Advice from a Belgian Newspaper on Saving Following the New ECB Interest Rate

Advice from a Belgian Newspaper on Saving Following the New ECB Interest Rate

On Thursday the European Central Bank did what a lot of folks thought unimaginable by cutting its interest rate by another 10 basis points, from almost zero to even closer to zero. “Super Mario” Draghi also announced the ECB would start buying asset-backed securities. Fully-fledged quantitative easing like the United States has put into place now is the only option left to fight the sluggish economic recovery and looming deflation in the Euro area.

To most people ECB decisions are just a bunch of economic hocus pocus, even though they have quite a large impact on the personal lives of ordinary citizens through banking products and services. In Belgium, for example, most banks have been reducing their interest rate on savings accounts from 3% in 2007 to around 0.3% on average today because of ECB policies. That means about 250 billion euros of savings are earning next to nothing.

That’s why a couple of Belgian newspapers took it upon themselves to educate their readers on alternatives to savings accounts. The best advice the economists they interviewed could come up with were “spending and investing.”

Wait, what?

That’s right, “don’t put off buying a new kitchen or a brand new car, and, if all else fails, just buy art.” Why bother saving and putting your hard-earned cash in a savings account when you can just buy stuff now, because “you’ll buy even less with your savings in the future.”

And, oh yeah, there’s also another option, but it’s too risky, so you should probably stay away: “Stocks are the only real option if you truly want to save.” If you’re even more adventurous, you can also “start buying bonds in other currencies like the American dollar, because we expect a devaluated Euro in the next couple of months”. You shouldn’t buy gold though, “because that’s only a good investment right after a geopolitical crisis.”

Mind blown.

Let’s recap the advice given to ordinary people looking for alternatives to a classic, government-backed (up to €100,000) and completely safe savings account:

  1. Buy a new kitchen or car. Basically, spend your savings.
  2. Invest in art.
  3. Buy Belgian stocks, but remember that’s dangerous.
  4. Don’t buy gold, because there isn’t enough geopolitical turmoil.
  5. Buy bonds, but only in foreign currencies, because the Euro might lose its value.

I have no idea where to start. This has to be the absolute worst advice since someone told Justin Bieber it was a good idea to pursue a carreer in music.

What about mutual funds, heck even index funds and exchange-traded funds? Or insurance products that yield 2% on average? Or dividend growth stocks? Or just a simple tip to ride out the storm and enjoy the basically non-existent inflation level of 0.02%? Pro tip: if you don’t own a car, your inflation level is negative already, so you can earn money by stuffing it under your mattress.

If this is the level of advice your Average Joe is accustomed to, I fear for our future survival as a species. On the flip side, the above means there’s still a lot of work to be done by the online personal finance community, so keep on spreading the spending saving and investing message!

As many of you know, I’m a big proponent of saving and investing, mostly in ETFs and dividend growth stocks. There are a bunch of other options out there though, so I’d like to know what you would do with your savings when a basic savings account yields next to nothing?


  1. Lol at your comment about Justin Bieber. Come on, he’s our Canadian pride and joy. 😉 :p Kidding!

    The amount education on personal finances is really lacking. I always shake my head when I hear banks advertising “high savings accounts” that have interest rate of 1.5%.

    I think it’s fine keeping some cash reserve earning little to no interests but you should be actively investing your money.

    1. Man, I commented on your latest post at the same time you replied here. Creepy!
      I’m sorry about bashing Canada’s finest! 😉

      Personal finance should be a course in high school or something. Or the regular economics class, which basically is a crash course to bookkeeping for most people, should be changed to practical financial advice.

      If Belgians saw a regular bank advertising 1.5% interest rates they’d immediately transfer all of their money. Belgians love them some savings accounts! Most people over here don’t invest at all. I believe only 11% of all Belgian adults have some sort of investment. 250 billion in savings accounts for only 11 million people (children included), completely insane.

  2. Oh Belgium. You are the weirdest country in Europe. As a lovely comparison between Britain and Belgium, check this out: The Telegraph of London just ran an article on how to make 6.48% on your savings by opening a variety of current accounts to get their opening bonuses, then shuffling the money between them all to get their interest and cash rewards maximised…

    Fun tag, thanks NMW

    1. We probably are! 🙂 Sorry not sorry!

      That is a pretty cool strategy! I was looking at doing something similar myself a while back, but the account limit being at €5,000 or €10,000 for most of the offers hardly made it worth the hassle.

  3. Governments everywhere are rewarding long-term debtors and punishing long-term savers. Why? Because governments themselves are long-term debtors so they benefit directly from the very low interest rates that they’ve been imposing since circa 2008.

    But despite the low rates there’s a clear opportunity available for any households who don’t currently save and live paycheck-to-paycheck (in the USA this represents about 70% of households). The opportunity is to identify and eliminate the common household waste that most people overlook. Converts to frugality report initial savings of 20% per year on their normal yearly household spending. For an average USA household, this would generate new wealth of about $9,000 per year—and by the way, those savings represent an entirely risk free return that governments don’t tax. So unlike capital gains from stocks, you get to pocket the full amount of your savings.

    Ain’t it funny that the most rewarding response anyone can make to the deplorable climate of of low interest rates (become more frugal) is the exact opposite of the expert advice the Belgium newspapers are spewing forth (spend more by updating your kitchen or buying a new car)?

    1. Governments definitely are long-term debtors, but I wouldn’t go as far as saying that they are actively rewarding citizens in debt too. The ECB furthermore functions completely separate from any nation state body and is just trying to reach its EU macro-economic mandated targets. Mario Draghi even called upon the members of the EU to adjust their policies towards the new ECB measures.

      You’re absolutely right about this being a great opportunity for households to reduce their debt and start saving. I’ve been telling tons of people to renegociate their mortgage… 2.5%-3% as a fixed rate is just too good to be true (especially considering there’s a tax break for first home owners). And on top of that, there’s no such thing as capital gains tax in Belgium, so it’s a nobrainer to invest your savings.

      Saving and investing is the way to go, not spending and investing, like the newspaper claims!

  4. Saving is the hardest part. Haven’t posted my August numbers yet but they were not good. I am glad to know my kid’s school system does offer finance courses in high school. That plus what I teach my kids should set them up well.

    1. The string always strained snaps at last, DFG! Can’t expect every month to be good savings wise, it’s a long-term effort. I’m looking forward to your August numbers.

      You are definitely lucky with such a course in high school. The Belgian school system is awesome, except for basic financial and law courses, which are completely lacking. This has been a major pet peeve of mine as long as I can remember.

      Of course, parental guidance is necessary too. I’m sure your children will turn out great financially because of your efforts!


  5. My money apart from emergencies savings and other savings for short term goals is invested in the market – index funds and ETF’s. And you were suggesting that I could move to Belgium since you all love mayo and fries…not after what the ECB just informed us lol.

    1. Haha, I’m sorry for luring you with delicious fries! 🙂

      Index funds and ETF’s definitely are definitely a good long-term strategy! Are you mostly invested in north-American companies and bonds?

    1. Insane, right?

      The advice to buy art completely blew my mind… Yes, you could consider that an investment, but only if you posess the knowledge to do so.

    1. My brain can’t handle the combination of Draghi’s extremely serious facial expression and Super Mario’s suit. 🙂

  6. I’m afraid pop news will only give junk information to the average person. It is sad that most people don’t get proper information/don’t have the interest to pursue proper information.

    Some blame has to be on the consumer/citizen side for not taking the efforts to learn about managing their personal finances.

    I think the highest savings account rate we have in Canada is 3%, but it has to be through a TFSA, which is kinda like a Roth IRA, so you have to forgo sheltering stocks from taxes for the high interest savings account.

    1. The sad part is that this is actually quite a respected newspaper. I don’t want to know what kind of advice the more popular media outlets or even tabloids provide their readers with.

      3% is quite a lot, even with all the restrictions! Most Belgians would jump an opportunity like that!

      1. Ya it’s quite popular this 3% account and we hold it ourselves! It’s very nice seeing that 3% roll in year after year and know that the account is completely safe, government insured up to $100k.

        (Well, I guess the zombie apocalypse could occur and there would be no guarantees on the account, but I digress…)

  7. NMW,

    Yikes! Sucks that that’s the kind of advice that’s coming from the “pros”.

    As far as Bieber goes, I’m no fan. However, if I could have been the guy who told him to go into pop music and earn just .05% of his earnings as his agent I’d already be retired. So I think he made a nice choice there. 🙂

    Best regards!

    1. Jason,

      That’s the sad part! The “professional” advice in the newspaper is coming from some of the top economists working in Belgium. Unbelievable!

      Ha, I think no one 18 and up is a fan of Bieber. Great idea about being his agent though! Maybe you should look into a future side hustle to find the next Canadian teenage pop star? 🙂


  8. Wow! No wonder so many people are struggling financially with advice like this getting spread in the media. Your right about us all needing to continue to grow this personal finance community – looks like huuuge work left to be done! A great reminder of why most of us are here!

    I get a bit antsy if I have cash sitting around earning nothing – my first stop for that cash is always stocks.

    1. With advice like this it’s no wonder that most of the middle class is struggling to keep afloat. “Spend all your savings, people!” More stupid words have never been spoken.

      But like you said: more work for us! 🙂

      You don’t keep any cash at all? I like it as a cushion for unexpected expenses or something like that.

      Thanks for visiting,

  9. Yeah, it’s almost unbelievable. Similar to here in the US where consumers were recently blamed for “hoarding” money. Just ridiculous. Governments are destroying the middle class and then blaming them for it.

    1. I think that’s the goal of this article too: make people spend their money to increase the level of inflation and boost the almost non-existent economic growth.

      Hoarding money is the only good type of hoarding!

      Thanks for stopping by!

  10. NMW,

    I’ve read the article myself in the “respected” newspaper.

    Most Belgians just don’t understand what “an investment” is. All the time I here people saying: I’ve invested in solar panels /a new kitchen/house (they mean buying something such as new wallpaper or whatever)

    Most of the time, their spending is labelled as “investing”. The article just conforms with these thoughts and keeps the masses dumb.

    I guess it just makes people happier to think that they’ve “invested” in stuff rather than just blew the money on stuff.

    FYI: Last week I just “invested” in my kitchen and a new TV 😀

    1. FRD,

      Isn’t De Morgen a respected newspaper? Of course, it can’t match De Tijd, but as far as quality goes its in the top three in Belgium.

      You’re totally right about the skewed definition of investing in Belgium. While I do agree that solar panels are an investment (you should see the returns my parents are getting: 12%!), a new kitchen or house to live in is not an investment.

      I hope you enjoy your new TV and kitchen! Maybe take some cooking classes so you can actually use your kitchen as an investment in your cooking skills? 😉


  11. You’re right about the over-subsidized solar panels of the past being a good investment. Nowadays I sincerely doubt it.

    My kitchen so far is a great investment as my wife cooks very well 🙂

    Keep up the good work NMW! love reading your posts!

  12. As someone who has bought a lot of art… Don’t buy art as an investment. Well, perhaps you shouldn’t buy “lowbrow” art as an investment, that’s the art that I seem to be drawn to yet it doesn’t have much resale value….

    1. Thank you for proving the newspaper wrong, Zee! The chance of your art appreciating to the point that it’s a great investment is just way too small.

      Only buy art if you really like it, like you do!

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