Tuesday, 03 June 2014 01:52

Barbara Daroca: Everything’s Possible


Everything’s possible...

... like writing a blog post on a tablet behind ING’s guest desk at LuxExpo while my colleagues give out start numbers to eager runners.

... like participating in your first marathon when you’re two years old.

... like realising your dreams.

If you put your mind to it, everything really is possible.

I’m sure you will recognise the motto of our latest campaign surrounding the ING Night Marathon. Many of you have watched the video (see below). Some maybe even participated in the event, accelerating and slowing down as they saw fit.

Spread the word around! Everything is possible. A little planning ahead; a strong belief in what it is that you’re trying to achieve; support from those around you; a cool head when things don’t happen as you’d hoped; and we can all make great things happen.

I stress the point of planning. Many big decisions are financial decisions, so be smart and plan them accordingly. Your bank should be among those around you supporting you with relevant advice and clear information. It’s never too early to start saving. Don’t be afraid to ask.




As we are now in full swing with the preparations of this year’s edition of the ING Night Run, I take the liberty to repost a story by Nathalie Spencer, Behavioural economist and independent researcher, that was posted earlier this year on the site which provides a fascinating insight into how children think and their understanding of the value of money.

Trying to decide whether to buy a new shirt while shopping with my niece, she suggested I should “just put it in the basket!"

The 5-year-old's voice of authority urging me to pile the trolley up high was not a sign of greediness, rather it demonstrated the relationship children have (or don’t have) with money. A growing body of research has been exploring ways to teach children about money. And some of it suggests that a shopping trip was actually a good moment to learn.

Learning how “three can be less than one”

Making smart money decisions can be challenging for even the old and wise – and for children, concepts that adults take for granted are ideas that need to be learned.

The seemingly simple activity of saving up for a new toy (or a new shirt), for example, requires a child to understand the meaning of exchange, have a sense of their future self (and the relation to their current self), practice delaying gratification, understand the concepts of now and later, have good counting skills and understand that denominations represent value (it can be tricky explaining that three pennies is less than one pound even though three is more than one).

In addition, under-8s are not yet able to effectively distinguish between wants and needs, according to a May 2013 publication by the Money Advice Service. My reluctance to purchase the shirt was because although I wanted it, I couldn’t rationalise to myself that I needed it. For children under 8 years old, this distinction isn’t so clear.

Learning from doing what I do

A growing body of research has been exploring the effectiveness of formal financial education across a range of ages and into adulthood. In January 2014 alone, two major studies were released – one finds that many traditional financial education initiatives have virtually no effect on financial capability and another for the World Bank finds they tend to improve some skills (saving and record keeping) but not others.

It is likely that providing information alone is not sufficient to teach young children about money issues, partly because they lack the context to apply the information.

Children learn through imitation (copying others) and induction (noticing patterns in experience), explain the authors of the Money Advice Service research Dr David Whitebread and Dr Sue Bingham of the University of Cambridge.

Because children naturally imitate the people around them, they can pick up financial behaviour and decision-making from adults.

Research cited here suggests parents are also the key source for information for high school students and that parents’ saving behaviour influences that of even their adult children.

Learning through pocket money and chores

Giving a child pocket money for chores can help with counting skills and create a situation in which to learn about concepts of income and work, according to research presented at the Royal Economic Society. The findings also suggest that habits learned in childhood appear to have long-lasting effects in terms of financial behaviour and decision making in adulthood.

Furthermore, academics in Italy also report that pocket money is linked to an increased likelihood to save as an adult.

Learning through waiting

To help lay the foundations for healthy saving behaviour, it might pay to teach children strategies to help them delay gratification.

For example, help them to shift attention from the rewards to the actual process of waiting.

As described in a previous eZonomics article Why trust is important for marshmallows and investments, people are more likely to delay gratification if they trust that the reward will eventually come.

To that end, providing a stable, reliable environment (so the child has faith that the future reward being saved for will indeed eventually be available) may be helpful.

In a similar vein, Sarah Brown and Karl Taylor of the University of Sheffield found that, for older children (aged 12-17) in the United States, pessimism about their future life and education was linked with a lower level of savings than youth with brighter expectations.

Learning through banking

Children may also benefit from having their own bank account from a young age.

Back in 1997, researchers wrote about a positive correlation between saving in an account as a child and later savings in adulthood.

Learning from hitting the shops

Finally, situations in which children can learn by doing are shown to be very powerful.

It might be as simple as letting a child hand the money to the cashier at the ice cream counter and accept the ice cream cone in return. This teaches about the concept of exchange and helps reinforce that money can only be used once - it doesn’t get returned once it has paid for something.

Another idea is to include children in the household shopping. Again it provides an opportunity to practice many of the skills and concepts and provides a fitting setting to discuss the difference between wants versus needs.
But watch out: If your young shopping companion is as persuasive as mine was, you may find some of your “wants” making it to the check-out till. I took my niece’s suggestion and bought that shirt.



Watching children frantically search for Easter eggs of all kinds, shapes and sizes made me reflect on the saying: Do not put all your eggs in one basket. How well this explains the reason for diversifying risk in your investment portfolio.

Below please find an article written by our ING Group economist on what diversification really is.


“Spreading risk” is a well-worn mantra and investors are often prodded to diversify. But what does diversification really mean? Diversification in saving and investment terms means avoiding holding too much of one’s wealth in only a few assets. Yet this seemingly simple statement holds many implications for investors to consider. In investing literature, diversification is often used to warn against owning only a few shares rather than holding several shares or investing in a market index fund.

However, diversification may also refer to mixing investments between shares, bonds, property and cash or even opening savings accounts with several banks if you have large amounts of cash earmarked for different purposes.
Thinking about the principles behind diversification may help you understand the potential dangers associated with buying shares in the company or industry you work. Likewise, it may clarify the implications of owning a house if you are tempted to buy another property to rent out in the hope of making money or providing income in retirement.

Why diversify?

The theory goes that diversification helps to spread financial risk by mixing a variety of investments. The idea is that prices of different kinds of investments (such as cash, bonds, property and shares) tend to be driven by different factors. Or in the most basic terms, if one falls the other might rise, or at least lose less.
One way to think of diversification is that it is the opposite of “putting all of your eggs in one basket”.

How much of any one asset should be held?

The amount of diversification a person can and should take depends on many personal factors. When people are young and with few commitments, such as children to care for, it can make sense to build investments – perhaps in a pension fund – with a very high concentration in shares. Older people may wish to diversify their investments into more than shares. This is the main idea behind lifecycle investing, which can be thought of as form of diversification.

Three examples where diversification should be considered:

1. Don’t put all of your basket into one Apple

When investing in share markets it’s sensible to diversify across companies and industries. However, thinking traps such as “availability bias” can skew our judgement because we may favour investing in shares regularly mentioned in the media. In October 2012, for example, according to portfolio monitoring site SigFig, nearly 17% of all individual US investors held shares in Apple, three times as many who owned Google. The share price that month reached over $670, six months later it had slumped to under $400 – highlighting the perils of putting so much faith even in a wildly-adored company.

2. Keeping the right company

Another instance where the merits of diversification are often ignored are company share schemes. Because of these incentives employees may have a large proportion of their investments tied to the performance of just one company – they are said to be “over exposed”. This is a risk (as this poll suggests) they may never consider otherwise. What if the company fails? Employees could lose their jobs, their savings and their pensions in one tragic turn of events.

3. Home or away?

Investors should also consider different geographic regions to mitigate the effects of “home equity bias”, the tendency to over-invest in your home country. Developed markets such as Europe, the US and Japan may offer slower growth but more stability. Conversely, emerging markets such as India, China, Brazil and Russia may offer the potential for more growth but also more risk.

In any case, be vigilant...

You may have heard that the value of investments can go down as well as up, but in some instances this can mean all your investments. The recent financial crisis in 2007/2008 saw shares in all sectors across the world slide, as well as commodity falls and a property slump.

So be warned – as ING Group chief economist Mark Cliffe says in his sixth video lesson from the financial crisis that, in extreme circumstances, even the most diverse portfolio can crash.



This past weekend I opened up my brand new Panini FIFA World Cup Brazil Official Licensed Sticker Album and started opening up packs of stickers. It takes me back to those days in school looking to trade for the last stickers that were still missing just a few days ahead of the big event…

It’s a crazy exercise in many ways. I read somewhere on the Internet that people spend around €500 per album these days. I guess it partly depends on how many people you can trade with, on how fast you want to complete it, and on your disposable income. And there’s where the economy lesson kicks in.

Children today can earn valuable insight in how the economy works while finishing their album!

- They need to save their pocket money to purchase sticker packs (savings & investments)

- They need to search for bartering partners and develop negotiating skills to trade the necessary stickers (sale & purchase)

- They quickly understand that desired stickers (such as team insignias and super stars, or the last few to finish off the album) are often times harder to obtain and therefore also more “expensive”, being traded at 2 for 1 instead of 1 for 1 (supply & demand law)

I remember bringing different friends together because I had the sticker friend A wanted but I wanted the sticker of friend B, who in turn wanted a sticker that I didn’t have but friend A had. If there’s a will, there truly is always a way.

I expect I’ll spend my Easter holidays negotiating with my niece and nephew to complete the double sticker stadiums of the first pages of the album. I love bargaining with them – they’re ruthless! And if we’re still missing some in May, we’ll keep an eye out for the swap meets that are organised all around Luxembourg. Maybe I’ll see you there...


The great thing of working for a large international institution is that the global Corporate Social Responsibility projects really make a difference - my favourite project must be ING Chances for Children. 

ING Chances for Children unites ING and UNICEF and since 2005 we work together to give children around the world a better chance. We believe education is a fundamental building block for the development of societies. Access to education can be life-changing and help to equalise opportunity, leading to economic growth and the development of a healthy society.

We chose to partner with UNICEF towards the fulfilment of a shared vision of providing a better future to disadvantaged children around the world, thus contributing to the 2nd Millennium Development Goal - Achieve universal primary education.

Since 2005, the total donations world-wide amount to over €26 million - an impressive amount, I think!

As ING Luxembourg over the years we have of course also participated with a number of internal and external actions. In 2013, we decided to donate 1 eurocent to UNICEF for each transaction that was made with an ING Luxembourg Visa card. This action was a great success and we were delighted to give UNICEF a cheque for €32,500.

As a result of this success, we decided to repeat the action in 2014. From this, it should be possible to raise enough funds to enable UNICEF to build a school with 3 classrooms including school equipment, sanitary facilities, a water pump and also cover labour and transportation costs.

To learn more about the project you can visit the Unicef website at

And if you want to contribute, the only thing you need to do is get out your ING Luxembourg Visa card at every possible opportunity!


By partnering with the Abbaye de Neumünster, ING Luxembourg is combining the best of both worlds!

ING Luxembourg recently announced that it is supporting the Cultural Centre and Abbey of Neumünster (CCRN) in Luxembourg-Grund. The partnership, which began on 1 January 2014, is over a two-year period and will strengthen links between two worlds: that of finance on the one hand and that of art and culture on the other.

At ING Luxembourg, we are absolutely delighted to be part of the exclusive group of partners of the Abbaye de Neumünster, a major and significant historical site of Luxembourg city. Enjoying a spectacular setting, this architectural ensemble that has experienced four centuries of turbulent history, is now devoted to cultural and artistic projects (music, theatre, dance, exhibitions) from around the world and is at the same time a wonderful place for large-scale events.

The buildings have served as an abbey, a military hospital and a prison - until as recently as 1980 - before it was completely renovated to now offer a series of buildings and rooms, from the Agora covered courtyard and the former cloisters, to the chapel, Nic Klecker and other function rooms, to the 250-seat Salle Robert Krieps theatre and its Brasserie and open-air courtyard. 

The CCRN hosts music concerts (from classic to jazz and rock), ballets, artistic performances, workshops and art exhibitions, and is also a place of both creation and welcome - it is open to the general public, the young public, to associations and to designers - as well as acting as a meeting-point for collaborations and co-productions.

Not only is ING Luxembourg associated with this pole of influence that is both cultural and artistic, which allows us to combine the world of finance with that of art and culture, we are also actively involved in contributing to its development as a cultural centre which has played a major part in Luxembourg city's history, as well as its future.


Starting a business is one of those major life-defining moments we have, like buying a house/apartment or proposing to our loved one; all involve determination, commitment and hard work to make them succeed.
You may be an entrepreneur driven by innovation and want to try out a new idea, you may have a unique set of skills and business contacts and start out on your own, or you may take over a family business. Whatever the build-up and reason, you will have ideas of your own and you will be drawing up plans for different projects, or investing in intellectual capital, all to do with you becoming a future business manager.
Apart from knowing your business inside out, understanding your target market, having the connections and skills with which to secure your first contracts, and having all the paperwork completed and authorisations received, (and as if all of that weren’t enough!) you also need to have sound finances to make your business succeed. You need to ask yourself the right questions about setting up and managing a business; not only do you need to ensure you bring money in, you need to keep an eye on your costs and manage your cash flow. Having sound financial advice at this stage can be crucial – don’t be afraid to ask for help.
The main commercial company types in Luxembourg are an Sàrl (limited liability company) and an SA (public limited company). Get advice on which suits your business best as there are also implications on the capital required, i.e. €12,500 or €30,986.69 respectively. You will need to deposit the full capital amount into an (ING Luxembourg) blocked bank account in the name of the company, obtain a letter from the bank to confirm the capital is paid up and hand this to the notary so the company deeds can be finalised. Once this is done, and the notary paid, you will then have access to the capital again.
You should have a detailed financial plan done for at least the first year of operation; our advice is for you to engage a good accountant/fiduciary who can advise you on all aspects, including cash flow. The Luxembourg government also offers various financial aids to help new businesses. Once you meet the specific criteria you can take advantage of a start-up loan; first establishment savings premium; capital subsidy; bonus or interest; SNCI equipment credit… There is heaps of information online.
ING Luxembourg is the proud partner of many local projects. We’d be happy to discuss what financial aids are available and how to submit your applications to the various competent Ministries.


We are currently in the middle of Luxembourg’s annual Autofestival and it seems the whole country is out to buy a new car.

On top of comparing all the brands and all the options comes the task of comparing the different ways to finance your new car. Banks are not the only ones to have special offers during the Autofestival; some car dealers offer leasing constructions and/or car loans as well.

Be sure to check all the solutions and make sure you take the one that is most suitable for you, either from a bank or from a car dealer.

Some ground rules for financing a car

1. Make a list and check all boxes: With the rush of the Autofestival we’re all thinking about the great prices of new cars and how to finance the price but a car generates more costs than just the price! Make an exhaustive list to ensure you know what the total financial burden is: registration costs, insurance, winter tyres, fuel consumption…

2. To borrow or not to borrow, that is the question: There are many advantages to buying a car with a lease or a loan: you can pay for it over time, interest rates are quite low at the moment and you might benefit from some tax advantages at the end of the year. On the other hand, car dealers sometimes give you a discount if you pay in cash. So if you saved up enough in advance, it might be worth it to ask your dealer about this. The “return” you get from you new car might be higher than the return your savings yield right now!

3. Compare what is comparable: Before the acquisition, make sure you compare under the same conditions. In the case of a car loan that will be mainly duration, rate and amount. Pay attention to the price and what it includes. There will be significant difference in the “financial packages” that banks and dealers offer. Whilst the latter may tease you with extras for your new car, banks might offer financial advantages such as special rates if you decide to bring some of your savings as collateral. Last, but not least, check if you have the possibility to reimburse your credit early. If yes, check if you will have to pay penalties or not.

4. Simulate your loan to avoid bad surprises: Ask for a simulation of the credit with all costs included, so the total price of your credit includes interests and possible other costs. Make sure you can face your monthly instalments with ease in case one month you have unforeseen additional expenses!

5. Check with whom you are doing business: Whether you get your loan from a financial institution or a car dealer, make sure it’s someone or an institution you can trust.

6. Save some euros: Even if you have decided to acquire a new car, it is always interesting to have it at the best price. So, do not hesitate to use your talent of negotiator and take some time to make the right decision. You often get a lower price during the second visit! If you possess a better offer then do not hesitate to show it, it may help to have a special discount or some extra features. If you are flexible, be aware that some colours are cheaper than other, e.g. green, yellow and even red cars are often cheaper than black, white and silver cars.

To conclude, be sure of your personal financial situation before acquiring a new car. Do not forget to inspect some aspects and compare wisely … you could be a happy and proud owner of a new car!


Today I would like to share with you an article written by one of our portfolio managers: Richard Edwards...

Some of you may have come across the term SRI already and wondered what it meant. Others may be more familiar with the concept and have their own opinion about what it is.

SRI was originally associated with “Socially Responsible Investing” but the term has since evolved to cover the notion of sustainable development and so now we would more likely speak of “Sustainable and Responsible Investment”.

There is, however, no unified definition of what exactly is “SRI”. This can mainly be explained by the wide diversity of investors’ cultural backgrounds as well as their individual beliefs and motivations. When discussing SRI in a forum it would not be surprising to hear one, or more, of following terms being employed; “ethical”, “green”, “impact” and “clean”.

Despite what might appear to be a certain lack of clarity surrounding the definition of what is SRI, one thing is apparently becoming more certain. A recent study by Eurosif (the European Sustainable Investment Forum) has detailed the significant growth of responsible investment strategies since 2009. Somewhat surprisingly perhaps, this has been achieved in an era of ever-increasing austerity and a struggle to stimulate economic growth. In such an uncertain economic environment, maybe investors are turning more towards growth strategies that are green, sustainable and responsible.

At ING, we take a stand on ethical, social and environmental issues as well as promoting sustainable finance and aiming to mitigate the harm that may result from our activities. ING has implemented a clear Environmental and Social Risk (ESR) framework throughout its operations to avoid or minimize involvement in illegal, harmful or unethical practices. By continuously embedding environmental, social and ethical considerations into our core activities, we are striving to be an even better company tomorrow than we are today. ING believes that sustainability is more a journey than a destination – a continuous process in which changing circumstances are a given fact.

In 2009, ING launched “ING for Something Better”, an initiative that brings together our social and environmental initiatives into one format. The online platform can be found at:

It is also important that ING integrates environmental and social responsibility into its daily business practice and this is reflected in the fact that we offer sustainable products and services to our clients. At ING Luxembourg, one example of this approach is evident in the range of investment funds that is available to the client base. Since 2011 a category of funds has been created, under the title “Responsible, Lifestyle and Ecological”. The products selected for inclusion cover a wide range of investment strategies in order to try and satisfy the variety of criteria potential investors may use when looking for a “SRI” vehicle.

Tuesday, 07 January 2014 19:24

Barbara Daroca: Surviving the Sales

How to better start the year than by keeping control over your spending!

According to the latest IIS study on Savings, three out of four Luxembourg residents have a Financial New Year resolution for 2014 and this New Year’s resolution is most likely about “managing your money better by controlling the amount you spend.” ( )

At the same time, the Winter Sales have just started, so here are some tips to combine the two and get off to a good start in the new year.


- Shop within your budget so you know in advance how much money you can spend during the sales;

- Try a cash-only diet: Several studies suggest that people are willing to spend more when using cards than when using cash;

- Make sure the price during the sales really is the lowest price. Shop around (also online) to see if you can find a better deal;

- Think about what you need before you hit the shops and ask yourself if you would have bought the item at full price;

- Make sure you are really happy with your sale item before you pay. Is it the right colour, does it really fit, do you really need it?

I wish you all a financially sound New Year!


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