it if I were perceived as a pariah.

Well, I'm not known to care a lot about what the neighbors say anyways... But even I am probably going to make up some 'I cut back a lot after some terribly busy years and now do some freelance ...' story. 'I diligently saved, invested and now live on passive income' would not go very well with 98% of Germans. Interestingly, 'I inherited some real estate and live of the rents' does go a lot better. In that case, you're envied and perhaps considered a little lazy but not downright shady. Perhaps I should make up a rich, recently passed away relative. :-)

[forummm]

To be a little bit fair, it's worth remembering that average Americans didn't participate in the stock market at all, through mutual funds or anything else, until relatively recently.  My parents, who would be in their eighties now, never would have dreamed of investing in an index or mutual fund, let alone an individual stock.  That shift has happened relatively quickly, generationally speaking, and probably wouldn't have happened if corporations hadn't started pushing against offering having to offer pensions to retirees.

That's a really good point. Investing in stocks used to sound dumb and risky in the US until recently. But now we have no choice, so it's become more accepted. "Everyone" (meaning most people) has a 401k--even if there isn't much in it.

[NICE!]

Yeah good point about Americans not trusting the market until recently. My grandparents wouldn't/won't invest in anything other than t-bills.

[Reepekg]

This. You're not only considered a bad decision maker but a morally questionable person if you announce publicly that you're invested in the stock market. I think this is indeed a somewhat socialist element of German society: investing and speculating is considered one and the same activity and only vultures would engage in it.
...
While German society won't let you fall as deeply as e.g. the U.S., there is also the darker side of not wanting to see you climbing too high. Sure, go to school, have good grades, work your ass of, make good money, build a home and leave your children said house and some money on top. But letting your money work harder than yourself and either retire in your 40ies or become a multimillionaire and jump several classes upwards in just one generation? That's not viewed as success but as suspicious and probably criminal.

This is really interesting. Having moved back to the US (from DK) for a few years, I got in contact with a former boss and close friend who is German. As the best engineer I've ever met, I thought he would enjoy the type of optimization of the capitalist system MMM represents, and I presented it in those terms. I was a little surprised his reaction was almost... suspicious? distrustful? Maybe this cultural factor accounts for it.

At the end of the day, he's knows I'm a crazy American, so we're still friends.

[Chuck]

While German society won't let you fall as deeply as e.g. the U.S., there is also the darker side of not wanting to see you climbing too high. Sure, go to school, have good grades, work your ass of, make good money, build a home and leave your children said house and some money on top. But letting your money work harder than yourself and either retire in your 40ies or become a multimillionaire and jump several classes upwards in just one generation? That's not viewed as success but as suspicious and probably criminal.

Now this is getting into some VERY interesting territory, IMO. I wonder how viable FIRE is in Germany then- would you be socially isolated as a result? To me, FIRE would not be worth it if I were perceived as a pariah.

Well, I'm not known to care a lot about what the neighbors say anyways... But even I am probably going to make up some 'I cut back a lot after some terribly busy years and now do some freelance ...' story. 'I diligently saved, invested and now live on passive income' would not go very well with 98% of Germans. Interestingly, 'I inherited some real estate and live of the rents' does go a lot better. In that case, you're envied and perhaps considered a little lazy but not downright shady. Perhaps I should make up a rich, recently passed away relative. :-)

You could have a lot of fun with that. Make sure the story is appropriately outrageous.

"My Great-Uncle Karl died and decided to leave me his shrubbery farm. I'm now a shrubberdash."

[brainfart]

A pretty successful reality TV show in Germany is centered around Robert Geiss and his trophy wife Carmen. An entrepreneur who barely finished high school, made shitloads of money with his clothing business, sold it all and moved to Monaco to enjoy the jet set lifestyle involving expensive cars, yachts, private jets and helicopters and so on. They are quite obviously spending millions every year but there seems to be no envy whatsoever.

[Lyssa]

A pretty successful reality TV show in Germany is centered around Robert Geiss and his trophy wife Carmen. An entrepreneur who barely finished high school, made shitloads of money with his clothing business, sold it all and moved to Monaco to enjoy the jet set lifestyle involving expensive cars, yachts, private jets and helicopters and so on. They are quite obviously spending millions every year but there seems to be no envy whatsoever.

They managed to accede to a VIP-trash status beyond moral judgments or envy. I suspect that by now most of their money comes from their trash TV show. Generally, most rich Germans keep a rather low profile. When one of our richest women, Susanne Klatten, fell victim to a marriage-imposter a few years ago there was a great mismatch between her reported activities and treats and the boxes of cash she had handed over to him.

[belgiandude]

While German society won't let you fall as deeply as e.g. the U.S., there is also the darker side of not wanting to see you climbing too high. Sure, go to school, have good grades, work your ass of, make good money, build a home and leave your children said house and some money on top. But letting your money work harder than yourself and either retire in your 40ies or become a multimillionaire and jump several classes upwards in just one generation? That's not viewed as success but as suspicious and probably criminal.

Now this is getting into some VERY interesting territory, IMO. I wonder how viable FIRE is in Germany then- would you be socially isolated as a result? To me, FIRE would not be worth it if I were perceived as a pariah.

Well, I'm not known to care a lot about what the neighbors say anyways... But even I am probably going to make up some 'I cut back a lot after some terribly busy years and now do some freelance ...' story. 'I diligently saved, invested and now live on passive income' would not go very well with 98% of Germans. Interestingly, 'I inherited some real estate and live of the rents' does go a lot better. In that case, you're envied and perhaps considered a little lazy but not downright shady. Perhaps I should make up a rich, recently passed away relative. :-)

The same is valid for Belgians.

[Lyssa]

While German society won't let you fall as deeply as e.g. the U.S., there is also the darker side of not wanting to see you climbing too high. Sure, go to school, have good grades, work your ass of, make good money, build a home and leave your children said house and some money on top. But letting your money work harder than yourself and either retire in your 40ies or become a multimillionaire and jump several classes upwards in just one generation? That's not viewed as success but as suspicious and probably criminal.

Now this is getting into some VERY interesting territory, IMO. I wonder how viable FIRE is in Germany then- would you be socially isolated as a result? To me, FIRE would not be worth it if I were perceived as a pariah.

Well, I'm not known to care a lot about what the neighbors say anyways... But even I am probably going to make up some 'I cut back a lot after some terribly busy years and now do some freelance ...' story. 'I diligently saved, invested and now live on passive income' would not go very well with 98% of Germans. Interestingly, 'I inherited some real estate and live of the rents' does go a lot better. In that case, you're envied and perhaps considered a little lazy but not downright shady. Perhaps I should make up a rich, recently passed away relative. :-)

You could have a lot of fun with that. Make sure the story is appropriately outrageous.

"My Great-Uncle Karl died and decided to leave me his shrubbery farm. I'm now a shrubberdash."

But of course I would trade it all for just one more day with my dear uncle Karl... :-)

I should use my pre-FIRE time to improve my acting skills...

[lovesasa]

This is a really interesting thread, and I want to thank everyone who shared their experience(s) in Germany (and Switzerland and Belgium). I learned a lot and will probably come back to re-read this.

I lived in Germany (former East) for a year in high school and have a lot of German friends, so I thought I had a pretty good understanding of German culture. One thing that I have high respect for is that all of my German friends seem to be very hard working and have pretty solid heads on their shoulders, especially financially. Debt-averse, high savings, etc. in stark contrast to most Americans I know.

So I was pretty shocked the other day when I casually mentioned at dinner that I had opened an investment account. Everyone at the table stared at me like I was crazy, including the Mexican girl who had joined us. To their credit, everyone asked a few questions and didn't completely jump down my throat, but none of them had ever heard of an index fund and they pretty much to a person tried to talk me out of it. One commented on her safe investments in gold... Talk about a huge cultural gap.

My German roommate who is a bit more financially savvy (MBA, entrepreneur of a software company) has even had a highly skeptical reaction, even though we tend to agree on a lot of other personal finance matters. I mentioned to him I was excited I had seen some gains this week, and he just commented that it's always fun to see it go up, but not to see it go down. Which of course is true, and is part of the reason I decided to use a robo-advisor allocation so it's difficult for me to mess with. For now I'm just checking because it's fun, and it's giving me an incentive to continue putting savings into my diversified index portfolio rather than having it sit safely in my savings account (ok, maybe I act a little bit German sometimes).

This thread has been incredibly helpful in understanding my friends' reactions.


Re: Health Insurance
On a slightly related note, the downside to the German insurance system is that it doesn't cover you abroad unless you are a student. My expat friends have had to find separate private insurance, in addition to having to pay 50 Euros a month just to have the option to get back into the government system. This seems a bit ridiculous/unfair to me.

[WerKater]

A pretty successful reality TV show in Germany is centered around Robert Geiss and his trophy wife Carmen. An entrepreneur who barely finished high school, made shitloads of money with his clothing business, sold it all and moved to Monaco to enjoy the jet set lifestyle involving expensive cars, yachts, private jets and helicopters and so on. They are quite obviously spending millions every year but there seems to be no envy whatsoever.

This is totally off-topic, but right now I am somehow extremely proud of myself because I had never had heard about Robert Geiss before.

On-topic: I can confirm what many here have said about hostility to stock market investment. Completely mirrors my experiences. In fact, I never mention that I have an Index Fund Portfolio to anyone anymore, unless they specifically ask.

[WerKater]

While German society won't let you fall as deeply as e.g. the U.S., there is also the darker side of not wanting to see you climbing too high. Sure, go to school, have good grades, work your ass of, make good money, build a home and leave your children said house and some money on top. But letting your money work harder than yourself and either retire in your 40ies or become a multimillionaire and jump several classes upwards in just one generation? That's not viewed as success but as suspicious and probably criminal.

Now this is getting into some VERY interesting territory, IMO. I wonder how viable FIRE is in Germany then- would you be socially isolated as a result? To me, FIRE would not be worth it if I were perceived as a pariah.

Well, I'm not known to care a lot about what the neighbors say anyways... But even I am probably going to make up some 'I cut back a lot after some terribly busy years and now do some freelance ...' story. 'I diligently saved, invested and now live on passive income' would not go very well with 98% of Germans. Interestingly, 'I inherited some real estate and live of the rents' does go a lot better. In that case, you're envied and perhaps considered a little lazy but not downright shady. Perhaps I should make up a rich, recently passed away relative. :-)

You could have a lot of fun with that. Make sure the story is appropriately outrageous.

"My Great-Uncle Karl died and decided to leave me his shrubbery farm. I'm now a shrubberdash."

But of course I would trade it all for just one more day with my dear uncle Karl... :-)

I should use my pre-FIRE time to improve my acting skills...

And when you have your story worked out, please post it here ;)
I am sure we can help to improve it and maybe steal some parts for ourselves.

[DaKini]

in addition to having to pay 50 Euros a month just to have the option to get back into the government system. This seems a bit ridiculous/unfair to me.

To me, it sounds unfair to not pay a system and then, when the personal risks increase, switch back to the cheaper goverment system and take claims there.
Health risks are rising with age and somare private premiums.

Also note, that you can of course be in the government health system and add private insurance only for the abroad coverage (what i do in fact and which isnfairly cheap, about 10 € per year).

[Moonwaves]

So I was pretty shocked the other day when I casually mentioned at dinner that I had opened an investment account. Everyone at the table stared at me like I was crazy, including the Mexican girl who had joined us. To their credit, everyone asked a few questions and didn't completely jump down my throat, but none of them had ever heard of an index fund and they pretty much to a person tried to talk me out of it. One commented on her safe investments in gold... Talk about a huge cultural gap.

My German roommate who is a bit more financially savvy (MBA, entrepreneur of a software company) has even had a highly skeptical reaction, even though we tend to agree on a lot of other personal finance matters. I mentioned to him I was excited I had seen some gains this week, and he just commented that it's always fun to see it go up, but not to see it go down. Which of course is true, and is part of the reason I decided to use a robo-advisor allocation so it's difficult for me to mess with.

This is very true. My boss was telling me a few weeks ago about a stock she had invested in following a tip from someone or other, that her bank advisor had tried to recommend against buying. Her tale was mostly about how she told her bank advisor to basically do what he was told and not be bothering her with his silly ideas of where her money should go, to be honest. But since we were on the subject of investing I mentioned that I had just opened up my first investment account and how I would be starting a savings plan for a small amount a month investing in index funds. Cue a look of shock on her face and an earnest entreaty to be very careful because index funds can go down a lot and it'd be better to wait until we've seen what will happen with Greece before investing in such a thing. I didn't even bother tryng to get into it and just said that since I'd be investing for at least 20 years, there was a good chance I'd come out ahead and left it at that.

[Landlord2015]

This is not valid only for Germany.

It is whole Europe is less interested in stocks then USA for sure. I am not sure about Canada, but I suspect they like stocks in Canada much more then in Europe at least.

I am from Finland and I have 3 investment ideas and NONE of them has anything to do with investment funds and such.

Finally I am not criticizing 401K etc but the pension model is simply different in Europe then in USA. What I mean that IF I would live in USA I would most likely use 401K and other pension systems and mutual funds.

You know I might have soon invested more then 500 000 dollars real estate value, but have no whatsoever interest in stocks and mutual funds.

However world is grey and nothing is perfect. It mean if you like stocks and mutual funds then go for it.

[NICE!]

You know I might have soon invested more then 500 000 dollars real estate value, but have no whatsoever interest in stocks and mutual funds.

Why not? There is a wealth of academic literature that suggests stocks are an incredible long-term investment. I'd say they should comprise at least a portion of anyone's portfolio.

[WerKater]

You know I might have soon invested more then 500 000 dollars real estate value, but have no whatsoever interest in stocks and mutual funds.

However world is grey and nothing is perfect. It mean if you like stocks and mutual funds then go for it.

If it works for you, great. Real estate can be a good investment as many members of this forum show. What is your average return on your real estate investment? Do you manage your properties yourself?

[tarantoga]

A big factor is the "T-Aktie" saga. "Deutsche Telekom" was privatized and IPO'd in 1996 if I remember right.
I lived my first 30 years in Germany up to '99; and during the IPO and afterwards the Telekom-Shares were pushed heavily as "Volksaktie", by all kinds of celebrities, politicians, and of course banks.

You can guess what happened - it shot up multiple times up to early 2000. Almost 2 million people became shareholders that never owned shares before. Few of them diversified. Then it crashed 90% after the peak, and never really recovered much, despite the "Deutsche Telekom" still being a major company.
It turned millions people away from ever owning shares again.