Fund Fees – 4 Tips To Help You Save. Many mutual fund companies charge investors high annual fees for managing their mutual funds. In case which actively managed funds, the cost of passive index funds is typically five to ten times the yearly cost. The performance of expensive products is correspondingly worse.

What consumers can do to reduce annual and further costs can be found in the following four tips for saving :


ETFs, i.e. exchange-traded index funds. These funds are not actively managed, but only track an index – for example, the German DAX stock index or the American S&P 500 index. At the same time, the investment companies usually do not pay any commission for the sale of ETFs. Result: The index funds are significantly cheaper than their actively managed counterparts. There are only issue surcharges with ETF savings plans when buying on the stock exchange; only a volume-dependent fee is due. And the running costs are often less than 0.5% per year. The downside: even if the prices are relatively low – there is also a lot of room for improvement with ETFs in terms of fee transparency. And there are also a variety of newly invented ETFs mapping unique indices.


You can turn to direct bank aid if you want an actively managed fund, to at least reduce the front-end load that is due on the purchase. Such direct banks do not have their own branch network, so customers usually conduct their business with the bank over the Internet. The banks pass on the resulting cost advantages, at least in part to consumers – for example, in the form of reduced or eliminated sales charges. Direct banks often also work with so-called fund brokers. These usually offer a wide range of investment funds with no sales charge. A little research when deciding for or against a bank can, therefore be worthwhile for consumers. Because: Even when it comes to buying ETFs on the stock exchange or via savings plans, direct banks usually offer better conditions.


If you buy active funds and don’t want to change your bank, you can at least try to negotiate with your own bank about the amount of the issue surcharge when buying funds. Particularly with more considerable investment sums, there may be a discount. However, this does not eliminate the high running costs of the funds.


Basically: Nobody should regularly change investment products – because often new fees are incurred when buying or selling a new investment. The withholding tax on capital gains is also due when a profitable investment is sold – and reduces the return achieved. Therefore: Even if the seller urges the bank to change a fund, nobody should be put under pressure.

The essentials in brief:

  • The change of the current account is always associated with effort. The old and the new banks are now obliged to help you with this.
  • It is usually cheaper to keep the account online. And the price comparison with entirely different banks/savings banks can also be financially worthwhile.
  • When looking for a suitable current account and switching independently, we will help with information, checklists and sample letters.

Many consumers are willing to switch banks. But how many of the bank customers ready to switch will put their plans into practice? Many people still shy away from taking the last step because they know that changing the current account always involves a lot of effort. Or because they don’t know that the old and new banks should help them.

Bank customers can save money by switching from their old house bank to a more cost-effective provider – because necessary fees, costs for bookings and payment cards and fees for withdrawals at third-party machines quickly add up to a proud amount.

Since September 18, 2016, bank customers have a legal right to have the previous bank and the new bank help them with changing their current account. You can find information on entitlement to accounting switching assistance in our corresponding article. Many institutes have already done this voluntarily. Of course, customers can still switch independently.


For those who value personal contact in a branch, a financial institution with its branch network is essential. For those who like to do banking via online or telephone banking, account management at a direct bank is the right choice.

It is usually cheaper to keep the account online. When it comes to withdrawing cash, you should make sure that you can withdraw money from numerous ATMs in the region as cheaply and efficiently as possible. Another critical question is how to best stock up on cash when you are abroad. Some banks now offer their customers the opportunity to withdraw money free of charge worldwide.


Our checklist “Criteria for Selecting the Right Current Account” clearly lists the most critical requirements for a current modern account. The best way is to compare the offers from several credit institutions and enter the points that are most important to you. It depends on you whether you value lower costs, an extensive network of ATMs or a branch in your immediate vicinity. But be careful: watch out for disadvantageous clauses, especially when it comes to incredibly cheap offers. For example, banks often require a minimum monthly incoming payment for free current accounts.


When you have found an offer that fits you, you should switch to a new bank or savings bank – unless you can convince your old institution to make you a better offer. The rule here is: asking doesn’t cost anything If you want to do without the change assistance and organize the move to the new provider yourself, our checklist “Step by step to the new current account” will help.

Correspondence with credit institutes and contractual partners: Our sample letters also make it easier for you to switch. With their help, you can cancel the old current account and inform your contractual partners – from employers to electricity providers – about your new bank details.

  • Sample letter for changing direct debit orders
  • Sample letter for informing the employer
  • Sample letter for terminating the old current account

Occasionally we receive complaints that banks close the account very quickly after sending the cancellation. Consumers could then no longer withdraw money, for example, and had no access to online banking. The reason for this because there are no or only concise notice periods for current accounts and the banks implement the cancellations very quickly.


  • First, open your new account and switch all payments (card payments, standing orders, direct debits, incoming payments from employers, etc.) to the new account.
  • Let the old and new accounts run in parallel for a while (approx. 3 months). Keep a smaller amount in the old version. This is a safeguard against charges that you no longer expected.
  • Do not cancel your old account until you have successfully switched.
  • You should know that you will no longer be able to access your data in online banking after the end of the contract. We recommend that you access and save all documents in good time, especially the bank statements. Otherwise, there is a risk of additional costs for the subsequent creation of the documents.

Dubious Investments On The Internet: How To Recognize A Pyramid Scheme. Great profit promises for small deposits: Pyramid schemes work by more and more people giving their money. But if the system stalls, the illegal business collapses.

The essentials in brief:

  • Pyramid schemes are illegal, but this kind of advertising is often used on the Internet with supposedly high profits.
  • Usually, they run out of breath quickly – and then only a few have made money.
  • We give clues on how you can recognize the forbidden mesh.

High yields and permanent “passive income”: so-called pyramid schemes are advertised with impressive profit margins – now mostly online. Questionable providers use terms such as “donation”, “retirement provision”, “marketing” or “crowdfunding” to advertise on social networks and the Internet.


Speedball systems are not designed for a long time. Only those who have started the whole thing and cash in on investments can benefit. Everyone else will likely lose their stake.

The consumer centres have complained about various providers from eleven federal states. Because of these complaints, the market watchdog finances took a closer look at the websites of over 50 providers: the imprint was missing in more than half of the cases. More than two-thirds of the Internet domains examined are registered abroad, several of them with the same box address in Panama. This makes it incredibly difficult for those affected to enforce their rights here.


The research by the market watchdog team also showed that alike under a post on Facebook is sufficient to be contacted directly by the provider. Cell phone numbers, for example, are exchanged via Facebook Messenger, which give access to WhatsApp groups. The market watchdog experts at the Hessen Consumer Advice Center, therefore warn against fraudulent offers that present themselves online as simple, reputable and high-yield investments.

TIP FOR YOU! Consumers are increasingly complaining about providers who lure them into dubious investments with deals in Bitcoins and other cryptocurrencies. The market watchdog experts at the Hessen Consumer Center are currently investigating complaints about almost 20 different providers and six currencies. Illegal pyramid schemes could also be hidden behind such offers.


A snowball system is a term used to describe business models that require a steadily growing number of participants in order to function, for whom you get a “bounty”, analogous to a snowball that rolls down the slope and expands steadily. Profits for attendees come almost exclusively from attracting new attendees who in turn, invest money without receiving any service or product. A rapid spread brings money into the system like a flash in the pan. But it is over just as quickly – the growth in new members cannot last long.


From the outside, pyramid schemes should look serious. The initiators are often veiled. In addition, it remains unclear at which stage the respective system is currently.

Since the number of participants would have to increase exponentially, the collapse is inevitable. So how do you know where not to invest money?

  • Do not trust supposedly brilliant business ideas that can be explained quickly. From the sofa, you cannot merely increase money on the computer by persuading other people to participate.
  • Usually, you should be able to start with relatively small amounts – a few hundred euros sound like a manageable risk.
  • Pyramid schemes are always designed to increase the number of participants sharply. You will be pushed to recruit many new members, for each of whom you will receive “bounties”.
  • Typical: A commission always goes to the initiator. In the end, he is the only real winner. Often it is not even clear what the money is being used for – then you should be particularly careful.
  • You should often be able to reach different levels or positions according to which your profit is based. Sole purpose: You should try to involve more and more people and their money.

Classification and perception of pension systems around the World. “Delevoye reform”, CSG applied to retirees, revaluation of the minimum old age … the retirement system in France is often the subject of debate. Through the analysis of 2 studies, this article takes stock of the situation in France compared to the rest of the world. The first assesses the quality of the system, the other the way in which workers prepare for retirement around the world.

Mercer ranking, France in the middle of the table

Mercer unveiled in 2018 a new edition of the Mercer Melbourne Index (MMGPI) which measures pension systems around the world. He analyzed 34 plans based on more than 40 indicators to try to determine their performance, sustainability and integrity.

The study reveals a growing tension in pension systems around the world in reconciling 2 objectives: ensuring an adequate standard of living for retirees (performance criterion) and guaranteeing the financial sustainability of the system (viability criterion). The integrity criterion, for its part, assesses the quality of governance and the control of management costs.

With an overall score of 80.3 out of 100, the Netherlands took 1st place from Denmark in 2018. That year, as in 2017, France is in the middle of the ranking. She is 17th out of 34, with an overall score of 60.7 (for an average of 60.5). It scores very well on performance (79.5), lower on viability (42.2) and integrity (56.5).

But the reforms planned at the time (Pacte law, Agirc-Arrco merger, comprehensive pension reform), which the 2018 study did not take into account, should improve its rating on the criteria of viability and integrity.

Assets unevenly prepared for retirement

HSBC published in 2018 the 15th edition of its benchmarking study on pensions, titled Bridging the Gap (“Bridging the Gap”). This study reflects the opinions of more than 17,000 people in 16 countries.

Internationally, the perception of retirement is generally positive. Most of those questioned of working age hope to find greater freedom (72%), open up to new hobbies (75%) and regain physical shape (59%). The French are more enthusiastic about the first 2 items (75% and 76% respectively), but less about the idea of ​​returning to sport (47%)!

53% of French people of working age associate retirement with tranquility. It is also synonymous with relaxation (38%) and happiness (33%). Only 12% associate retirement with a feeling of boredom.

Internationally, 58% of respondents intend to continue working after retirement. This trend is least represented in France (32%), against 60% in China or 48% in the United Kingdom. While globally, 42% of people of working age plan to embark on an entrepreneurial project in retirement, they are only 18% in France, compared to 36% in the United States and 54% in India.

If, globally, 26% of people of working age say they save regularly for their future life, 43% say they live financially from day to day: 28% in France, 54% in China, 44% in the United Kingdom).

Despite a significantly longer life expectancy than that of men, women are less well prepared for retirement. Globally, only 29% of women of working age say they contribute much more or a little more than their partner to the couple’s retirement savings. In France, they are only 13%.

Is the US economy on the rise, as Donald Trump claims? FACK CHECKING. Donald Trump is delighted with a rebound in the US economy six months after the onset of the health crisis. While the numbers do point to an increase in employment, there is no room for optimism. By Jeremy Ghez, HEC Paris Business School (*)

Donald Trump repeats over and over again that the economy is doing better and that the post-Covid recovery is here because of the “incredible work” done by his administration. “We had to close the economy because of the Chinese virus, but now we are reopening it, and our companies are breaking activity records”, he defended during the first presidential debate opposing him to Joe Biden on September 29. . According to Donald Trump, his administration put 10.4 million Americans back to work in just four months.

The rise in income and rebound in stock market values

The claim is correct: the figures, which come from the US Bureau of Labor Statistics, remind us that there has indeed been a turning point since May. They give hope that this historic recession may be short-lived.

This hope is fueled by other encouraging news about the state of the US economy. In 2019, before the start of the pandemic, the United States saw an increase in the income of the median American household – an increase that also benefited the poorest Americans. The current economic difficulties should therefore not eclipse the progress made, in favour of the poorest in particular – the result, say the supporters of Donald Trump today, of this administration’s efforts in terms of deregulation and the tax reform of 2017, which has enabled the private sector to invest and undertake again.

Added to this is the rebound in stock market values ​​which is boosting the morale of part of the population. In the second quarter of 2020, the value of Americans’ wealth saw a rebound of nearly 7% in the second quarter – the largest rebound in the history of the country. This rebound in the value of Americans’ assets contributes to optimism, at a time when the public debt is widening under the effect of the massive stimulus plan of the spring. We now know that some Americans have used the money they received from the federal government to invest in the stock market.

But this assertion on job creation is also misleading since according to the same source, 22 million jobs were destroyed in the spring of 2020, with the start of the pandemic. It also masks the fact that a certain number of jobs could have been permanently or even permanently destroyed. According to calculations by Indeed, an American recruiting firm, job offers in key states of New York or California are down 30% from 2019.

The end of the longest period of economic expansion

Other regions, which had experienced a short-lived upturn, are seeing the number of job vacancies drop again. The mobility of American workers, which once helped redress imbalances in the labour market, no longer works as before, as the pandemic has hit the country as a whole. The prospect of a lasting slowdown in job creation is more than plausible. Some sectors are particularly affected, such as the airline industry hit by new waves of layoffs since last week, or tourism, as shown by the layoff of 28,000 people at Disney.

In the end, UBS bank economist Brian Rose estimates that the number of Americans who have lost their jobs permanently could reach 5 million people. In October, the US economy created fewer than 700,000 jobs, a sign of an undeniable slowdown in the vitality of the labour market that has been observed since the turn of May. The effects of the stimulus plan, which widened the American debt are thus showing their limits.

This is why Donald Trump’s enthusiasm should not make people forget that the recovery could be difficult, as the uncertainty hanging over the economy is significant: the strategy of reassuring the public by relying on a massive stimulus plan is no longer bearing such fruit in a context of deep political divisions and a health crisis caused by a virus whose operation we do not really understand. Those who were hoping for a “V” shaped recovery, with a real and rapid rebound in the economy once health restrictions were lifted now fear the scenario of a “swoosh” recovery (the name given to the logo of a large sporting goods brand), with a very short-lived recession, but a rebound that was as slow as it was fragile.

Worse still, the prospect of a recovery in “K”: a part of the economy and the wealthy population, strong of its savings and relying on the stock market upturn, manages to pull out of the game, while other sectors and minorities, more vulnerable, see their lot durably affected by the effects of the health crisis. In particular, we can underline that the distribution and tech sectors have greatly benefited from the crisis, while the airline industry and tourism have suffered deeply. Figures from the US Census Bureau for food retailing and distribution confirm this. Likewise, the disconnect between the US consumer confidence index and the stock market rise suggests that this recovery may not benefit everyone.

The health crisis halted the longest economic expansion in US history. This officially ended after 128 months of growth – eight more than the previous record, between the cold war and the attacks of September 2001. Is this recession to be blamed on the executive? Or is it the result of an external shock, independent of the actions of the Trump administration?

What impact on the election?

The way in which the stake of this election will be formulated is fundamental: poll after poll, we see that Americans have a positive image of Donald Trump’s economic record, but remain more reserved in relation to his management of the crisis. A recent New York Times poll confirms this. And these perceptions are all the more important since, during the electoral campaign, the programs will have occupied very little center stage, as we could see during the first presidential debate. For this reason, if the economic record of the outgoing president returns to the heart of the campaign, the creation of 10.4 million jobs in the space of 4 months can favor Donald Trump. On the other hand, if the debate focuses above all on the management of the health crisis by the tenant of the White House and on the future of the health system, then the difficult and uneven recovery which does not benefit all Americans risks deeply affect his chances of re-election.

Retirement in the United States. The pension system in the United States operates on a pay-as-you-go basis. Every American worker is eligible for a basic retirement pension paid by US Social Security. In addition, American workers can also subscribe to occupational pension funds to which they contribute throughout their careers.

General Rules

The American retirement system

The “pay-as-you-go” pension system was put in place by Franklin D. Roosevelt with the Social Security Act of 1935. Called “Old Age Survivor Insurance” (OASI), this plan provides for automatic levy of a tax on the wages of employees and the income of employers.

At the same time, it is common for workers – most often managers who can afford it – to contribute to occupational pension funds. These allow them to supplement their retirement pensions and provide them with higher income than those received with the basic scheme. Therefore, 2 options are available to them:

-or they choose to let the employer directly take care of placing part of their salary in a private fund called the “defined benefit plan”;

-or they themselves invest part of their income in private funds called a “defined contribution plan” (such as 401 (k) or 403 (b)).

Note: the 401 (k) plan allows the employee to save by tax exemption on invested money and capital income which will be placed in an investment portfolio until their withdrawal. The 403 (b) plan is a similar system offered to employees of tax-exempt organizations such as hospitals or schools.

Following the recent financial crises and the increase in taxes on these plans, the use of defined benefit plans is less and less offered by employers.


A contribution is levied under the OASI at a rate of 12.40% (6.20% for the employer and 6.20% for the employee), under an annual ceiling of $ 132,900 in 2019.

Age conditions and insurance period

In the United States, a worker can retire at age 62. However, the age for obtaining a full retirement pension is higher. It depends on his year of birth. In the event of early departure, the pension will be subject to a discount of up to 32.5%.

Example: a person born in 1955 will receive his full pension at the age of 66 years and 2 months. If she decides to retire at the age of 62, she will only receive 74% of her pension.

Regarding funded pension funds, no age condition to benefit from them applies. However, penalties may be applied if the pensioner decides to receive them before he turns 70.

Retiree income

The calculation of the retirement pension

The amount of the basic retirement pension is calculated on the basis of the 420 best monthly earnings (ie 35 years), according to a progressive formula by income bracket. The replacement rate applied to the first tranche is 90%, it is 15% to the last tranche.

To claim the payment of the basic pension at the full rate, the pensioner must have obtained 40 “credits” (corresponding to the French quarters). To validate a “credit”, the pensioner must have earned at least $ 1,360 during the quarter in 2019. As in France (where this amount is € 1,504.50 in 2019), it is not possible to validate more of 4 “credits” per year.

It is possible for a pensioner who has reached the legal age to receive his retirement at full rate, to delay his retirement, and thus obtain a premium.

Combination of employment and retirement

It is not uncommon for American pensioners to continue working after the age of 62. The regulations on this subject take into account the income collected by this activity to determine the amount of the retirement pension.

Note: the income received does not take into account financial investments, various pensions, annuities, etc.

3 situations are considered:

When the pensioner has reached full retirement age:

The pensioner receives his retirement pension at the full rate, without limitation of income linked to a professional activity.

When the pensioner has not reached full retirement age:

The amount of the retirement pension will be reduced by $ 1 for every $ 2 of activity income over $ 17,640 received in the year (2019).

Example: Jacob receives a basic pension of $ 9,600 ($ 800 x 12 months) each year. At the same time, he has a job that earns him $ 28,000 per year, or $ 10,360 above the ceiling. His pension is reduced by 10,360 / 2 = $ 5,180. In total, he therefore earns 28,000 + (9,600 – 5,180) = $ 32,420.

When the pensioner reaches full retirement age within the year:

The amount of the pension will be reduced by $ 1 for every $ 3 of earned income above $ 46,920 received in the period before the full rate (2019).

Example: Susan will receive her full pension in August 2019. From January to July 2019, she will receive, for her retirement, $ 5,600 ($ 800 x 7 months). Over this same period, his professional activity will bring him $ 48,000, or € 1,080 above the ceiling. Until July, his pension will be deducted at 1,080 / 3 = $ 360. In total, she will earn from January to July 2019 48,000+ (5,600 – 360) = $ 53,240.

Survivor’s allowance (reversion)

When the pensioner dies, the surviving spouse can benefit from his retirement pension subject to having reached the legal age to benefit from the full rate pension. Otherwise, he will only receive a percentage of the deceased’s pension, depending on his age.

Example: the surviving spouse who is 60 years and 11 months old when the pensioner dies will only receive 75.2% of the deceased’s retirement pension.

Divorced spouse’s pension

The United States pension system provides that the ex-spouse can receive the retirement pension of the deceased pensioner as long as the following conditions are met:

-the marriage lasted at least 10 years;

-the ex-spouse has not remarried;

-the ex-spouse is at least 62 years old;

-the retirement pension that the ex-spouse receives or should receive is less than that of the pensioner;

-the pensioner is eligible for the basic pension scheme.

As soon as the ex-spouse has reached the legal age to benefit from the payment of his pension at the full rate, he may request the payment of half of the pensioner’s basic retirement pension.

What to remember about retirement in the United States

While the United States has had a basic pension system since 1935, most workers also contribute to occupational pension funds.

Contributions are 12.40% (6.20% for the employee and 6.20% for the employer).

The legal age is 62, but the age for the full rate depends on the year of birth. If applicable, the pension will be subject to a discount of up to 32.5%.

Americans validate 1 “credit” in the same way as the French validate 1 quarter: by contributing from a certain income ($ 1,360 in 2019), within the limit of 4 per year.

The combination of employment and retirement is unlimited if the retiree meets the conditions for the full rate. Otherwise, his pension will be reduced by 1/2 of the earned income exceeding $ 17,640 (if he reaches the full rate for the same year, the pension is reduced by 1/3 of the earned income exceeding $ 46,920 ).

Equities Questions And Answers About Dividends. The dividend belongs to the share like the interest to the fixed deposit. Companies that have managed to pay dividends to their shareholders over decades regularly are proud of it and advertise with it. Foundations and business families depend on their annual dividends. And it is also essential for many small investors.

What is a dividend?

The dividend is the part of the profit that a stock corporation pays out to its owners – that is, to the shareholders. That is why stocks are sometimes called equity securities.

How often is the dividend paid?

Most companies pay a dividend once a year. Others distribute part of their profit over the year – for example, they pay a dividend every quarter. Finally, there are those companies that don’t pay dividends at all. This may be because they are only not making a profit to distribute. But it can also be a strategy. Such a process can be useful for several reasons. One reason: the assumption that the money generates a higher return if you leave it in the company and use it for investments. Another: possible tax advantages for shareholders.

What types of dividends are there?

It is customary to distribute profits as a cash dividend: a predetermined amount is credited to the shareholder’s account for each share.

There is also the so-called stock dividend. “Stock” is the English word for share. A stock dividend thus describes the distribution of a dividend in the form of shares. Instead of cash in the account, a shareholder has additional shares of his company in his custody account after such distribution.

It is also possible to distribute material assets. This could be, for example, shares in a subsidiary that a company wants to spin-off. The shareholders then own two separate companies. Such a dividend is also known as a dividend in kind.

Who decides on the distribution of a dividend?

The owners themselves – at the annual general meeting of their stock corporation. Before that, however, the board will make a dividend proposal. Most of the shareholders agree to this proposal. Usually, the dividend is paid out directly on the day of the general meeting.

What do I have to do to have the dividend credited to me?

Nothing. It will be automatically posted to your account. It is possible, however, that you have to apply for the cash dividend to be exchanged for a stock dividend – if your company offers this option (and you want to take advantage of it).

Because of the dividend, is it worth buying the stock the day before the distribution and then selling it straight away?

No. The stock market cannot be tricked that easily. When the dividend is distributed, the share is traded “ex-dividend”, i.e. without the amount distributed. The share price falls accordingly. That is logical; after all, the company has less capital after the distribution – it sinks in value.

But maybe it is then worth speculating that the share price will fall because of the dividend distribution?

No, it’s not worth it either. Because the providers of warrants and certificates, with which private investors can speculate on falling prices, include the dividend payments in the costs of the speculative instruments. That means: Such papers do not rise because of the dividend distribution.

What is the dividend yield?

The dividend yield is a crucial figure for assessing stocks. It is obtained by dividing the amount of the dividend per share by the share price and multiplying the result by 100.

Many investment strategies place particular emphasis on dividend yields, and several funds invest in stocks with exceptionally high dividend yields. Even so, the fact that a stock has a high dividend yield does not necessarily mean that it is an enormously profitable investment: Market participants may expect the company’s profits (and thus dividends) to be lower in the future. Or, conversely, they expect companies that have not yet paid any dividends to make exceptionally high profits in the future and pass them on to investors. So there are many reasons not to (only) rely on this metric when buying stocks or equity funds.

Can I find information about the dividend on my shares?

The dividends paid in recent years are listed in various finance portals on the Internet.

Also, estimates of future dividends are often published. The calculations are based on forecasts by stock analysts. These should be enjoyed with caution; after all, nobody knows the future – not even the best-paid experts.

What do equity funds do with the dividends that are paid to them?

Equity funds collect dividends first. You then pass them on to the shareholders. This can be done through a distribution. In this case, money flows into the accounts of the fund owners. Or it can be done through an accumulation. In this case, the fund reinvests the dividends received, and the price of an individual share increases accordingly.

What are bitcoins?

Bitcoins: Shopping With Virtual Money. Bitcoins are a virtual means of payment. This digital currency was introduced by private individuals in 2009 and is intended to be an alternative to the conventional monetary system. Bitcoins are independent of governments and central banks. Instead, they are generated locally by computers using a cryptographic formula. Encryption techniques are used to make it impossible to copy or falsify this Internet currency. The total amount of electronic money is limited to 21 million units. Among other things, this is intended to put a stop to bitcoin inflation from the outset. However, the limit ultimately also means that not only people who see the new currency as a pure means of payment use Bitcoins but even speculators who hope for price gains from the digital currency.

At the beginning of August 2017, there was a division into “Bitcoin” and “Bitcoin Cash”. Ultimately, different views within the Bitcoin community led to the division. As more and more users are using Bitcoins, the technical processes that are supposed to make the transactions transparent and secure ensure that only around seven transactions per second are possible. In practice, it can, therefore happen that a transfer can only be carried out after several hours have elapsed. A group of developers is thus introducing “Bitcoin Cash”. A higher storage capacity should ensure faster processing.

In practice, this leads to a fork or split in the digital currency. Anyone who wants to pay with digital currency must in future pay close attention to whether they wish to do so with “Bitcoin” or “Bitcoin Cash”. And whether the online service through which the payment is to be made enables this. The further development and especially the impact of the division must be awaited.

With “Bitcoin Private” and “Bitcoin Gold” there were two more forks in October 2017 and February 2018, respectively.

Consumers are increasingly complaining about providers who lure them into dubious investments with deals in Bitcoins and other cryptocurrencies. The market watchdog experts at the Hessen consumer centre are currently investigating complaints about almost 20 different providers and six currencies. Prohibited pyramid schemes could be hidden behind such offers .

Acquisition of bitcoins

Bitcoins can be bought on individual exchanges at the current price. Alternatively, they can also be purchased by other users on certain trading platforms and marketplaces. Theoretically, interested parties can also make computing capacity available to generate the bitcoins and thus access the digital currency. Since, however, correspondingly powerful computers are required for this, this approach is usually ruled out.

How are bitcoins secured?

Technically, the encryption techniques mentioned are supposed to guarantee security; the virtual currency is not legally protected at all. Bitcoins, indeed, are not legal tender and are not controlled by any central bank, government or regulatory agency. So whoever buys Bitcoins is relying solely on trust? on the belief that someone else will accept this internet currency. However, there is no legal claim to this. If you want to use Bitcoins as a means of payment, you should make sure that the contractual partner also accepts Bitcoins before buying. For Bitcoins, there is neither deposit protection nor protection via a gold standard or any other security.

Anyone who views Bitcoins not only as a means of payment but also as a possible financial investment should therefore bear in mind that the capital invested in Bitcoins is generally at risk of the total loss.

Where can bitcoins be used?

From the basic idea, Bitcoins are primarily intended for online purchases. In the meantime, however, the digital currency is no longer only accepted by a few internet shops, individual service providers and retailers also use virtual money. Even though the adoption of bitcoins has increased over the years, the number of companies that accept this electronic money is still manageable. Users should, therefore, not be able to rely on being able to pay an outstanding amount with bitcoins.


The story began in 2009 when private individuals introduced Bitcoins as an alternative to traditional payment methods. After the first exchange rates formed in 2010, users were initially able to purchase Bitcoins for rates below ten US dollars. In 2013 the course sale took an adventurous course. After various price increases and decreases, the bitcoins reached a record value of over 1,200 US dollars in November 2013. Then a downward movement set in, with Bitcoins losing more than half of their value within a short time. Until the division into “Bitcoin” and “Bitcoin Cash” in August 2017, the digital currency finally rose to a rate of around 2,700 US dollars. In December 2017, the virtual currency rose to just under 20,000 US dollars in only a few weeks,

Bitcoins are not only traded in US dollars, but also other currencies such as euros or yen.

Massive price fluctuations

Bitcoins are not only characterized by significant price movements within a year. Significant fluctuations within a single day are also not uncommon. This shows an example of the development on the following two days: Anyone who invests in Bitcoins can more than double their invested capital in a short time, but conversely, they can also lose more than half. With Bitcoins, even a total loss is possible.

1. Be sceptical of salespeople

The Basics Of Investing. Bank advisors and other financial intermediaries are usually paid on a commission basis. So you are a seller. You must therefore assume that these advisors will only recommend products to you that the sellers make ample money on. Of course, this also applies to the savings bank advisor, even if he does not earn anything personally from the sale. Savings banks and Volksbanks also sell in-house products or products from third parties with appropriate sales cooperation and set sales targets for their employees. What can you do about it? Nothing. You can ask advice from other competitors who are also sellers and who may then suggest additional products to you, but that doesn’t exactly make it easier to make a decision. If you want to structure your own opinion, you can fall back on independent sources, for example, test reports from Stiftung Warentest and advice from consumer organizations.

2. Take a critical look at past performance

We know it: To sell you a product, you will be presented with beautiful graphics with upward curves. You are told that this has been the development so far, that it is a top grade paper with which you can practically only win.

ATTENTION! No expert in the world can predict how security will develop in the future. It has long been a well-documented truism among researchers that the forecasts of experts and analysts are minimum as often wrong as they are correct.

If someone says the opposite in the consultation, then you should get up and leave immediately. Such forecasts are only ever used for the sale of products and the constant switching of securities. They have nothing to do with serious advice, which should always value appropriate risk diversification.

3. Minimize costs and commissions

Costs and commissions reduce the return you can get from an investment. The costs are individual, and you always have to pay them, while interest income and favourable price developments are often uncertain.

Different costs arise depending on the investment product. You can find an overview of different product types in our guide Avoid unnecessarily high costs for financial products. In principle, you can negotiate commissions (also: donations). By the way, funds and other products still incur fees after they have been sold. You can find the annual fees in the so-called key investor information sheet (also: key information sheet, product information)under “Running costs”. Because of a sales follow-up commission, which the fund company pays to the bank, your bank will automatically continue to earn from you even after the sales pitch. In the case of closed investments, up to twenty per cent of the deposits disappear because of the costs, which then almost nullifies any prospect of positive income.

So look carefully and ask if in doubt. The cost burden is one of the most important criteria for assessing investment products. Even the brightest performance in the past and the rosiest forecasts for the future should not deter you from taking a sober look at costs. There are also cheap products with no commissions. But don’t expect a seller to recommend them to you.

4. Document what your investment advisor advises you

Most of the people cannot or do not want to look after their assets entirely independently and without advice. Many go to a bank or what is known as an independent consultant, who can and must also only sell products. Some even turn to fee advisors or robot advisors who are paid by the customer and do not earn anything from product sales.

Whoever you turn to, the advice remains a matter of trust. Anyone who needs advice doesn’t know any better than the consultant and can therefore not evaluate whether the consultant is doing his job well. A checklist with which you can inquire about qualifications, for example, does not help. If you want your trust, you should earn it. Make this clear to your advisor. This assumes that your advisor is 100 per cent behind what he said to you in the conversation.

5. Check your goals and strategies regularly

You have clarified your goals, obtained sufficient information and made an informed investment decision. And now?

As a rule, it makes no sense to reallocate your systems every few months, because it only creates new costs. An old stock market adage rightly states: “Back and forth makes pockets empty”.

Even so, you should check your finances regularly. Because life situations can change, unforeseen events can occur. After some time or after an inheritance, the focus may no longer be on the return, but above all on liquidity, because your plans have changed and you need to dispose of the money quickly.

The Basics Of Investing. Investing is a complicated subject. And one that poses many dangers for careless and inexperienced investors. Nonetheless, if you follow the simple rules of our little investment table, you will be well equipped to avoid the worst investment traps and invest your money successfully.

Here are the ten principles to keep in mind when investing money:

1. Make your goals clear to yourself

It sounds banal that you have to be clear about your goals before investing. An intensive examination of one’s own goals is by no means a matter, of course. But it is essential for good planning and the right decision. Take your time and write down what you expect from your investment – and from your life situation. Are you planning to make major purchases in the medium or long term? Are you planning to move, or do you want to start a family? Perhaps your professional situation is uncertain, or you are about to retire? Will you have higher or lower monthly charges in the future? Are you financially stable or is the overall situation uncertain and the future difficult to predict? Do you want to invest money once or would you prefer to save something monthly? Divide up your funds: do you want to invest part of it long-term and still have it available if necessary?

The investments must match your individual goals. So think about where your priorities lie: is it the high return, is it available at all times or is it absolute security? No investment can achieve these three goals at the same time. You can only expect high returns by foregoing availability or security.

2. Debt settlement has priority over investments

Before you invest, consider one thing: credit and debts are expensive. They generally cost more interest than you can get by investing the same amount. For you, this means that you should always try to reduce debts first before investing money elsewhere. Paying off loans and advances is usually the best investment you can make. Of course, some of the exceptions for it, as an example; when taxes lower the bottom line, which can be the case with rented real estate. Some old home loan and savings contracts offer returns of up to 4 per cent because of the bonus interest, and classic life insurance policies that were taken out up to 2004 have tax advantages and, depending on the provider, the guaranteed income after costs can still reach around two or even 3 per cent. Anyone who is debt-free and has a sufficiently high reserve also avoids over drafting the current account in the future if damage in the household or car needs to be replaced or repaired.

3. Insurance can protect assets

Certain events can have serious financial consequences. The most solid financial investment can vanish in no time if you are liable for damage to your own assets, for example. If you are the family leader and took after your family, you may not want to drive them into financial difficulties if they die unexpectedly or if they can no longer work due to illness or accident. Keep these risks in mind. Many of them are well protected in our welfare state, but not always to the extent that enables them to maintain the standard of living they are accustomed to.

Anyone who does not want to endanger the standard of living by the occurrence of certain risks can buy an appropriate insurance cover. Only you know which risks you want to cover and which risk protection you feel more comfortable with.

Also, consider how high insurance coverage should be. Do the surviving dependents have to be provided for until they retire, for example, or is five years enough because this period is sufficient to adjust to the new situation? Avoid rules of thumb and checklists that sellers like to use. Your personal needs are the only decisive factor.

4. Can and do you want to take risks?

If you take more risk, then it leads to higher returns. So the risk is not something that is bad per se. And security has its price, the yields are then simply lower, at the moment, with luck, you can just manage to compensate for inflation, i.e. maintain the purchasing power of your money. It is therefore crucial to dose the risk in such a way that you feel comfortable with it. The number of potential losses should be clear to you, and you should be able to handle them. With our online return calculator, you can get a feel for the income opportunities and risks of different investments. It is vital to know and note that this only applies if you invest widely in stocks. More on this in the next step. In connection with the personal willingness to take risks, the risk-bearing capacity is also important. Because not everyone who would like to have a higher return can also afford a higher risk due to the life situation. Anyone who has to live with the assets should generally avoid fluctuations in value unless the assets are so large that the fluctuations are irrelevant.

5. Spread the risks

Regardless of whether you want to invest a large amount of money one-off or just a small monthly savings contract: spread the risks! Capital markets always harbour risks, even if the newspapers paint a bright future. Stock prices can always collapse, and interest rates can turn at any time. But don’t confuse risk diversification with simply buying multiple products. Those who only have savings bonds, overnight money and bank savings plans do not spread the risks! Rather, what matters is the asset class that you represent with the product.


  • Participations in companies, in the form of shares or, even more widely, in the form of global equity index funds (ETFs). You can find out how this works and how you can use index funds (ETFs) here.
  • Debt, often called monetary assets. All loans fall into this category, including overnight money, savings bonds, government bonds and pension funds. Classic life insurances also fall into this category, as they mainly buy debt securities from governments and banks.
  • Real estate, in the form of your own home, rented property or in the form of open real estate funds and real estate investment trusts (REITs), which also offer access to this asset class for small amounts. Beware of closed real estate funds.
  • Speculative values ​​, such as raw materials or precious metals. These investments offer no interest, and their performance is highly uncertain. However, gold is probably one of the oldest means of payment of mankind, and every paper currency (category: debt) has survived. Information on investing in gold can be found here.

The asset classes usually develop differently. For example, when stocks tend to weaken, bonds have often been ahead in the past – and vice versa. When the value of stocks and debt collapsed worldwide during the financial crisis, the gold price boomed. Spread your assets across all of these asset classes, then you practically eliminate the risk of total loss and stabilize the total return. The spread of risk is also called diversification.

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