Not very surprising, when you can borrow hundreds of Euros just by sending an SMS. It seems that predatory lending is not only limited to the US of A.
I just hope they don’t start offering subprime mortgages and instant credit card approvals (with obscene interest rates). I haven’t been here long but it seems people are a little more educated about their finances.

By the way, first!

They also spend beyond their means every weekend when they go out to bars.

It is an interesting drinking strategy to stop only when you have run out of money. All it takes is a little alcohol to forget the consequences.

It seems to be some sort of entitlement mentality. That they deserve it.

It’s interesting that people from other western countries go abroad on holiday expecting to pay more due to ‘tourist trap’ pricing. But when Finns go to other countries on vacation, it’s like a bargain—anything is cheaper than what Finns pay for everyday items back home in Finland

So, foreign vacations for Finns are like binge parties. The idea is to utilize the limited time to take advantage of low-prices routinely enjoyed by people who live in —e.g. central Europe. Unfortunately, Finns are restricted by Finnish net-salaries; not central European ones. Hence, the debt

Also, it’s a great time to buy car-loads of low-priced consumer goods and bring them back to Finland—or buy a car for that matter; despite Finland’s illegal car tax ripoff, it’s still significantly cheaper to buy cars abroad than in Finland. The restaurants on Silja Line are filled with Finns discussing their grand purchases…and grumbling about why they can’t enjoy the comparatively high, central European standard-of-living back home in ultra-high-tax Finland.

Once in a while Kristian gets it right. This is one of those times.

You don’t have to spend a lot on your vacation!
There are other, chip alternatives to enjoy yourself!

http://www.hs.fi/english/article/Summer+news+about+Finnish+men+at+work+/1135229325620

The good news is that low consumer prices can be enjoyed even in a high tax social welfare state such as Kristian’s favourite, Germany. We had a nice meal down in Kreuzberg for 22,50: an exquisite pizza and an ok pasta. The VAT was 19%. Alcohol tax certainly plays a part, but let’s be honest, for our caraphe of cheap chianti it would have only been a couple of euros. Why is it, then, that one easily pays twice as much for a similar meal in Finland and why is every bloody restaurant owned by S-group?

When you’re dining on a budget just about anywhere, you’re unlikely to be served by a native of the country. Could our relatively low number of immigrants be to blame?

As for other stuff, things aren’t quite so peachy. I checked the electronics stores and found out that I could get many items for less at verkkokauppa.com. I should mention that checking it via GPRS roaming was sauteuer, as was the Wi-Fi at the hotel. Mein Gott! I also mentioned the Rioja: 20€ at KaDeWe, 16€ at Alko.

#5: Oh yeah, every man is a potential rapist. Good to know that wing of feminism is alive and well. They indeed deserve Loka-Laitinen.

What, no bashing the USA here for overspending? Slackers.

Caraphe?

#8
Just wait a little bit, Russia and US will appear somewhere around comments No 16-17…

#9: It seems the French word is not used in English. My bad.

#8: We’ve all wayved the French white flag of surrender. You can tell it by our superfluous use of French words.

#1: Are Finns careful with their finances? Yes and no. The housing market is insane. I would advise against buying from the Helsinki area. Instead, rent through your company as a “työsuhdeasunto”. It has truly significant tax advantages. My flat’s taxation value is less than half of the rent (which isn’t terribly high for the area).

#6: Too bad I wasn’t accompanied by Punter. He would’ve quickly negotiated the price to about 50 cents, Aussie style.

Would it have anything to do with the fact that credit cards are the main way of paying for things while abroad? Unless you bring cash or traveller’s cheques, then you are using the plastic.

At X-Mas time, domestic bank cards and store charge cards are likely more in use.

7: I didn’t read it as a feminist man-bash. More as a rather incestuous article, almost an in-joke, really, about the nature of Finnish journalism. Kind of like the stories about how “the car veered for some unknown reason into the oncoming lane”…

Men kill in the active voice, women get raped in the passive voice. Doesn’t seem really to matter who writes the stuff – that’s just the way it gets written up.

Well, for Russians Finland seems to be quite a cheap place to stay and make holiday. Someone even proposed to prevent them from buying mökki’s in Finland. Guess the commies here are afraid of Russian die-hard capitalism.

On the other hand, US citizens first should pay there own debts before considering to buy another home somewhere else. Maybe going to war against Iran can deter from the domestic crisis in US with the housing bubble bursting.

Finns aren’t familiar with money management. Money, in fact, is quite a new thing for Finns. Coincidentally, so is going abroad.

Now, in order for an ordinary Finn to not spend too much money considering how much they make is already in ruins if they bought a house. The problem isn’t vacation, the problem is low income and especially limited funds after taxes and necessities. We’re used living with credit cards or loans. None of us will stumble into a pile of cash or a reason to believe that should I save 5 years, I’ll benefit from it.

In fact that’s the only thing we might be capable of, saving. Investing is something we don’t do. If you can accumulate an extra 5000euros a year, are you going to risk it investing? Considering the fact that we don’t do it, it means we are less likely to succeed in it with no experience. So we rather just save the money. But because we don’t invest it, we won’t get the experience or learn about money in the future either. Why not just use it and travel somewhere?

Just ask any Finn, what is a stock, how does the market work, what’s the idea of it, and you’ll soon find out that very few understand the basic concept or even the definition of it. It’s rather “it means the rich get richer and the poor poorer”. That’s it. In fact you’re an asshole if you have a portfolio. Rich bastard. Stealing from me. Thinking he’s smart. Jeesh…

“There are other, chip alternatives to enjoy yourself!”

Indeed, in the old days, there used to be “puukkoja ja puntareita ym. virvokkeita” available at Kauhava station. (Puukko’s, steelyards and other refreshments.)

Wir kommen von Mittelmeer und habe keine mittel mehr

Freeridin’ Franklin: “The good news is that low consumer prices can be enjoyed even in a high tax social welfare state such as Kristian’s favourite, Germany.”

Yes, that’s right, but Germany’s overall taxation is still significantly lower than Finland’s—about 9-points.
http://www.nationmaster.com/graph/tax_tot_tax_as_of_gdp-taxation-total-as-of-gdp

I’ll say that if Finland gets down to that level, then it will also experience a high standard-of-living. In fact, Finland’s should be lower than Germany’s. Of course, Germany’s could stand to be lower than it is now.

FYI, Caraphe/carafe is indeed the correct term used in English. It’s relatively common.

Annoyed Finn: “just ask any Finn, what is a stock, how does the market work, what’s the idea of it, and you’ll soon find out that very few understand the basic concept”

I know plenty of Finns who are capable of planning and managing their finances. They all moved outside of Finland.

#18: Most importantly, the Finnish retail cartel on groceries and other essentials needs to be broken. Prices of e.g. consumer electronics are quite competitive already. As for your pet peeves, I’m sure that car taxation will be revised in the near future. I wouldn’t mind scrapping the alcohol tax but as long as the retail sector remains cartellised, I’ll prefer Alko’s monopoly over the S-viina cartel.

I plan and make all my major electronics purchases well outside of the borders of Finland. Usually while on summer vacation “home.”

Shh…

>>>>19.

FYI, it is “indeed” relatively common among dyslexics, non-natives, typo specialists, and simple illiterates, but as Dave was bluntly pointing out, it is “indeed” spelt with an F and an E – carafe.

Probably from the Arabic gharafa, meaning to draw water.

“A little learning is a dangerous thing”, as we see all too often. “Drink deep, or taste not the Pierian spring. There shallow draughts intoxicate the brain, and drinking largely sobers us again.” As Alex once wrote.

Lets all summarize

Herkku thinks “predatory lending is not only limited to the US of A.” they can’t help themselves? guess he thinks we are all dumb to be taken in.

Fred thinks we all go to bars to drink. No way, we go to bars to party with 30 drunken Sailors. Rum is cheep. Vodka is 2 bucks a liter in a plastic container.

Kristian thinks Finns leave the country to party and buy stuff, and finns who have the means to manage cash left the country.

Freeridin’ thinks low consumer prices can be had…somewhere, but don’t buy in Finland, just rent and be poor.

Annoyed (the one who puts his point in the first line…thanks) thinks Finns aren’t familiar with money management.

Kristian thinks they all left the country again.

Dave can’t comprehend buying goods at cheep places.

And I just want my Hummer, plus a place to live, thats not been bulldozed. Must have more rum.

1. “Caraphe” is the French spelling of “carafe,” which is used in English.
2. Great social analysis here, but Herkku and Dave the Rave seem to be the only ones addressing the point of the article, which is not spending, or even overspending, but debts that go into collection. Is debt collection a growing industry in Finland ? What causes people to get behind on payments or to default ?

“I just hope they don’t start offering subprime mortgages and instant credit card approvals (with obscene interest rates)”

I think Finland is full of subprime mortgage:

-1: Lots of houses put on the market are set with very low price so anybody with any credit history or income can borrow. The borrower need to contract with the bank a very low amount (which might even be backed 30% by the government ) and the rest is paid to the construction company. An example speaks better:

69m2 flat :
Myyntihinta 47 670,00€
Velaton myyntihinta 317 800,00€

so if you go to the bank and get a 47 670 euro loan, the seller will be more than happy to sell you the flat…usually the construction company have borrowed themselves in low interest rates and have it fixed for 3-5 years to make it attractive.

We could even say that in until 2005 interest were very low to that you add 3 years…you get 2008…so you can expect a subprime spillover in housing during that year, let’s say highly probable.

-2: I think 98% of all Finnish mortgage are variable rate mortgage, usually 1 year fixed rate (12 month euribor), some even get 3 month Adjustable Rate… So the debt level is increasing every year and is slowly hitting the Finnish consumption…since they still want to get on with the same level of living or even better they get on with more and more debt…that could explain the ever increasing default…

-3: house price have been on the increase and the economy is at its peak: it gives a sense of confidence and push people to get on spending and get more debt…

I wish I had gone on an expensive trip. The weather in July was horrible and now that work has started the sun finally shows up. A wasted holiday.

Then again, I really couldn’t afford a trip abroad.

In 2006 Finland’s total tax burden was 43.5. In Kristianized figures that’s about 48.3 though. Finland is one of the few countries in which the taxes went down between 1995 and 2005. But here again we have to remember that if we Kristianize the trend the taxes actually went up by 1 342%.

http://www.oecd.org/document/40/0,2340,en_2649_33931_37520552_1_1_1_1,00.html

(The Krisitianized figures can be obtained from this site only.)

It is true that very few finns understand how the economy works and those few who do have moved away. That pretty much explains the horrible stage the the finnish economy is in. Take last year for example. The finnish economy iungrew by 1200% making it so small that you can see it only with a looking glass.

to #27:
The economy is export driven. The global economy is still supporting the finnish economy for the moment especially China and India. But craks start to appear in Chinese economie: inflation accelerating, an unsustainable low currency, a stock market and asset buble and a social time b*mb. Regarding India: same for inflation, and asset bubble. Outsourcing company unable to grow and profit stagnating, competition stronger from west countries (Accenture/IBM) and social wealth division…

There are risks in the forecoming years as the finnish economy is in the brink of overheating added to that wrong economical and tax strategy and a mass retirement around 2010.

But for now just enjoy the good time, look your neighbourgh just bought a Hummer on a GM loan..just get a bigger loan and by a bigger Hummer…what the F**ck?!! he bought a cottage…buy a bigger one…just fake you income to the banks (they won’t check) ;-> Hei …that’s a scenario that hopefully won’t happen…

“few finns understand how the economy works and those few who do have moved away.”

Nameless one, don’t be fooled into thinking that those corporate chiefs who own expensive cars, boats and homes—yes, Finland has some of those, too, in case anyone is wondering—are a sign of Finland’s increasing wealth, because those are merely high-salaried individuals who work for corporations.

The problem is that those corporations are owned by shareholders who live in low-tax lands (i.e. almost anywhere outside of Finland), and THEY receive the profit dividends. For example, Nokia is 90% foreign owned, if I remember correctly.

And those profit dividends contribute to the tax bases of THEIR respective countries. That means most of Nokia’s profits are taxed abroad, rather than in Finland.

Consequently, the ordinary, low-income worker-Finn is stuck with one of the highest tax burdens in the world; after all, someone must fund the infrastructure, right?

“The economy is export driven. The global economy is still supporting the finnish economy for the moment especially China and India.”

Excellent points, russia. A country can experience tremendous growth if it can benefit from larger markets. In Finland’s case, it benefits from the EU membership—both, in terms of inter-EU trade and international clout. But, with Finland’s bad tax policy (among other things, like the cartels Franklin mentioned) then the growth doesn’t necessarily contribute to a higher standard-of-living.

to #24:
“I think Finland is full of Subprime mortgage”

Not only does the Finland face its own subprime crisis, it could be far worse than in the U.S.

With higher interest rates yet to have their full effect, mortgage arrears are likely to rise further, while unsecured bad debt might start to rise again too

I just have to Kristianize certain misunderstandings here: Some people may think that the finnshit share-holders of Nokia gave up their shares for a market-value price. Not true. In fact, it was the Jewish owned communist money disguised as “capitalistic” who bought the Finnish national property, probably at gun point. Wait … sorry, it wasn’t the Jews after all. It was the Finns. Or Americans. Or Germans. I have to get back on this. Anyway, we Kristians know for sure that somebody did steal the Finnish economy once again.

The Finnish economy as many other like US, UK, Australia are based on debt burden. Debt is all ok if the economy is on track and the investment sound. Is it in Finland?

The economy as it is today is surrounded by risks :
– China/India overheating
– Households over endebted
– Stocks (funds – finnish funds) being funded by wall of liquidity created artificially (yen carry trade, credit derivative etc…)
– mass retirement : not as people say, lots of money will be inherited…untrue.. lots of money needed to take care and fund the retiree
– Ridiculous Car tax (;->), cartels (S-K- Markets, Kone, etc…)

It is true that the finish economy “belongs to foreigner”…or “stolen”…in fact, if you remove direct foreign investment in Finland you get a total collapse of the economy as any way other economies will do too.

“Communist money”….i heard that russians are slowly buying the best lands in Finland…they are flush of money… i think they could if they wanted to, buy all the interesting assets in Finland except Nokia which has already been sold to US i think.

Nope, the Finshit economy is one of the kind, plays in its own league. We Kristians think it’s a sacrilege even to hint on the possibility that another eceonomy could be anything like the Finnshit eceonomy. In fact, I have to give you eternal flames because suggested so. Sorry. PlimP! (That’s a magic word, becauser it ‘s the same whichever way you say it, you know!)

Hah, Plimpmilp, was the magic word. You bew it, mi sir. Now take this: the Finnish economy sucks, sucks, sucks.

WE all kow that cartels are specialities of finnish industry i.e Forest industry or Kone or (not yet investigated: S-K Market for price fixing ;-> or retail in general…)

We have now ex-state company “Neste oil” being put in the same bag…:
The Finnish Competition Authority says Neste Oil must change fuel distribution agreements with service stations. An investigation shows most of the deals are against current legislation governing competition.

What i like is that they investigate when the harm is already done (i.e Same as the US did in Microsoft vs Netscape…)

Can one explain to me why is that politicians are dragging their feet concerning :
– Car tax
– Land tax
– Construction Permit reform
– Alcohol monopoly
– Gambling monopoly
– Immigration reform

The finnish economy could have been good if the fondation was rock solid but it’s not since this government is far too much controling it trying to inject or withdrew liquidity through various TAX or financial tricks…It’s on the way of improving but its progress could be badly hurt if not done fast..as time is running out.

Yes indeed, we, the finns, don’t want to be poor. I mean, take any Norwegian. Thay have alot more moony. They do. Miksi helvetissä? Mistä vitusta siinä on kuysymsy=?

Kristian, you are almost a lunatic. You decline to see business opportunities in price differentials. You seem to know something about structural engineering, but then make claims that totally invalidate that impression. You complain about the entrepreneurial hardships in this country, but really don’t know a shit about being an entrepreneur – anywhere. Are you capable of anything else but whining? Have you ever risked anything? Probably not.

Life in Finland is astonishingly uncomplicated, very safe, and everyone is trusted by default. Try to order k€20 worth of building materials by phone in any country; let me suggest: Germany. Here you get it delivered and billed with no other questions asked except for the address. Oral agreements are honoured – I first felt that very scary, but later we had our summer house built that way.

i am not claiming that Finland is a paradise, and we have experienced some problems here. Nevertheless, this is a damn good little country.

I’m a bit late here, but I think one of the reasons not suggested here yet (was unable to find it glimpsing through the comments) is that Finns get that vacation money which is almost half of a normal months salary (or is half?).

With that money in our account, it’s no wonder we go on a spending spree…

#30: You fail to take into account that much of Nokia’s stock was bought at all-time high prices, around 50-70€, unlikely to be reached again for a very long time. It was a truly remarkable transfer of wealth to Finland. Every buttfuck village in the country seems to have at least one Nokia milliomaire.

Unlike you, I don’t have a mercantilistic/protectionistic view of the global marketplace. We’re all for sale here and it’s up to us to make the best of it.

“Dave can’t comprehend buying goods at cheep places.” winturd wrote.

No, if you had your “smart” glasses on, you would have read the exact opposite.

# 36

Passing by,

The politicians are “dragging their feet” concerning

- car tax
- land tax
- construction permit reform
- alcohol monopoly
- gambling monopoly
- immigration reform

because each of these issues serves the politicians’ own interests best when the situation stays at its current state.

Why would the politician give up on the lucrative control of money flows, when the median voter still believes that the current Finland is the best possible one? You can read from this blog’s discussions how vehemently quite many people support the basic belief that this socialist inefficiency is the price an individual has to pay for a rule of law and relative safety.

The politicians’ interest concerning these issues is to make the median voter believe that each politician is doing everything possible to look after the voter’s interest, while in reality keeping the situation basically unchanged or worsening to the voter.

The current non-socialist government, ostensibly pro-market, seems determined to:
- increase taxes collected from cars and driving, but not really caring if the measures clean the air
- limit the competition between local governments and therefore
bolster further the construction regulation leading to
- higher priced cost of housing and
- increases in tax on real estate
- hike the alcohol taxes and therefore bolster the state monopoly
- fight the EU attempts to break the state gambling monopoly
- deport the few uninformed immigrants / refugees attempting to join our economy. With the exeception that they have a pre-arranged job before arriving to the country, like the Thai berry pickers or Indian IT experts. The gastarbeiter-idea is very alive and well.

But again, it is nices to keep the basic belief that the politbyro is there to serve us, not to suck us.

#42: Good point about the Politbyro. As it happens, I trust the Almighty Invisible Hand even less, though.

The tax on land is indeed too low. Land owners can and do stick to their property for decades waiting for the prices to go up.

Very nice site!