DThe others let their money work for them, the Germans, on the other hand, work for their money. This statement comes from Allianz's annual wealth report and explains why Germany is doing much better in terms of economic performance per capita than in terms of financial assets, where Germany is behind Italy and France, for example. The Bundesbank presented its quarterly financial asset statistics on Thursday. The Germans have almost 7.5 trillion euros on hand – an average of 90,000 euros per inhabitant, not counting real estate assets and not deducting debts (which are often taken out for real estate).
It is common practice in German politics, from former Federal President Joachim Gauck to Chancellor Olaf Scholz (SPD), to name savings accounts and current accounts as preferred investments. Solid, without adventure, no turbo capitalists, that's the message to the people.
The Bundesbank includes a yield curve in its statistics. If there were only savers like Scholz and Gauck, German assets would be several hundred billion euros lower. But even so, from an economic perspective and with regard to demographics and pension provision, the curve can be described as a curve of horror. This means that the purchasing power of assets has not only dwindled since inflation has returned. The real return has always been negative before and rarely exceeded 2 percent.
Five reasons for the losses
First reason: cash. The Germans now hold 438 billion euros in cash. That's an average of more than 5,000 euros per resident and therefore significantly more than is necessary for daily life. Before the financial crisis it was only a fifth of that. The fear of a collapse of the monetary system may cause some to exercise caution. But it is expensive – since the financial crisis alone, cash has lost 30 percent of its purchasing power.
Second reason: checking accounts. According to estimates, more than a trillion euros are lying dormant on them without interest.
Third reason: daily money. Together with current accounts, the Bundesbank reports 1.7 trillion euros. However, short-term deposits still only earn interest at an average of 1 percent.
Fourth reason: savings account. According to FMH Finanzberatung, the interest rate here is only 0.4 percent on average. Nevertheless, more than 500 billion euros remain with the Chancellor and other savings accounts. Money that isn't even available every day.
Fifth reason: life insurance and other old-age insurance. Savers here have acquired more than 2 trillion euros in entitlements. But the interest rate for such a long-term investment is disappointing. For regulatory reasons, only a very small proportion is invested in stocks compared to other countries, the most profitable asset class in the long term.
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