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Vacation is over and I am back to Thailand from Europe with plenty of interesting impressions.

One, most pressing to me, was my impression from Germany, and specifically Berlin. I walked through literally half of the city and let me just say this: There is no refugee issue in Berlin. The city is not more or less international than in the past, with all the accompanying benefits and issues. Again, not more and not less than in the 18 years I spent there up until 2009. If you grew up in the city, then you hardly notice any difference.

Same goes for Hamburg, even though I lived there only for a couple of months.

Second thing, Poland is catching up and becoming a great place to be. I visited 2 cities: Wroclaw and Krakow. Both were extremely impressive and way beyond what I remember from my childhood. Well, to complete the picture: It was 2 cities and 1 village. And all of them looked great.

Only one strange thing: People in Poland are still not very familiar with foreigners. There was a funny incident when my family and I went to a children’s playground in Krakow. At some point, 2 kids came up to my wife just staring at her. My wife (she is Thai) asked them in English if there is anything she can help them with, but they were just giggling and ran away when their parents called them. The parents apologized and just mentioned that they never saw an Asian at the playground… You see Asians in Poland as tourists, but not many actually living there and visiting a park or a playground for children. My wife felt slightly uncomfortable at times, but not too often and overall we had a great stay there.

I am traveling for studies and work since 2007. Every year or two, I change the city, the country, and sometimes the continent. The notion that despite the internet, TV and the ever-increasing migration trends worldwide, people would still feel surprised to see someone from another country… it kind of really hit me. We all have still a long way to go…

Well… things do get better.

Retirement woes – Reality is catching up

I am currently on vacation and enjoying some quiet time with my family & friends in Germany and Poland. Last week, my moms best friend came by, we had a cup of tea and overall a great time as she had the pleasure to get to know my little daughter for the first time.

My mom is 62 years old, her friend is of the same age. As usually at some point, topics diverted towards the small pains in life. Recent doctor visits, some gentle gossip about who passed away within their circle of friends and neighbors – and their expectations towards retirement.

Obviously, especially the last part caught my attention and I got to say that I was truly shocked to learn about what my parents’ generation is expecting to receive once they go the step and retire at legal age.

My parents (and their friend) had simple lives, with regular jobs and learned, studied, worked basically without any breaks since they finished universities. They hardly took vacations and are true masters in frugal living. And yet, they won’t even receive 20.000 EUR a year COMBINED after turning 65. That’s less than 10.000 EUR per person per year and even less than 850 EUR a month per person.

How far do you get with this kind of money?

Not very far. Not only do they have to pay more to cover medical expenses than in the past, but inflation also forced them to get creative and increase their frugal living efforts to a point that I think even them couldn’t imagine in the past.

A cappuccino costs 3 EUR. A pizza around 8 EUR. A pack of 1 kg of fresh strawberries is 6,50 EUR. Oh yes, and the rent for a 2-bedroom apartment is now about 1000 EUR a month in Berlin. So after paying rent, utilities and medical, they will hardly be able to afford 1 cappuccino a day for 2 persons.

That’s rough.

Is this the norm? Probably not. But it’s not an exception. And the new generation of AirBnB hosts, UBER and Lyft drivers and working vagabonds who live by blogging or social media activities need to truly understand the significance of what can and ultimately will happen if one doesn’t start early to work on his/her finances and prepare for retirement.

I hate to break the news but there is simply no way around investments!

We all get old, there is no way around. We all will get to a point that we can’t or don’t want to blog, to drive a car or to share our apartment or house with someone else. Be it for the lack of mental or physical capability or in general for security & safety reasons. We all will get wrinkles and lose our Instagram followers to a 6-packed yoga pro who is traveling the world while we may be fighting with the stairs in our house or condo.

So how are you going to push up your rent, at least to a point that this 1 cappuccino a day won’t hurt you?

  • Saving accounts? Offer not enough even to balance inflation.
  • Government bonds? That’s a zero game at this point.
  • Renting out a house or a condo? Might be an option but you still got to take care of it to ensure payments keep coming. And the older buildings get, the more issues you will have which will bring down your margins and require you to keep a constant eye on it.
  • Buying a house for your personal use? It will reduce your costs but it won’t pay any bills.

There is simply no way around it. Investing needs to be a part of your retirement strategy.

People who are not familiar with investing in the stock market, often argue that they don’t consider the stock market to be safe. They consider it to be risky. But they have to realize: We are already at a very high risk. And for some, it’s almost too late.

This is a topic that should be taught in schools, it’s significance can’t be emphasized enough. In the meantime, a retirement crisis is looming on the not too distant horizon and it may very well become what will trigger the next crash or even a major financial crisis. Let me be an oracle on this one.

What happened to banks?

My vacation is coming to an end, and I had the opportunity to meet friends, old colleagues, new potential colleagues (in case I decide to return to Berlin someday) and re-visit all my favorite places. I admit, it might be a cheesy thing to do but there is this kind of nostalgia coming up every time I am here which is hard to resist.

Since I am investing in German stocks (among others) I was also wondering to see some signs for any economic changes, and I found 2 interesting points that I would like to point out here.

  1. Shopping centers are more popular than ever. It seems the global trend of setting up large shopping centers and design them to become the place to spend your free time at, is also a thing in Germany. It seems that new shopping centers are popping up everywhere and they are constantly full. I also got to say that they are set up in a pretty creative manner, with interesting areas for adults, children, regular events like mini-concerts or dancing competitions, singing performance, etc.

    So what is my takeaway from this? Real Estate Market is booming, hence investing in mall REITs (Real Estate Investment Trusts) doesn’t seem like a wrong idea.

  2. Banks are disappearing – everywhere. I had my first bank account in my life at a local government-run bank which operates under the name “Sparkasse”. I would say, that this was always the least modern and least preferred choice among banks that I could choose from when I was a student and while it had branches all over town, so did its private competitors. Not so this time. In fact, in the street where I used to live, all private banks disappeared. The only bank branch in a radius of 4 km is, you guessed it, a Sparkasse.

    And not only this, even the few ATMs of other banks that I found were useless to me, as they were not supporting Union Pay. I am a customer of the Bangkok Bank which doesn’t support VISA or Maestro – it works with Union Pay which is a pretty solid Asian banking standard. So you might have a guess which ATMs turned out to be the best for me. Indeed, again it was the ATMs offered by the Sparkasse.

    My takeaway from this? German banks are in trouble – and are forcing through changes to let people turn towards more online banking.

These are just a few observations that I noted in Berlin and Hamburg, of course, it’s not representative but it gives me some idea on which topics I should dig deeper and see what is going on there.

The same goes for every investor. One should always observe the surrounding, see what is happening in our areas, which products are becoming popular, which trends influence our neighborhood. These small things can often have plenty of questions and even more answers behind them, which can give even small individual investors hints for emerging market moves.

So keep your eyes open, and once you observe something, dig deeper into it and try to understand what is happening there. It doesn’t need to result in an investment, but it’s never wrong to understand market dynamics, and they always start and end in our regular neighborhoods. At the end of the day, it’s people like you and me who are purchasing, consuming and accepting or rejecting products & services – which ultimately decide which ideas, concepts, products & services, and companies will turn out successful and are worth to be in our portfolio.

Impressions from Berlin

I am currently on vacation and visiting my family in Germany, Berlin. It’s my first visit in almost 2 years. I had to skip last year due to switching jobs and an overwhelming amount of work. Obviously, even while living abroad I am still following news and since I work in a hotel and have plenty of guests from Germany, I usually feel to be well informed about what’s going on at home.

Well, this is the first time that I felt misinformed.

The whole world is talking about the problems Germany is supposed to have, related to immigration issues, specifically to the large influx of refugees. Newspaper articles are full of terrifying stories, people are talking about rising crime rates and increasing socio-economic challenges.

Well, after spending a week here and visiting plenty of areas by day and by night, I can say that the city didn’t change in any negative manner. Just the opposite. The city seems better than ever and I might actually consider moving back here next year.

The streets are full of coffee shops, eateries and stylish bars to hang out. I hear different languages everywhere, from English, Spanish, to Polish and yes, sometimes also some German. I consider this diversity to be refreshing and positive. It fits with my personal point of view and considering myself as a world-citizen, rather than a German (I got 2 passports, so I can’t claim any nationality alone anyway).

Streets are mostly clean, schools look better than during my time here, playgrounds are full of families with children all day long. There are more designer buildings, it seems there is more technology everywhere but at the same time, the city is as green as a forest. Parks, lakes, the amount of natural elements is overwhelming everywhere. The focus on healthy food, drinks, recycling, sustainable infrastructure and the promotion of environmentally friendly actions is really refreshing and something you just hardly see in south-east Asia.

It might also be that by now I see things different, with the eye of a father more than with the eye of the adventurous world-conquerer that I once intended to become… we all had our dreams, didn’t we?

By now, Berlin got some of the glamour that major cities need which it didn’t have in the past. One reason why I left the city (and the country) so many years ago, was due to the lack of… well, excitement, diversity, and energy. I am glad that I start to like the city again. And I am glad, that most of the stories I heard turned out to be vastly exaggerated.

Today nothing about investing, but I thought I need to share this impression. The next investment article will come over the weekend. Until then, I will enjoy the city a little longer.