Shyness keeping Finland down

Finnish people are known for their stubborn and unsocial behaviour. It is hard for Finnish people to change their minds and if someone is acting differently than others he or she will be considered weird or lunatic without a doubt. Many people lack enthusiasm to aim high to reach their dreams. Many are just accepting the easy way out of problems and settling down too easily to the monotone weekly routine that everyone has. This affects the image of brands and products Finland produce to the world.

Finnish people are too concentrated on creating an awesome product than thinking about selling it. They live in a thought that creating a good product is all you need. Like marketing expert Erkki Izarra said ‘’Finnish people think that a good product will sell itself, and if it doesn’t something is wrong with the world.’’ Of course it doesn’t work like this, but we have this vision glued hard to the back of our heads.

If we compare Finland for example with Sweden and you ask people what they know about Sweden? People will most likely answer Ikea and Swedish meatballs without hesitation. Sweden has created a strong brand that people will recognize them from. Ikea is a worldwide brand and Swedish meatballs are known mostly because of the dish Ikea provides in their stores.  But when you ask people what they know about Finland they will just shrug and maybe ask where is it?

Finland has fallen under the shadow of the other better-known Scandinavian countries. So why is this a problem? People create images in their heads about different products, positive image will get them to buy and recommend them of course. But if you can’t remember the brand or can’t associate it to something, this is when Finland’s problem kicks in, people won’t buy it. If you think about other countries and what they are known for, like Germany for quality cars, Japan for electronics and France for their wine, you realize that Finland doesn’t have a specific brand image in the world.a

Finland has educated and skilful people to make great things but our marketing for the products are in the low-end. Finland has one of the best education systems in the world and we have people with expertise for example in IT. We have created big brands like Nokia’s phones and (which is currently going down,) Angry birds (most downloaded mobile game in history). Everyone knows these products but do they affiliate them to Finland? I don’t think so. So what’s the problem?

How to sell? This question has tormented business experts and regular pedestrians alike. Nobody knows the exact answer and no one ever will. Predicting people and trends is indeed impossible, but does it help if we just sit in the corner quietly and hope that things will just work out. No, that’s just stupid, you need to grab yourself from the neck and do your best. How do you think the biggest success stories were born, they did their best considering the circumstances and didn’t quit until they got what they wanted.

How will you sell your expertise in the future?

 

 

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What is sports betting and does it have anything common with investing?

Investors are trying to make as much profit as possible for their investments. So do sports bettors, they place their wagers on the sports results outcome and are trying to get as many winnings as possible. People usually believe sports betting is risky hobby, what it actually is if you are making it risky. We can categorize sports bettors three groups. First group is sports bettors who are only looking for excitement and entertainment and their main thing is not to make profit. They place bets on the tv matches so they can be more excited about tv matches than without bets. We can call them ”entertainment bettors”. If they make profit it is positive thing for them but usually it is not happening. That is because they are not enough devoted sports betting to make profit in the long run and they place bets, which expected value in the long run is negative.

Second group is ”amateur bettors”, they know more about sports betting than ”entertainment bettors”. Amateur bettors have more acknowledge about sports betting and they know better how to make profit in the long run by placing bets. They still fall mistakes too often and that is the thing what tell the difference between ”amateur bettors” and the third group ”professional bettors”.

”Professional bettors” are minority in the world. In Finland there are not many people who can call himself ”professional bettor”. ”Professional bettors” work day may be almost 15 hour per day. It is also called the world hardest career choice. ”Professional bettors” main goal is to make profit on their invests in the long run. They understand that sometimes you had to deal with long losing streaks and you might lose a lot of money in the short time. ”Professional bettors” had to have a good stress control and they had to believe themselves.

What can make you a winning sports bettor? First of all you need betting cashier. The money amount you can choose yourself but you had to separate moneys between betting moneys and the moneys you need to living. I recommend to choose beforehand how much it is. It is good to be that much you can lose so it will not influence on your normal life. It is important to make better probability estimate than betting markets. Sports bettors are trying to play betting factors that are over their own probability estimate. In the long run if you make enough right decisions and find over factors in the betting you will get profit on your betting investments. Winning sports bettor have to be patient. It is not one moment and you are rich, if getting rich is only goal for sports bettor the thing that usually happens is vice versa.

Sports bettors and investors have the same goal: try to forecast future.

http://vedonlyonninabc.com/

http://www.profitbet.fi/matkalla-voittavaan-vedonlyoentiin

Jorma Vuoksenmaa, Pelaajalta pelaajille

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Bittium, a hidden golden egg?

Have you ever heard about a technology company called Bittium? If you answered no, now you hear something about this potential golden egg from Finland. The company located Oulu and they are building a new bigger headquarters right now. The firm is old Elektrobit, actually part of it because they sold Automotive business unit. A German giant Continental bought Automotive from Elektrobit by giving 600 million euros cash 1.7.2015. After the deal Bittium focused on Wireless, a minor business unit.

bit

Bittium´s stock price.

Bittium is a small company at the moment but it´s working on megatrends market. One of the megatrend market is Public safety. Bittium offers solutions for defence-, safety- and other authority markets. The second megatrend is LTE-technology. Data transfer multiply in the future and Bittium has strength offer solutions for LTE-markets. The third megatrend is IoT (Internet of Things). Bittium offers solutions for industry to connect machines to the internet. One of the most interesting things is that Bittium has GE Healtcare in a reference list. IoT in healthcare markets will increase rapidly in a few years report experts.

So company doesn’t have only one thing in its business. Bittium has a large list of products which are able to hit the markets hard. Biggest hype creates Bittium Tough Mobile. It`s Android based mobile phone for Mobile Security and Public Safety markets. Currently the demand for safety phones increases speedily because there are cases where information via phone has leaked for wrong persons. Authorities also needs own safety network and phones for the authority use. Now shareholders are waiting for good news from Mexat and Firstnet because Bittium competes in these projects in order to get Tough Mobile selected. These projects by authorities are worth of tens of millions dollars.

As other shares, there are analysist who are following Bittium. Three of the analysists are OP, Inderes and Evli. Two of these analysist are pessimists, Evli and Inderes. They didn’t like a news that Ericsson, partner, decreases cooperation with Bittium because Ericsson has to cut down charges. These two analysist have an opinion that next year Bittium is unable to reach a company´s target, 10% growth per year in revenue and operating income, between years 2015-2017. OP didn’t change the target price downward for share. This is a good thing for shareholders because investors can think that OP knows best the situation of the firm. And the reason is: OP organized company acquisition between Elektrobit and Continental. Actually OP elevated the target price to 6,6 euros, so investors can think OP has confidence for Bittium.

Maybe the worst thing for investors is the company`s information policy. They don’t disclose too much for public. For example Finnish company, KONE, announced that they are going to connect their elevators to the internet (IoT). Same time something interesting happened at Bittiums reference list: KONE`s logo appeared for the list. Result is: Bittium haven’t announced anything about this partnership. Bittium justify that they can´t told about contracts because they have secrecy obligation. Okay, maybe it is true, Bittium does business at Public Safety markets and so on.

Other funny case is cooperation between Bittium and Harris Corporation. Enthusiastic investor´s found out that Harris sells the same phone than Tough Mobile in different name. In this case it is white-labeling product. Again, there is no information for the public. And maybe there is no information for long time about this Harris-case. Probably they have very strict contract so Bittium can´t disclose any specific information. Investors can view interim reports.

All in all, Bittium is one of the most interesting companies in OMX Helsinki. Hot megatrends will elevate share high, but you have to remember that it will take a few years or more. And of course, risks are high. If the company keeps information policy similar than recently, it requires a nerves to own the shares. But fuse already lit. CEO Hannu Huttunen got a question from Osakeareena: “Why Tough Mobile could fail on Safety Phones market?” Huttunen answered confidently: “We do not believe it will fail.”

 

 

http://www.kauppalehti.fi/uutiset/elektrobit-myy-automotiven-suurkaupassa—rahat-osakkeenomistajille/u2DLzeFw

http://www.bittium.com/bittium_lyhyesti/tietoa_ja_taloudellisia_lukuja/tietoa_yhtiöstä

http://www.sijoittaja.fi/29683/bittiumissa-kova-kasvupotentiaali/

http://www.grandviewresearch.com/industry-analysis/internet-of-things-iot-healthcare-market

http://www.formin.fi/Public/default.aspx?contentid=352366&contentlan=1&culture=fi-FI

http://osakeareena.fi/viewtopic.php?f=27&t=325&start=10

http://www.kauppalehti.fi/5/i/porssi/porssikurssit/osake/index.jsp?klid=1117

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Stop complaining, get a job!

Stop complaining and get a job. It is really sad, that seems to be a quite normal point of view, when people are talking about unemployment. On September, the president of the Youth League of the National Coalition Party, Susanna Koski said on television, that every time looking out of the car or train window you can see jobs to be done.

This only makes me wonder how it is possible, that a woman in her position is so far from reality. Did she ever think that those forests are owned by someone and who would work without any salary? Even the law says that if you are working for someone, you must get paid for that (Työsopimuslaki 2001, 1 chapter 1 §). And this is just one example.

Almost as bad is our beloved government, making decision after decision to lower the benefits and to punish people for being unemployed. According to Statistics Finland, in August 2016 we had 342 543 people unemployed and 35 916 open jobs at the employment office. Wait a minute, something does not match!

man-937665_960_720

There is no doubt that unemployment is a really large problem in Finland. It is a problem for the economy and most of all, it is problem for the people themselves. How ever, I am not the person to solve the problem. Neither is the person who is trying to live a decent life and fill in a thousand forms and jumping here and there for the benefits.

There is no light at the end of the tunnel. The government has now decided to “activate” unemployed people by tightening the rules and punishing for not taking the job, which you don´t have the education for. I really believe there are better ways to solve problems. I also think that we as citizens have the right to get a professional government to decide how to use our tax money. Oh, I am sorry! I forgot we voted for that government!

 

A-studio Talk 29.9.2016. Yle Areena. Http://areena.yle.fi/1-3073438. Watched 29.9.2016.
Työsopimuslaki 26.1.2001/55. Finlex. http://www.finlex.fi/fi/laki/ajantasa/2001/20010055. Red 10.10.2016.
Statistics Finland 2016. PX-Web Statfin. Työttömät työnhakijat ja avoimet työpaikat laskentapäivänä. Http://pxnet2.stat.fi/PXWeb/pxweb/fi/StatFin/StatFin__tym__tyonv/statfin_pxt_tym_tyonv_002.px/table/tableViewLayout1/?rxid=15ecb8b8-41e8-4d79-bc5d-a0efeeea2eaa. Red 10.10.2016.
Kauppalehti 1.9.2016. Uutiset. http://www.kauppalehti.fi/uutiset/hallituksen-tyollisyyspaketti-tyottomat-haastatteluihin–tyottomyysturvauudistus-kolmikantaan/hFqzREsM. Luettu 10.10.2016.
Helsingin Sanomat 5.10.2016. Kotimaa. http://www.hs.fi/kotimaa/a1475632597111. Red 10.10.2016.

 

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The effect that BREXIT will have on Finnish economy

Britain voted in June in favor of leaving the EU. Theresa May the Prime Minister of Great Britain announced to the press that Britain is going to start the negotiations for the leave before the end of March 2017.

How will Brexit affect Finnish economy? A great deal of future scenarios have been made by professionals since the Brexit vote came out. Finnish economy is in comparison to other EU countries greatly dependent of domestic markets. Remarkable so of countries outside the EU. According to Hypo (a Finnish credit institution) Finland’s economy will be even more dependent from domestic markets in the future.brexit-hyva-photo

(http://www.pymnts.com/news/b2b-payments/2016/brexit-corporates-small-business-fx-currency-cross-border-trade/)

Finnish economy will at least be affected indirectly from the travel, online shops, moving abroad and vacancies from Britain’s work markets. According to Helsingin Sanomat pound value towards euro has been calculated to decrease. The possible drop in pound value would give Finns a possibility to shop and travel less expensively in Britain or at Britain’s online stores. So far Finns have been able to move freely in EU. After Britain’s leave, depending on the settlement Britain will make with EU, free movement will be affected – with the settlement also having an impact towards the vacancies from Britain’s work market as well as studying abroad.

The Finnish export will also be impacted by Britain’s leave. According to Helsingin Sanomat Britain was Finland’s sixth largest export country last year. With taking total 5.2 % of the whole export. With Britain’s exit the most effects to Finland will not only be from Britain’s export markets but the affect that the exit will have to the world economy and in that way Finland exports recovery from the global recession.

The harder the hit from Brexit is to the world’s economy the more will Finland plunge in relation to other countries. The true impacts can’t be measured before the leave but one thing that all of us know for sure about Brexit is that no country has ever left EU it will affect the whole union in a way that can’t be predicted – we will just have to wait and see.

Sources:
Niskanen Jyrki. Niskanen Mervi. Yritysrahoitus. 2016. Edita. s.473.
Aalto Jari. Vuokko Aromaa. Haapala Pertti. Hentilä Seppo. Nieminen Jaana. Kaikkien aikojen historia. Edita .2011. s.180.
Esa Koivuranta. Hypo arvioi Brexitin vaikutuksia. 7.7.2016. Yle uutiset. http://yle.fi/uutiset/3-9007102 luettu 12.10.2016
Heidi Huotilainen. Näin Brexit voi vaikuttaa suomalaisten arkeen. 24.6.2016. Helsingin Sanomat. http://www.hs.fi/talous/a1466735575209  luettu 12.10.2016
Juhana Rossi. Analyytikko: Brexit myllertää tänään markkinoita ja uhkaa Suomen vientiä. 24.6.2016. Helsingin Sanomat. http://www.hs.fi/talous/a1466735164944 Luettu 13.10.2016
The Brexit already takes its toll. Pymnts. 27.6.2016. http://www.pymnts.com/news/b2b-payments/2016/brexit-corporates-small-business-fx-currency-cross-border-trade/ Luettu 2.12.2016.
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Is Deutsche Bank the new Lehman and brothers? oh boy here we go again!

2016 has been an exceptional year in the stock markets. The year started off in the worst possible way because there was distrust in East Asian markets because of China. When that was settled and the stock market was reviving the United Kingdom decided to go nuts and leave the EU. Once again there was panic on the stock market like the world had stopped because the analysts had guest wrong the outcome of the vote. Yet somehow stock markets took off and world continued spinning. Like this was not enough for one year here we go again. The dust has not even settled after Brexit and now we are in the verge of a new bank crisis because one of the largest banks in the EU Deutsche Bank is struggling.

Markets are now clearly in a waiting mode for what will happen next with Deutsche Bank. The news around the bank are not really positive. CEO John Cry promises they won´t need outside help but still they have to sell their insurance company and maybe lay off 1000 workers. Doesn´t sound good to my ears. I won´t disagree with that the all above mentioned actions are necessary for the future of the bank. I won´t either start to speculate what will happen next with Deutsche Bank because if I knew I would be making a lot of money right now and not writing this blog. This outside help what John Cry mentioned is a really interesting topic because it involves us all as tax payers in the EU.

We all remember, or at least most of us, what happened when Lehman Brothers and other institutions fell in 2008 and it caused the collapse of the financial markets. US tax payers were the only source that could bail out financial institutions from a total breakdown. Thanks to FED:s active actions to tackle the crisis the US economy were able to get back on solid ground and is doing pretty good now. EU on the other and ECB weren´t fast enough to react and there is still countries like Finland that has not bounced back to level before the crisis. One common thought after the crisis was that the investors must suffer from the bad they cause to the economy. One thing usually leads to another and after the crisis rational thinking lost all importance and populist became really popular after 2008.

Eventually one harmful thought got a lot of support and it was called investor responsibility. What a wonderful word investor responsibility and no wonder it got so popular. It became such an awesome thing that the EU decided to make a bullet proof mechanism where investors lose their money and only in the worst case possible governments come in the rescue of the banks. This all is guaranteed by a fund that gathers money from banks and only helps in the situation where no private capital is available anymore. Sounds fare that tax payers won´t need to bail out banks and we can all sleep our nights well because our precious tax money is in safe hands.

This is where all the fun, beautiful words and speeches end. The reality is quite simple no matter what in the case of Deutsche Bank. Once again we have a bank that is too big to fall. If you don´t believe me simply compare their liabilities to their equity. According to Société General they would need roughly 20 billion euros more to be a healthy capitalized bank. So if the worst possible scenario becomes true with DB and they need more capital to survive the investor responsibility steps in the scene. The first part is that investors must suffer loses. Sorry if I am stupid or really stupid but in 2007 DB cost over 80 euros per share and now it is worth of roughly 10 euros. Hmm… so in my calculations investors have already made an 70 euro loss per share and during this year only it has dropped from 30 euros to 10 euros. Isn’t that comforting to hear investor responsibility states that investor must suffer loses. So if DB runs out liquid assets I can guarantee no investor will pay 10 euros for their shares. In other words German government lets the share price to drop for zero euros.

55555

The outcome will be that the investors suffer massive loses exactly like the EU wants. The next thing on the bucket list is that bonds are turned in the bank equity. What that means is that 8 % of the liabilities must be turned in to equity before the bank can receive outside help. So outside investors become owners of the DB. I just have to wonder who came up with this idea. On paper it sounds great but the outside investors are not idiots. If there is a risk that your debt is turned to equity you must ask a really high premium because of the risk. If you are a struggling bank like DB your chances of survival are shrinking since your financing costs are increasing rapidly. Here comes the ugly truth as we have seen before what happened with Greece. When the investors will not invest their money anymore in the sinking ship the only possible funding must come from tax payers. We can create systems where investors and creditors lose their money but we cannot create a system where they have to invest their money in the sinking ship. So I hope EU and especially Germany chooses the easy way out and helps DB if necessary as early as possible because it is easier to fix a boat that is on the surface than a sunken one!

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New plant protein food innovations coming on Finnish plates

Consumers are more conscious of their eating habits and how food is produced. This has opened new possibilities to Finnish companies. During year 2016 new plant protein food innovations have arrived in supermarket shelves.  Pulled oats(nyhtökaura) was first product, that received big media attention. The product got very positive reception and consumers have had problems to get it from stores because it has been sold out. On the 1st of September 2016 Paulig Group acquire the majority ownership stake (51%) of the manufacturer, Gold&Green Foods. After the acquisition Paulig and Gold&Green have together two aims: accelerate the production capacity of the pulled oats and launch the product to international markets. Pulled oats is a vegan product made by oats, beans and peas. Pulled oat innovation is developed by Gold&Green team.

                                                    nyhtokauramtv.fi

Paulig Group is family-owned, international enterprise in the food industry. Paulig has many well known brand such as Paulig, Santa Maria and Risenta. The Group has about 1900 employees in 13 countries and the net sales for 2015 were 905 million euros.

During autumn 2016 a second Finnish plant food innovation was launched. Verso food company has developed products Härkis. It is made by fava bean, pea protein and roasted onion -extract. Härkis is made to consumers who want to reduce using meat or want to eat only vegan food. CEO of the Verso Food believes that company is not afraid of the rivalry between other plant food products. Vegan food is more and more popular and a demand of vegan food products has increased continuously. The most important of the products ingredients is fafa bean which comes from domestic producers. Other ingredients come from Europe. The company was founded in 2010. Verso food is owned by almost 20 investors and one bigger investor company. Verso Food has three employees. 2015 its net sales were 200 000 euros.

www.yhteishyva.fi                                                                     yhteishyva.fi

It will be interesting to follow will this plant protein food just short term food trend or can Härkis, plant oats and other products take their place at Finnish food tables. These products are a little bit expensive than their meat rivalries which can be their weakness. For example pensioners, students, unemployed persons and other people who do not have much money to use their weekly groceries.

Sources

http://www.versofood.fi/en

http://www.goldandgreenfoods.com/

http://www.pauliggroup.com/

http://www.talouselama.fi/uutiset/nyhtokaura-saa-vauhtia-maailmanvalloitukseen-paulig-ostaa-gold-green-foodsista-osake-enemmiston-6578806

http://www.talouselama.fi/uutiset/nyhtokaura-harkis-mifu-uudet-tulokkaat-nuijivat-lihateollisuutta-6577182

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Mortgage: Love it, hate it, you will probably need it.

n-mortgage-628x314http://www.huffingtonpost.com/jack-m-guttentag/mortgage-repayment-questi_b_9278698.html

Now would be a great time to take out a mortgage for the next ten years. The interest rate is historically low and it has been so for a few years now. In Talouselämä’s article they were investigating which interest would be the best in the borrower’s point of view, if they would choose from either ten year fixed rate or the one year euribor. The euribor is very difficult to predict so the percent is in the article the same as the earlier 10 years interest the other way around.

Ten years fixed rate means shortly that the interest will stay the same throughout the whole loan period. The Euro Interbank Offered Rate also known as euribor, is determined everyday by European banks trading. This means that every year the interest could be different.

In the article the loan is 100 000 euros, the ten year fixed rate is 1,25 present plus the marginal percent 1,20%, making it 2,45%. The marginal percent is based on the client’s ability to pay back the loan as well as their collateral and the financial position. The one year euribor percent you can see in the next table.

Year Month Percent
2016 August 0,00 %
2017 August 0,16 %
2018 August 0,47 %
2019 August 0,54 %
2020 August 0,88 %
2021 August 2,10 %
2022 August 1,42 %
2023 August 1,33 %
2024 August 5,32 %
2025 August 4,67 %

Source: Nordea, Olli Kärkkäinen, Finland’s Bank.

The conclusion was that if you take out the euribor interest you will buy less than 2 100 euros of interest compering if you take the fixed rate.  This was of course only speculation and no one really knows what will happen to the interest rates in ten years’ time. Usually mortgage loan’s time period is longer and the rate would be in that case even higher.

Taking a mortgage can be a big decision for some people and not knowing what the rates for the loans will be may worry some. Many Finnish loan takers however takes the euribor interest and only a few the fixed rate. A lot of people don’t think the loan as far as for the next twenty years. If the rate is low now it can feel more tempting and a few really thinks what the rates will be later on. One always should find out different banks different interest rate and their margins for one’s loan and in this way find the best mortgage for them.

Sources:
Niskanen Jyrki, Niskanen Mervi. Yritysrahoitus 2016. Edita Publishing Oy, Otavan kirjapaino Oy, Keuruu.
Kohi Antti, Liuskari Markku, Päivärinta Kimmo, Vihervä Vesa. Forum Uusi taloustieto 2012.  Otavan kirjapaino Oy, Keuruu.
 Outi Kokko, 1.10.2016 Talouselämä.  http://www.taloussanomat.fi/asuminen/2016/10/01/kaikki-irti-matalista-koroista-selvitimme-pitaisiko-nyt-ottaa-asuntolainaan-10-vuoden-korko/201610107/310  Luettu 1.10.2016.
Posted in Investing | 5 Comments

When are we at our earning peak?

Everyone must be interested in at least their own earnings, and that’s why I wanted to write a post about the highest income earning years. Determining that isn’t simple because there are so many variables that affect it. However, after some research I was able to find some average results about the subject.

According to Daily Mail in the UK women’s earnings typically peak at the age of 34, but for men the age is closer to 50. What this basically means, is that men’s salaries keep on rising about 15 years longer than women’s. save-money

UK Wages Over the Past Four Decades reported that on average women earned around £13.19 (15 euros) per hour at their highest. The figures also revealed that the difference between men’s and women’s salaries are actually close to zero until the age of 30. This means that there’s not a big gender pay gap in the beginning of a work life in Britain. The report shows that when men reach their earning peak, the salary appears to be around £15,54 (17,67 euros) per hour. I’m wondering, why does the salary stop rising for women earlier?

The studies are saying that this might be because women often stay out of work for a few years to have children, and when they return they continue as part-time employees. So then why not comparing men with women who decide not to start a family and stay at work instead? I guess it wouldn’t bring us any more accurate results because no matter how random the group of women we pick, there’s always going to be a part that wants to have children, and that doesn’t really change the average statistic results.

art_2010-06-07_003_002Instead, when I compared the statistics in Finland, Yle News stated the fact that men are getting paid a little bit more already at a younger age. After the age of 25 male salaries are starting to rise more rapidly than female. Each gender will reach their earning peaks at the age of 45, but the one big difference is that men are getting almost 1000 euros more a month for the rest of their working life.

In my opinion I like the Finnish salary scale better even though the gap between men and women is deeper at the beginning, I think besides that it’s also more motivational in a way. Me as a woman if I reach my high-earning years at the age of 34, what makes me want to educate more, learn more and do more/better at my job after that? I think constantly rising salary motivates you to do better in the competitive business life. Anyhow, the earning peak of my future career won’t come anytime soon no matter what country I live in, so I’ll just have to work hard in the meantime. What do you readers think about the systems, is one better than the other? Which one would you prefer to have in your country?

 

 

Sources:

MoneyPlus Features Team, 2016. When are we at our earning peak. Standard Life. Updated 26.4.2016 http://www.standardlife.co.uk/c1/news-and-blog/when-are-we-at-our-earning-peak/# Read 6.10.2016

 

Rautio, Marjatta 2016. Naisen palkka liukuu alamäkeen viimeistään viisikymppisenä – miehen tilipussi tonnia lihavampi. Yle uutiset. Updated 7.3.2016 http://yle.fi/uutiset/3-8415118 Read 6.10.2016

 

Norton, Jim 2014. Women’s earnings peak at 34, but for men it’s 50: Difference due to women returning to work part-time after having children. Daily Mail online. Updated 4.7.2014. http://www.dailymail.co.uk/news/article-2680189/Womens-earnings-peak-34-men-50-Difference-women-returning-work-time-having-children.html Read 6.10.2016

 

Truc, Henry 2010. Preparing For Your Peak Income Years. Financial Highway. https://financialhighway.com/preparing-for-your-peak-income-years/ Read 6.10.2016

 

Pictures

http://www.stat.fi/artikkelit/2010/art_2010-06-07_003_002.gif

http://cdn.maypalo.com/wp-content/uploads/2010/11/save-money.jpg

 

Posted in Careers in Accounting and Finance | 4 Comments

The struggle called student income limit

121279-119573Every year, thousands of students have to keep accurate calculations about their annual income. Or if they don’t do that, it might backfire, because if the student income is higher than the income limit allows it to be, the part of the student allowance must be paid back with an interest rate of 15 percent. It is a total rip off, because the interest rate is much bigger than the interest rates of mortgage loans for example. If the student has to return one thousand euros of student allowance, they have to pay extra 150 euros as a ‘punishment’ for not keeping an eye on their incomes. However, it is possible to prevent this recovery of student aid by cancelling it in advance. Also by returning the part of student aid that goes over the limit before the end of May the following year, it is also possible to avoid the reimbursement with interests. (HS.fi, 2016.)

Most students take out the student allowance for nine months, because in the summer, students don’t usually study. So, for nine months the income limit is set to 11 850 euros, which basically means that you can earn 1316,67 euros per month before taxes. The income limit is divided into two categories. The first is the limit that you can earn for the month that you have been paid a study grant and housing supplement or both, which is 660 euros before taxes. The second one is for the summer months that you don’t get study grant or housing supplement which is 1970 euros per month before taxes. The total of these is the 11 850 euros which was mentioned earlier. (Kela, 2016.)

Keeping your annual income under these government set income limits is a real struggle for many students. I work for 15 hours per week myself and every year when the year is coming to an end, I have to speak with my superiors about cutting down my working hours, because the income limit is about to be surpassed. Luckily I have understanding superiors at my workplace and they let me do less hours at the end of the year, but that is not necessarily the case with everyone.

So what is the point of keeping these income limits? That is a hard question to answer from a student’s point of view. One argument for this is that by keeping the income limits, students would mainly concentrate on studying and they would graduate on time. But that argument is not a very good one, because in order to get the student allowance, the student must get at least 20 course credits per semester even if the student takes only one month of student allowance. If the student takes nine months of student allowance, they must get five course credits per month which means 45 credits. (Kela, 2016.) So that alone is a guarantee that student concentrates mainly on studying.

Another rationalization for the present income limit is that only the students who really need the allowance are able to get it. Not the ones that earn ‘too much’ money while studying. (HS.fi, 2014.) Even though this argument makes more sense than the previous one, the fact is that the income limit is too low. In comparison to other Nordic countries, only Iceland has lower income limit for students who need financial aid. Students are allowed to earn 16 500 – 19 500 euros per annum without any effect on their eligibility for financial aid in other Nordic countries. (Helsinki Times, 2014.) The current income limit rule makes it very hard for students to earn and save money for the future.

“In the year 2011 Finnish student union made a calculation in co-operation with Social Insurance Institution of Finland (better known as Kela) that showed that by removing the income limit it would cost approximately 300 million per year to the society”, wrote politician Tommi Liinalampi from Vihreät political party on his column in New Finland-webpages. This is the real reason why income limits even do exist and I think that we can all agree that removing the income limit isn’t a good solution for this problem. However, something has to be done, because clearly the system isn’t working, if it’s not possible to work two or three times per week without surpassing the limit.

There is one sentence I thought I would never even hear, is the one I now use regularly and it is “Sorry, I can’t do Sundays, because I will earn too much money.” Another thought that got me thinking was when my friend said that “I hope that my bonus holiday pay isn’t too much so that my calculations don’t get messed up.” These two sentences show just how students have to struggle, because of the tight income limit.  If the income limit was higher, I would definitely work for more hours and on Sundays also, while concentrating on my studies the same way as I do now.

There are, and always will be different opinions about how this problem should be solved. Some might think that the student income limit should remain the same and others want to remove it completely. Nevertheless, I think the solution for this problem, should be raising the income limit and dropping the interest rate when a student has to payback financial aid to Social Insurance Institution of Finland. Our society should award hard-working students rather than by giving a fine for working too much.

Sources

Helsinki Times, 2014. Kela: Finnish student aid the lowest in Nordic countries. Helsinki Times [Online] Available at: http://www.helsinkitimes.fi/finland/finland-news/domestic/10659-kela-finnish-student-aid-the-lowest-in-nordic-countries.html. (11.10.2016.)

HS.fi. 2014. Opintotuki ”rankaisee” siitä, että opiskelija nostaa tukea, vaikka ei sitä tarvitse. Ilpo, Lahtinen. Kelan pääsuunnittelija. HS [Online] Available at: http://www.hs.fi/mielipide/a1408509353375. (11.10.2016.)

HS.fi. 2016. Ylittyikö tuloraja? Opiskelija, laske kesätienestisi viimeistään nyt. HS. [Online] Available at: http://www.hs.fi/raha/a1443754576103. (09.10.2016.)

Kela. 2016. Financial aid for students income. Kela [Online] Available at: http://www.kela.fi/web/en/financial-aid-for-students-income. (09.10.2016.)

Kela. 2016. Opintojen edistyminen. Korkeakouluopinnot. Kela [Online] Available at: http://www.kela.fi/opintojen-edistyminen-korkeakouluopinnot. (09.10.2016.)

Liinalampi, Tommi. 2016. Opintotuen tulorajojen poisto kallis ratkaisu. Uusi Suomi [Online] Available at: http://tommiliinalampi.puheenvuoro.uusisuomi.fi/213481-opintotuen-tulorajojen-poisto-kallis-ratkaisu. (11.10.2016.)

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