Money Talks with Cordula Schnuer and Raymond Frenken

00:00:04: Hey Luxembourg, let's

00:00:05: talk about something that really matters.

00:00:07: Your money and your future!

00:00:10: Welcome to Money Talks the podcast that brings you honest

00:00:13: chats

00:00:13: with familiar faces from Luxemburg.

00:00:18: You'll hear stories of big decisions in

00:00:20: life or personal finances.

00:00:22: No jargon no fluff

00:00:24: just conversations

00:00:25: which make sense And get you thinking on how to reach them.

00:00:29: This podcast

00:00:30: is brought by Alfie.

00:00:34: Good morning and welcome back to Money Talks.

00:00:36: I'm Mihaela, And today we are asking what role can the media play in advancing financial education?

00:00:43: My guests Cordula Schnua editor-in-chief of Luxembourg Times with a background in political reporting and Raymond Franken managing Editor at Investment Officer A veteran Financial Journalist who's covered Europe markets and institutions for many years.

00:00:58: Welcome to both of you.

00:00:59: Thank You for having me.

00:01:00: thank you

00:01:01: A little bit of context for our discussion today.

00:01:04: Luxembourg launched a national financial education strategy and the Let's Fin portal to help citizens make sense of personal finance.

00:01:12: Europe, meanwhile has put financial literacy back on the burner front with proposals To Make Investing Simpler.

00:01:20: my first question to both of you is if I say media Is a source Of Education?

00:01:26: What your take On that?

00:01:28: i would Say Absolutely, but not in the sense of school or schooling.

00:01:35: I think media educate by informing and contextualizing linking developments that are in-the-news whether it's a fiscal reform to people's lives.

00:01:47: so what does policy mean for example?

00:01:49: For your wage or pension?

00:01:52: we play a role in countering misinformation and reporting on facts, but we're not teachers at the same time.

00:02:02: It's

00:02:02: a learning environment.

00:02:03: yes it can play your role in the learning environment.

00:02:06: that is certainly no replacement for education.

00:02:10: good journalism doesn't lecture.

00:02:11: it equips people with context with vocabulary ,with models so they make decisions to do their own personal benefit.

00:02:24: When you assign a story then on investing or political decisions, what's the plan that you give to your reporters and journalists so they come up with stories readable for everybody?

00:02:35: There's not a literal checklist that we sort of take boxes on, but I think it also just boils down to good writing really and good reporting.

00:02:44: So kind of avoiding jargon or defining acronyms and not using them assuming everybody for example knows what alpha is but spelling out at least the one time Yeah, and then also just kind of using clear structures.

00:02:59: You know?

00:03:00: Kind of clear paragraphs, clear attribution of sources.

00:03:03: I think it's always a red flag if in an article you don't know where the information actually came from.

00:03:07: that should be transparent.

00:03:09: Keeping your audience in mind...I think is most important thing.

00:03:13: as journalist In journalism school at The Netherlands I learnt well..you need to have thirteen or fourteen year old kids in mind when you write If they can understand it Or if your mother can understand this story.

00:03:24: That analogy i like to use on Luxembourg.

00:03:27: Luxembourg, how can I make non-financial experts relate to the type of work that we do?

00:03:32: Of course an investment officer will rewrite for investment professionals.

00:03:35: You may assume a certain level of understanding but even though not everybody knows what Alfie is you still have to have that basic role explaining the Luxemburg asset management trade association whenever you use it.

00:03:48: Are there any specific phrases that makes your eyes roll when

00:03:55: I think where we sort of enter PR speak territory, so something like unique first-ever game changer.

00:04:01: Because quite often you will find that it's not actually unique and debatable.

00:04:06: whether its a game changer... Cash

00:04:07: is king!

00:04:08: Some people like to say but they completely forget about inflation when i said that.

00:04:13: Yeah also one my pet piece.

00:04:15: this isn't specific to financial journalism.

00:04:18: My newsroom knows the word new because very often it's used entirely redundantly.

00:04:24: If you're saying, I don't know, Luxembourg among the first signatories of new agreement... The fact that they are among the firs signatories implies there is a new agreement or launch of an initiative!

00:04:36: The fact its being launched also means this is new.

00:04:39: so yeah.. Very often when i see the word New

00:04:42: and use of adjectives Yes.

00:04:45: When you filter an article for adjectives, You're surprised to see how

00:04:48: much clearer it becomes

00:04:50: and also being actually because when you say so For example a massive increase A huge drop.

00:04:56: What do those numbers Actually mean?

00:04:58: Massive compared To what

00:04:59: exactly?

00:05:00: So I think Also And again kind of going back to the this checklist actually is to Kind Of look also for these These kinds of adjectives.

00:05:08: and Do we use them?

00:05:10: and i know they make for you Know grabby headlines probably.

00:05:14: But also then actually going into the numbers and looking at, you know how much is the increase?

00:05:20: Exactly.

00:05:20: We're writing a story about the silver markets today.

00:05:22: they've been sort of out of tilt with the rest and gold.

00:05:28: But then when you look at it, everybody's talking about a hundred-and-sixty percent or two-hundred percent increase.

00:05:33: but what comes down to that?

00:05:34: silver prices have tripled in the last twelve months.

00:05:36: I mean... That is only thing we need say if want.

00:05:39: put into context

00:05:40: The Luxembourg Times covers both big financial stories like you said And issues which touch people everyday lives from housing taxes cost of living.

00:05:50: How often do you choose service oriented angle?

00:05:55: I mean, there's not a sort of specific ratio that we aim for.

00:05:59: For every five news stories We need one server story.

00:06:01: That's how it works.

00:06:03: But very often the service articles are actually driven by the new agenda.

00:06:08: So if you're looking at pension reform or tax reform kind of breaking down, okay the reform that's now on the table.

00:06:17: What would actually mean for your gross internet?

00:06:19: For example readers do want journalism also to help them navigate real life not just in finance but also education careers even family-life relationships and service journalism doesn't replace the investigative reporting that we do, but it complements.

00:06:39: Is there an educational angle financial education?

00:06:43: Angle in the pension reform?

00:06:45: let's say

00:06:46: We've been writing about the pension system for some time.

00:06:48: It's been in trouble for quite sometime.

00:06:50: I mean we knew this was coming right.

00:06:54: But then once they were actually a decision meant that people are going to pay more contributions, I think for a lot of people.

00:07:02: That was actually the first time they started paying attention to this and i found it astonishing because we have actually spent about a fair amount of time writing about the pension system.

00:07:10: so The educational aspect?

00:07:12: I mean yes kind of explaining what does this reform means?

00:07:16: And then also though explaining how their system works.

00:07:20: and you know there's employer employee and state contribution to what goes into the pension pot, that there is a pension fund that manages the reserves.

00:07:30: Because we have readers who come from vastly different backgrounds and might just not know all of this.

00:07:35: You've recently published articles on influencer activity.

00:07:40: That's interesting.

00:07:40: people talk about money like you about investing or financial products sometimes without disclosing they're paid for it.

00:07:49: Do think Traditional journalism still has an edge on credibility, fact-checking independence.

00:07:56: I

00:07:56: think there is a increasing risk of seeing information on social media that's completely unvetted.

00:08:02: It is absolutely true.

00:08:03: the younger audiences gravitate towards space and those formats.

00:08:07: There are talents for all newsrooms to compete with it But this must happen without sacrificing our standards

00:08:15: The danger in social media and can be accessed by anyone, especially young people.

00:08:22: The added value of journalism on media like yours or mine is that you have to have a subscription!

00:08:29: But it means you can have professional journalists checking facts and making sure that the right things are reported for the audience.

00:08:39: as much we do.

00:08:41: And this is not an easy job, but becoming more important because of competition.

00:08:47: How

00:08:47: open to creating partnerships with institutions like educators, regulators or public authorities?

00:08:58: Experts in our reporting, but I think you know editorial independence and that is non-negotiable.

00:09:05: We have syndication agreements with Bloomberg or the Financial Times But they also create their own content And i think co creation kind of risks perhaps blurring the lines between journalism and paid content, especially when we're talking about companies rather than perhaps institutional players.

00:09:24: In terms of partnerships with actually media I think the Financial Times has a good example that they've been encouraged by financial education experts not from industry but more from the academic... ...from the OECD side to take up this topic And Dave assigned a financial education editor inside our editorial team for a financial newspaper, I would completely support that from my own publication to do something like this as well.

00:09:50: But we're still very small but maybe the financial daily is part of our group could be doing something like that.

00:09:55: Financial education isn't just about young people.

00:09:58: it's about people at any stage in their life moment when you get married and have all kinds things to consider if they buy your house or retire.

00:10:06: so there are some things we carry with us throughout our lives.

00:10:08: We aren´t going to school.

00:10:09: all our lives contribute to your personal prosperity and health, that is a lifelong thing.

00:10:22: And it's changing all the time.

00:10:24: The laws are changing, context is changing so even if you know something very well at the beginning You still have to grow with a society.

00:10:33: Raymond the European Commission because we were talking about that has put forward some new plans to strengthen financial literacy At every stage of life and To make investing more accessible through simple and transparent products.

00:10:45: in your view who've spent quite a number of years in Brussels What does it really take, what's missing to move the needle?

00:10:55: In terms of policy there is no policy.

00:11:00: Ten years ago some talk about financial education in Brussels was all embraced as a PR perspective from the banking sector and from But it has, I'm glad to say.

00:11:15: I am glad to see that as well.

00:11:17: It's become more than that.

00:11:19: The European Commission really accepted this as something where they can do more.

00:11:24: That was an academic push also by Anna Maria Lussardi Professor at Berkeley University.

00:11:30: now She is one of the world leading experts on financial education and why its important One thing she always talks about Is compound interest.

00:11:41: And compound interest, it's a mathematical thing.

00:11:44: But that means if you earn two percent interest on your one hundred euro investment after three years... You have more than six percent!

00:11:53: Maybe seven or eight percent extra.

00:11:54: so the interest-on-interest compounds over many many years and That is very important for young people to understand.

00:12:02: The one crucial aspect of financial education because these young I am my age no longer half, is that you have a long-term investment horizon of twenty thirty forty years.

00:12:15: And imagine if you just put away your little bit of money every month and let it grow or compound with the interest on interests to return onto returns for that investment.

00:12:24: That's very significant part in your final stack of money when you are fifty or sixty year old.

00:12:32: Had I known that when i was seventeen or eighteen years old, I wouldn't have made different financial decisions.

00:12:39: From your experience Raymond as a journalist what do you think is one myth?

00:12:44: That could be retired if the schools and um with media worked hand in hand.

00:12:50: Can I jump in?

00:12:50: Yes go

00:12:51: ahead!

00:12:52: I think for me it would be investing only on people who earn loads of money because they are rich Because there's this perception that investing is like for millionaires and billionaires, whatever.

00:13:05: That's not necessarily true.

00:13:07: you can also invest small amounts

00:13:09: but don't forget as a young person the value of time in terms of your investment And that's what Buffett makes a point be patient.

00:13:19: Don't sell your investments too quickly.

00:13:21: I've invested at many different times during my life.

00:13:25: early on I then sold it because you needed for something else.

00:13:29: But had not solved all these investments that are bought when i was twenty or thirty years old, I would have been a millionaire by now and we'd be sitting here!

00:13:38: Maybe... We can get to know more personally?

00:13:41: And I will ask if each of you tell us what's the habit which has served you well over time financially.

00:13:51: For me its automating my savings.

00:13:55: Just as soon as your paycheck comes in, figure out a budget of what you can reasonably set aside every month and just get it out of harm's way.

00:14:04: I mean, what do then end up doing with the money that you've saved?

00:14:07: And how are you invested on so-and-so for us?

00:14:09: You know.

00:14:09: there is probably however many options to add

00:14:12: It.

00:14:12: usually convened six months income should be enough As a safety net.

00:14:18: What did we do extra?

00:14:21: Do you invest six months or three months?

00:14:24: What do you do with the extra?

00:14:26: You need to have some cash for emergencies.

00:14:28: a lot of families.

00:14:29: Do not have cash when they're washing machine breaks down.

00:14:31: Yeah, you need to Have a basic basic pool of cash.

00:14:35: beyond that you can take it bit of maybe A bit more risk and go into investment funds.

00:14:39: going two ETFs.

00:14:41: you see a lot Of that happening in Germany.

00:14:43: It seems to be culturally embraced over there.

00:14:46: In the Netherlands, people have these tax-advantaged savings programs where you can actually supplement your retirement and it's then paid out for a number of years after you retire.

00:15:00: But you get a big tax advantage of fifty percent at the time.

00:15:03: You make the investment.

00:15:04: so if we put two thousand euros away your year, uh...you got one-thousand euros back from the Taxman and those are programs that there are programs available in France or as this long term tax benefit on investments.

00:15:20: If you have a small capacity for saving and your in the French tech system, You should look into that.

00:15:27: That's on long term.

00:15:29: I talked about compound interest.

00:15:30: The importance of time On the long-term can be very attractive.

00:15:35: So your habit, Raymond if I get it right is that you contribute to the Dutch system for your retirement?

00:15:56: Yeah.

00:16:02: It's a small house, I'm trying to make it comfortable but its more than the house.

00:16:07: Its part of my retirement package.

00:16:09: I worked for American firms many years.

00:16:11: they didn't pay out pensions...I have a pension gap in Europe and by having financial construction with this house where i am paying alot extra not interest but also repayments to debt By the time I retire ten years or so will be able lower cost and I will be able to make ends meet with the retirement income that i have.

00:16:37: And I wouldn't been able set up construction if not bought a house, so thats my personal solution for financial challenge.

00:16:46: but then it's also very personal and for every individual can be different... But from me its buying a house!

00:16:52: Since we are getting closer at end I'd like propose this sort of game.

00:16:56: Very quick questions each of you.

00:16:59: The first one is One money term you'd ban from the headlines.

00:17:04: Maybe not specific to money, but disruption.

00:17:09: The most overrated personal finance tip?

00:17:11: If you don't buy avocados... ...you'll be able to buy a house!

00:17:15: I agree with that one.

00:17:19: The financial cliché- You never want to add it again

00:17:23: For me, I can't really think of one.

00:17:25: It's more words like actually indeed all these filler words that aren't needed.

00:17:30: but it is not a financial cliché.

00:17:33: Groundbreaking oversimplification?

00:17:36: That word!

00:17:37: One thing schools should teach about money...

00:17:41: How to read your payslip….

00:17:44: I'm still surprised you speak with people who don't know how much taxes they or like what they're, I mean we mentioned it earlier.

00:17:51: What their pension contributions are?

00:17:53: Um...I think understanding where your money goes is really important and that's just a life skill everyone should have.

00:18:01: They should teach kids not to be afraid of talking about money.

00:18:04: One question every reader should ask before believing in a Finfluencer

00:18:09: How does the Finfluenser earn money?

00:18:12: Who was backing him financially?

00:18:15: A Money Habit That Works In Real Life Not Just In Theory

00:18:18: I mean for me, i mentioned it before.

00:18:20: Automated savings create a budget and put something aside.

00:18:23: if you can

00:18:24: same For me.

00:18:25: look at these apps of this neo banks.

00:18:27: You can easily put in one or two percent automatically from your income to be allocated some.

00:18:32: just something else.

00:18:34: And how do you smell?

00:18:35: is cam story?

00:18:36: If its too good to be true

00:18:38: Exactly!

00:18:40: Thank you so much for the great amount of information.

00:18:43: You've shared with us, we'll drop links to The Let's Fin Hub and the latest EU literacy proposals in the show notes So that you can learn more.

00:18:51: And of course read Luxembourg Times.

00:18:53: Read Investment Officer if you can Until next time stay curious.