Inside The Happiest Country: Denmark

Back in July, I posted an article titled, The Danish Way of Wealth. The article was a hit, with readers sending me oodles of positive feedback. And included in the feedback were comments from a few kind souls who were born and raised in Denmark.

Not being an expert on the home of Hans Christian Andersen, I invited one such friendly, bicycle loving soul, Carl, (who maintains his own personal finance blog: www.moneymow.com) into my virtual world to provide his take on Denmark, and why its citizens are consistently rated as the happiest folks on the planet.

Oh, but before I welcome you to our discussion, you should know that no money or other compensation will change hands between Carl and myself. We’re just having fun here, hoping to provide you with an informative, enlightening and entertaining read.

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Enter Thy Kingdom!

Welcome to the Kingdom of Denmark! (is that introduction okay, Carl? Too hokey? Do tour guides speak like that in Denmark? No? I should stop now, shouldn’t I? Right.)

BuddhaMoney (BM, from here on in): Hey Carl, in the spirit of talk show hosts, welcome to the BM community! No, scratch that. It sounds ridiculous. I’m trying too hard. Let’s just dive right in, okay? How about we start with you filling in some general background about Denmark?

Carl: Sure! Here’s some general tidbits:

  • We’re a small country, about 5.5 million people living on land that’s about twice the size of the State of Massachusetts (the 7th smallest State of the Union).
  • Our native tongue is Danish, a useless language that pretty much no one speaks outside of Denmark. But mostly everyone speaks English as a second language, which is taught in school from third grade onward.
  • As for placing us on a map, our neighbors are Sweden to one side and Germany to the other.
  • And yes, as you already mentioned, I do love biking! And it’s made so much easier by the fact that Denmark is as flat as North Dakota.

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The (Horrors!) Welfare State

BM: Tell me about the so-called ‘welfare state’, as some North Americans pejoratively label Denmark and the other Scandinavian countries.

Carl: Denmark is definitely a welfare state! But unlike residents of countries that favour more capitalist systems, we’re good with this. I mean, close to 100% of Danish citizens approve of our political system, a system that ensures an acceptable level of welfare for all people living in Denmark.

Not to be cute here, but think about the word, ‘welfare’. Divided in two parts, you have ‘well’ and ‘fare’. We want all of our residents to live well as they travel through life. Because we see this as society’s responsibility, and we are all a part of society. Why this is seen as a negative in some parts of the world is beyond my understanding.

BM: There’s complete consensus then about government support given to people?

Carl: There’s close to 100% agreement that taking care of all members of society is everyone’s responsibility. Sure, there’s quibbling about the degree to which the welfare state should support people but not the fact that it should.

BM: Based on what you’re saying, it comes across as though your political parties are generally in agreement on most issues.

Carl: Hey, politicians are politicians, right? Meaning there will always be differences between the party holding power and minority status parties. But I will say that our political landscape is way less fragmented than that of many other democracies. For the most part, all of our political parties are social democratic. And within the social democratic framework, some parties lean left, others right.

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Free Education For All and Virtually No Debt!

BM: I hear that all education is free. Is this right?

Carl: Yup. 100% free tuition from elementary school through to completion of university studies. Bernie Sanders totally envies us! Hah! Know what else? From the age of 18, as long as we are in school and not living with our family, we get paid $1,000 / month. For those who still live with their family, the monthly stipend is slightly lower.

BM: What! Why?

Carl: The thinking is that this money allows us to focus on our studies rather than working a part-time job to support ourselves, which takes away from study time. Still, we are not prevented from working and some people do choose to work part-time jobs.

Also, unlike North America where so may people live with their parents into their mid and late 20s, most Danish people live on their own by the time they’re 20. Simply because, to a large extent, most people can afford to do so with the government giving them $1,000/month.

BM: It follows then that students graduate from university without any debt?

Carl: Correct. Student loans are available from the government at low interest rates but few people see any reason to take a loan.

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Know What Else is Free? Health Care

BM: Tell me about health care in Denmark.

Carl: Like education, there’s no political debate about the provision of health care. It’s free and we all agree it should be free.

BM: Well, it’s not really ‘free’. Health care is paid for through income taxes, yes?

Carl: Fair enough. That’s right. Just like in Canada. The only medical procedures you’ll pay out of pocket for are cosmetic services. And included in health care is dental treatment. Although this is free only until age 18, after which you pay out of pocket.

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We’re Not Utopia

BM: Not that I want to bring down this feel good story about your homeland, but are there any negatives you see about Denmark?

Carl: No problem, BM! Sure, Denmark isn’t utopia. We have our share of problems too. And the big time problems are similar to what other countries are experiencing.

Take immigration. Owing to increased immigration to Denmark, there has been a considerable rise in support for the right wing (nut) parties, with about 25% of Danish voters backing parties with a nationalist, close the border bent. The unfortunate response from mainstream political parties has been to make it increasingly difficult to immigrate to Denmark. I see this development as shameful. Because people from all over the world make positive contributions to Danish society. We used to be a more open country. Sadly, this is changing.

Then there’s the urban/rural divide. Politically and socially, Denmark is becoming more divided between people living in large urban centres and those living in small towns. Again, sadly, this divide creates more conflict and tension within our society.

And of course, there is the issue of taxes. While we benefit greatly from free education and health care, we pay an enormous amount of taxes! Our tax system is progressive so the more you earn the more you pay in income tax. The downside here is that, as you earn more and pay more in taxes, the incentive to work harder diminishes, because so much of your earnings will have to be paid in taxes.

Like any country with excessively high rates of taxation, some really talented people opt to leave Denmark to avoid paying high taxes the rest of their life.

And the same goes for successful companies. I mean, what’s the incentive to remain in Denmark if an unfair portion of earnings goes to taxes and not to employees or shareholders? Also, high tax rates make it more difficult for companies to attract talent from outside of Denmark, which of course reduces our global competitiveness.

BM: You mentioned that few Danish residents take on student debt, which is amazing when compared to skyrocketing debt rates among North American college students. What about credit card debt? Is this an issue?

Carl: Credit cards are used somewhat but much less than cash and debit, which is much more common. So to answer your question, owing to limited use of credit cards, there’s not much credit card debt. For me, this is a result of strict financial regulation and a culture of low debt that is ingrained in us from the time we are children.

BM: That’s amazing. And smart. And with no to minimal debt, surely this contributes to Denmark consistently rating as one of the happiness countries in the world. What about bicycling? This I suppose also contributes to happiness?

Carl: When was the last time you rode a bike and did not smile? See what I mean! Yes, we love our bikes. Most everyone owns a bike here and rides it! Think of Denmark as having a bicycle culture, whereas you have a car culture in North America. The whole country is flat as a pancake, and the biking infrastructure in the bigger cities, like Copenhagen, is fantastic with whole streets having been cleared to make for larger bike lanes. Like many Danes, I bike to and from work daily wearing my work gear which, for me, is a suit.

Also, and this ties back to taxes, when you consider the amount of import taxes on cars, I totally understand why people choose to ride bikes instead! For example, a Tesla model S that costs $69,500 (USD) in the USA would cost about $118,000 (USD) in Denmark. As for a bike, there are no additional taxes and I assure you that the initial cost, and maintenance fees, are nowhere near the cost of a car.

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Hygge. What’s That?

BM: As you know, one of my recent posts talked about hygge. As you also know, I’m not Danish. Being an authentic Dane, and me being the pretend King of Denmark, I anoint you an automatic expert on this subject. So, please, tell us about hygge.

Carl: Glad to! Hygge is a subject that has been discussed a lot abroad; there are plenty of books about hygge being sold everywhere at the moment. For us in Denmark, it’s part of everyone’s daily life, but we rarely discuss what the concept of hygge means. Everyone just seems to know what it means.

To me, hygge describes a special mood. The closest English word is probably “cozy”, but it is much more than that. I often associate hygge with the picture of being inside during a snowstorm in front of a fireplace with a cup of hot chocolate. It is about the feeling of happiness, trust/safety, fun and relaxation all at once.

We use it mostly as an adjective for different situations. For example, when I describe a nice dinner with some of my friends, I might say that it was ‘hyggeligt’.

BM: Well my new friend, your insights are much appreciated. May your days continue to be filled with hygge!

Carl: Thanks for listening to all my babbling about this tiny country, and may your days be filled with enormous amounts of hygge too!

Millennials Path To Wealth

We all have to learn about money. Well, it’s not exactly mandatory but here’s the deal: if you choose not to learn, if you remain money illiterate, then financial freedom will remain a fantasy.

Now, I’m not saying you should devote all your spare time to becoming a money expert (besides, that’s what BuddhaMoney is here for!). But I am saying that once you start educating your self, and developing a certain degree of competence regarding all money related issues, only then will it be possible to minimize or, ideally, eliminate financial stressors. Only then will you be walking the path where debt is a distant memory, savings are abundant, and comfortable retirement is an option.

Millennial Savvy

Millennials get what I’m talking about. Still, this gigantic, diverse, flock numbering 83 million plus (25% of the American population) and near 10 million in Canada (27% of the population) seems to be struggling with money issues more than the past few generations.

Why?

Hmmm, could be because they’re smarter than Boomers and Generation X and Y folks.

If they’re smarter, then why do they struggle?

North American Millennials (naturally I’m speaking generally here; when you’re describing a 93m strong group, speaking in general terms is about all you can do) do not worship money or make it a first priority. Unlike their parents and grandparents, they do not seek to make as much money as possible while sacrificing other aspects of life; will not take the big salary and perks if it means working for a ‘values deficient’ organization; and do not view the accumulation of assets as defining success.

Boomers, X’ers and Y’ers, may be saying, ‘uh, what exactly is the problem with this newfangled generation? Why don’t they follow our lead?

The thing is, Millennials are wiser than their predecessors. They seek a balanced life, prioritizing relationships and health ahead of money. And they define success holistically: being part of a loving family, reaching personal (i.e., non-money) goals, maintaining physical/psychological wellness, and staying true to one’s faith.


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Enter Buddha

 A Balanced Life Flows from:

Knowing that Greed is not a virtue.

Knowing to Spend in Moderation, being neither extravagant nor miserly.

Knowing not to live life on borrowed money; not to succumb to seduction by material things; not to buy what cannot be afforded; and to use credit Wisely.

Knowing to assume a Mortgage only if you may afford payments.

Knowing there is no suffering in having ‘things’ but there is Suffering in our Attachment to things.


Adding Money To The Mix

Full disclosure: I’m part of the X’er bunch. But this doesn’t stop me from being a big fan of Millennials. They seem to share a collective wisdom about living life, an entrepreneurial bent, and bounds of positive energy that bodes well for the future of a society that, presently, is wayyyyy too top heavy, with too much money in too few hands, resulting in social discontent and political upheaval. Case in point: the U.K. exiting the Eurozone and Barnum and Bailey’s ringleader elected president of the U.S.A.


Chewy Bit

Credit Suisse, Switzerland’s second largest financial institution, released a report in 2015 stating that the world’s richest 1% (0.7% of the global adult population) own 45% of the world’s wealth.

And people with a net worth of less than $10,000 account for a whopping 71% of the global adult population.

http://fortune.com/2015/10/14/1-percent-global-wealth-credit-suisse/ 


Listen BuddhaMoneyLama, we’ve heard it all before; the rich get richer. This isn’t exactly breaking news. And complaining is boring and destructive and it doesn’t help anyone.

Definitely! That’s why we’re moving forward. Not getting stuck on what others have, not complaining, coveting, or carping. But encouraging you to accept what is, then adjust focus to your self. Look at ways in which you can bring more money into the mix. Why? Because money smarts reduces money struggles and contributes to the wisdom of living.

Giving thought and strategic planning to earning, saving, and investing dough is what’s needed if your future entails buying (or renting) a home, creating and nurturing a family, eating well … shoot, even paying the monthly $9.99 to Netflix! (for those of you living off the grid, sure you’ll need fewer greenbacks but you still need some). And for those who want to gain entry to the 1%, well, go for it! With the right approach, big time dough is within reach.

So, ummmm, dealing with the here and now … how do you achieve financial stability, build enough wealth to pay off student debt, support a family, pay for a home, check out of the workforce and fund retirement? Begin by learning more about money.

More is Less

The more you know about managing money, the less stress you experience.

More is More

The more you know about managing money, the more peace you experience.

More is The Real Thing

The more you know about managing money, the more assets to your name, the more you are able to contribute time and/or money to making the world a better place.

Where to Start

1. Make a Budget

Oh, the pain of it! The mind numbing monotony!

Uh huh. Try this on for size: the Road to Financial Independence.

Making a budget is the first step, the foundational step, to taking control of your finances and building wealth. So, for the sake of your financial health, here’s what you do:

  • Buy in to the idea that drafting a budget is good for you.
  • List all sources of regular income.
  • List every regular expense so you know monthly household costs. These are fixed expenses.
  • Once you’ve paid for the fixed expenses, list your financial priorities such as paying down debt, contributing to your rainy day fund, retirement account, or other savings or investment account. Then  determine what percentage of your monthly earnings, if any, you will allocate to each of these priorities.

The amount remaining (after deducting fixed expenses, and contributions to financial priorities) may go toward ‘discretionary’ expenses. In other word, give yourself permission to indulge, to reward your self for your discipline and commitment.

2. Ignore the Jones

Your worth is NOT equal to what you own.

Contrary to claims from Corporate America, you do NOT need a certain toy to be happy or better or good or worthy or noble or likeable. Nor do you need a certain car, house, clothes, perfume, phone, or any other material thing being peddled to you.

So pay little heed to what things your friends and neighbors have. Block out advertising intended to make you feel emotionally insecure; with the solution to your insecurity being to BUY stuff.

Recognize that desire for material things can be harmful, lead you into debt, deplete savings, raise blood pressure and cause general havoc with your well being.

You want early retirement, financial freedom? Stick to your smart, thoughtful, budget.

3. Develop Champion Saving Habits

Regardless of how much earn, some of your earnings should be going into a savings account. If you’re just starting out, and your income is lower, you still want to contribute something to savings. If that means reducing expenses, then bite the bullet and give up some spending.

And when your earnings increase, don’t make the mistake of increasing spending significantly. Sure, indulge a bit more if you like, but only if you’re sticking to budget AND also increasing savings and investment contributions.

4. Take Control of Your Destiny

Plain and simple, like most parts of life, financial success is up to you (still, know that you’re not alone, that BuddhaMoney will happily walk by your side!).

It’s up to you in the sense that you have the choice as to whether or not to take responsibility. No one is forcing you to spend money on anything other than true needs (um, so sorry but bling and the latest tech gadgets are not needs).

Choose not to spend unwisely, Choose to save and invest … this is you taking responsibility, assuming control of your financial life. This is you realizing that life is an opportunity and you’re in charge of deciding how to deal with this amazing opportunity.

I’m not saying it’s easy to give up spending today for some seemingly mythical retirement many years or decades into the future. But if you can tap into a long-term vision of your life, balance out todays wants with caring for your future self, you’ll experience the joy of feeling (and knowing) you’re in charge of your destiny.

And the thing is, us humans, when we feel like someone else is running the show we call “My Life”, when we operate haphazardly, lacking a certain degree of order and structure, then stress, anxiety and frustration levels all increase.

But when we have some measure of influence over “My Life”, when we make money a priority, bringing it into the holistic mix that defines success, then this in itself empowers us to achieve our goals and realize a sense of inner fulfillment, harmony and success.

 


Chewy Bit

For those interested in deepening their knowledge of physical fitness, check out this comprehensive, hugely informative guide to getting in excellent condition, i.e., cardio, strength, flexibility, nutrition and lifestyle:

Ultimate Guide to Fitness

Full disclosure: we’re not receiving anything on our end for this link, other than a reciprocal link.

 

 

 

Yoga Makes You Wealthy

Here’s some news to light up the BuddhaMoney smile: in less than two months of blogging, BuddhaMoney has cracked the top 100 of…

Here’s some news to light up the BuddhaMoney smile: in less than two months of blogging, BuddhaMoney has cracked the top 100 of personal finance sites [http://blog.feedspot.com/top-50-personal-finance-blogs-wor…/], debuting at #88.

Well, we could not be more humbly appreciative of all our enthusiasts who are spreading the good BuddhaMoney word about how to achieve Balance and Wealth. Thank you.

And now, back to our regular feature …


Yoga Rocks!

Yoga is trendy. Yoga is fashionable. Everyone is into yoga! You do practice yoga, don’t you? Oh my goodness! You’ve never stood on your head, pretended to be a tree, or pretzled yourself into Gumby worthy contortions? How is this possible?

Well, you must, you absolutely must try yoga if for no other reason than the clothes. Have I mentioned the clothes? Oh, the outfits you can buy! They’re reason enough to join a yoga studio. The fun part is that you get to spend silly sums of money on insanely over-priced tops, shorts and pants stamped with the corporate brand identifier of your choice. And the brand, naturally, tells us to which group you belong, reveals your status, and informs others what they should think of you. Wearing the right brand in itself is enough to get endorphins flowing and make you feel good. Never mind you’re blowing up your monthly budget and setting back your wealth achievement goals. See what I’m saying? What’s not to like about yoga?!

Breathe In … Breathe Out

Uh oh. Right off the top, I’ve slipped into sarcasm. Was that necessary? Hmm, maybe it’s best if I take a time out here, and defer to my wise friend who will calmly, rationally, tell you a little something about the true meaning of yoga:


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Enter Buddha

Expansion of awareness is the primary goal of yoga. As consciousness expands, so does our ability to deal effectively with the concerns of everyday life.


Right. And one such concern is money, which allows for putting a roof over your head, food on the table, and reasonably priced clothing on your body: the necessities. In a moment or two or three, I’ll talk more on this point, how yoga leads to expansion of awareness that, in turn, leads to increased personal wealth. But first, I’m getting the shoulder tap again:


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Enter Buddha

The yoga tradition acknowledges the realities of material existence. In this regard, yoga encourages us to skillfully cultivate all four components of a fulfilling life: spiritual growth, meaningful work, pleasure, and prosperity.


A Visit to the Nunnery

Some eight years ago, I attended my first yoga class. The type of yoga being taught was Hatha Yoga: a gentle system that includes yoga poses and breathing exercises designed to bring peace to the mind and body.

Class was held in a room located in a wooden building home to a nunnery. A perfect setting, with the quiet spiritual element evident immediately upon entering.

There I was in my no name sweatpants and t-shirt. Feeling out of place, I intently watched the soft-spoken teacher for clues as to what I should do next. She would perform each pose and explain what we should be doing, how we should position our hips this way or move our torso that way.

The different poses we went through made me feel like I was playing a one person version of Twister, marketed in the 1960s (ya, I know, I’m going way back here) as ‘the game that ties you up in knots’.

Struggling to imitate the teacher’s movements, and increasingly confident that I had no idea what I was doing, I welcomed the announcement to lie on our backside for the final pose, Savasana.

We were instructed to place hands away from our body, feet shoulder width apart, and eyes closed. Within maybe 30 seconds, I felt the sensation of my body sinking into the ground. I was so, so, so relaxed.

My body limber, mind quiet, no stories bouncing around my head, no thinking about past events or planning for the future. I was purely focused on the moment without even trying. It was a strange and awesome feeling. This, I imagined, is what inner peace feels like. How nice.

After class ended, I watched others press the palms of their hands together in front of their heart, then approach the teacher with gracious words of appreciation for her instruction. I did the same.

And ever since my first and only yoga inspired nunnery visit, I’ve made practicing yoga a part of my life. Because I thoroughly enjoy the unbelievably peaceful feeling that consumes my mind and body both during and after each class, improved flexibility and posture, muscle strength, deeper sleeps … the benefits go on and on.

Expanding Awareness, Building Wealth 

Okay, fine. Good for me, you may say. But how exactly does yoga make you wealthy? Do yoga teachers freelance as money managers, offering stock market tips after class? Ha ha, hilarious.

Here’s the thing: practicing yoga is all about nurturing positive mental energy. Enhancing clarity. Sharpening focus. Taming disruptive emotions. Cultivating discipline.

When we walk this kind of path, we expand our awareness. And expanding our awareness means we better understand what is coming at us, be it our own thoughts, our emotions, other people or circumstances. Then, we find greater balance. Our judgment improves, we make smart decisions, we are better positioned to deal with everyday life, including investing and money management issues.

Now, I’m not saying that balance cannot be found through other activities. Of course, there are a thousand and one ways to find balance and if you have found one or more, then good for you (please share your stories on Community Forum).

I’m just saying that yoga helps me stay grounded, helps me bring my best game to investing and money management. Meaning, I make calm, rational decisions about my holdings. I do not react impulsively. I do not get caught up in stampedes when markets are whip sawing one way or another. I do not panic when recession strikes, stock market falls off a cliff and my statement shows a whopping decrease in value of my portfolio. I objectively review information, assess the big picture (i.e., macro-economic climate and company specific fundamentals) and make decisions in a patient manner, keeping the long term in mind.

Retroactive Justification

Oh, and, you know that sarcastic diatribe I started this post with? Well, in the spirit of full disclosure, I have to admit that I did buy a pair of $75 yoga branded shorts. That said, I’ve had these same shorts for more than five years, they’ve seen many a yoga class, and they’re still in one piece. So, I’m retroactively justifying this purchase based on the value I’ve received from the shorts ($75 for 5 years = $15 / year). Ahhh, the power of rationalization! Well, while I aspire to be more like Buddha, for now I have to deal with the challenges of my own humanity. Namaste!