While the economic crisis is hitting the French hard and hurting their morale – and at the same time their wallet – a public health problem is surfacing: financial malaise. Rooted in an uncommon financial culture, this evil has a considerable impact on the quality of life of citizens, bringing with it its share of stress, shame and depression. Palliative solutions exist but do not treat the problem at the root.
The waltz of the polls is on: “1 in 2 French people does not have the budget to go on vacation”“51% of French people are convinced that a new financial crisis is inevitable”, “65% of French people will not change anything in their management habits”“38% of households feel vulnerable”, and many others. In this anxiety-provoking context, according to a recent survey, only 13% of French people have taken the step of investing or placing their savings in safe assets.
Is more responsible financial consumption the key to happiness?
However, in these difficult times, some manage to hold their own: the well-informed investors and managers. Aware that our retirement system is at the end of its tether, they are taking their financial future in hand by actively investing. A minority, of course, but the trend is there, and this category may represent an example for all the others. And yet it’s not a question of money: they don’t necessarily earn more than the others. So why are they doing better?
The search for information seems to be an avenue to consider. Driven by a natural curiosity, it can be the beginning of an answer because within everyone’s reach: in 2021 in France, 93% of households had access to the Internet and all the wealth of content that this implies. Among all the information available, you still need to know what to look for, where and how to select the relevant information!
Thinking outside the box on the investment side: less stress, more well-being? Most French people favor classic and reassuring investments, such as the Livret A. The latter shows a starving return of 1%. With an expected inflation of 5.8% for 2022, this support shows a real return of -4.8%. It is not the revaluation to 2% will not change the situation. Seasoned investors have understood the need to invest now in order to prepare for the future. They also understood that there was no return without risk, and that the stock market was not a casino. To do so, they think outside the box, document themselves, are curious. Their financial knowledge was acquired for free on Youtube and forums rather than on school benches. This is where the whole paradox lies. Their strategy is often based on a mix of equity ETFs housed in a AEP or life insurance, real estate (rental or enjoyment) as well as crypto-currencies.
But at a time in France where we still live under the aegis of management “as a good father”, the road ahead seems long and strewn with pitfalls!
So are the French by nature bad investors? Historically, this subject was simply taboo and completely hidden. Investing was even equated with speculation. This message was (and still is) carried by a political class completely out of step with the reality of our compatriots. Remember that a former president even spoke of finance as his enemy. Easy to say when you have spent your entire career living generously on public funds.
Without a solid financial education, the French are on their own. How to change this paradigm? Education! And if it was national education that had to play this role? Despite the fact that it wants to be egalitarian, we are not fooled: school is very often considered as the place where inequalities are reproduced. However, its role is to provide a common culture to all individuals, so that it can serve them throughout their lives.
Investing should be learned at school!
At a time when the debate on the return of mathematics to the common core is raging, the program seems increasingly distant from the needs of the pupils., Teaching differential equations; vector geometry, lines and planes of space; the complements on the derivation and the convexity or the natural logarithm function is important, is it essential? It is not for us to answer them. On the other hand, instructing our younger generations and integrating a personal finance teaching program that will help the French to better prepare for their future is a must! This will deal with the subject of financial malaise at the root.
The Banque de France has set up awareness sessions on budget and personal finance issues in colleges, an excellent first step. But it is still too little! We spend an average of 15 years in the school system, devoting more than a few hours to a subject as fundamental as money seems to be a necessity!
Among our Anglo-Saxon neighbors, personal finance is now an integral part of the school curriculum: 45 states in North America teach it there from kindergarten to high school. In the United Kingdom, it is the public agency of the Money and Pensions Service which provides teachers with materials and books aimed at helping young Britons better understand and manage their budget. In Canada, financial education has been taught in schools since 2017. Finally, in Belgium, while notions of personal finance are already taught in Flanders and Wallonia, there are also initiatives such as the Fund for Financial Education which work to facilitate the teaching of these subjects through creative and original teaching methods such as the creation of a manga or school software.
We saw it in the preamble: we are suffering the brunt of a financial crisis that is impacting purchasing power and eating away at the savings of the French. It’s an observation: 77% believe they have an average or low level of knowledge in economics. The French do not dare to invest because they have the impression of taking reckless risks.
Better financial education will help our younger generations see investing as a way to finance their dreams. Let’s give them a chance that the previous ones didn’t have, let’s enlighten them! Let’s give them the keys to understand the workings that will allow them ultimately to have this financial culture which we miss so much today in France and which could however be the remedy for many ills.
Yes, accompanied by an appropriate education, money can make the French happy.