Why Low Interest Rates Fuel the Generational Conflict
For generations, saving was seen as the golden rule of financial security. In the 1980s, Swiss savings accounts offered returns of up to 6%—a reward for prudence and patience. Back then, the choice was clear: why take risks when the bank paid you handsomely for simply keeping your money safe?
But times have changed. Interest rates have been on a steady downward slide, even dipping into negative territory. The old rules no longer apply. In today’s environment, it’s not enough to save—you need to rethink, adapt, and act. After all, those who spot opportunities in difficult times are the ones who come out ahead. So, how should we adjust our behavior and teach children to navigate the era of low interest rates?
While property owners and shareholders have benefited from cheap borrowing costs and rising asset prices, the younger generation is increasingly left behind. For young savers today, the dream of owning real estate drifts further out of reach, and traditional savings accounts or conservative investments offer little incentive.
This shift creates not only financial challenges but also fuels a generational divide: the older generation could still benefit from the power of safe saving, while today’s youth must navigate a world where only those willing to invest in riskier assets can realistically build wealth.
If you want to give your children something truly valuable, don’t just hand them money—teach them how to invest in stocks early on.
How to Teach Kids About Money in the Age of Low Interest Rates
‘Invest in Yourself First’
This is one of the hardest but most important tasks for parents who want their children to grow up financially secure. In today’s digital world, corporations enter children’s bedrooms through smartphones and social media. “Child protection” and “marketing” are contradictions—after all, companies have little interest in reducing their own consumer base.
Similar to the slogan “America First”, children should learn: “Invest in yourself first—before making others rich.” Saving is not obsolete—it is mental training for young people. It teaches them not to overspend and to set priorities.
But a savings account should serve only as a liquidity reserve—money that can be accessed quickly in case of emergency. All other long-term savings should be invested.
“Stay invested at all times” is the best protection against both inflation and low interest rates. Over time, diversified investments in global stock markets have consistently outperformed savings accounts and helped protect purchasing power.
Proven Methods to Teach Children About Investing
Reward saving discipline: Agree on a savings goal and top it up by 50% once the child reaches it. This keeps motivation high and reinforces the habit of saving.
Start small with real investments: Use the first CHF 1,000 your child saves and invest it together. ETFs are ideal for beginners, and modern apps allow children to regularly track their portfolio. This teaches them to handle market fluctuations, and once they experience positive long-term returns, they are less likely to panic-sell later when investing larger amounts.
Track regularly: Monitoring investments isn’t just for adults. Children should get used to reviewing their savings and investments consistently. People naturally prefer their comfort zone—but comfort comes from familiarity. Regular tracking helps children gain that familiarity and confidence with investing.
The Takeaway
The world of money has changed dramatically. What worked for parents and grandparents—simply saving in a bank account—no longer works for today’s youth. If you want your children to thrive financially, teach them the principles of disciplined saving, and then guide them into the world of investing early.
Because in a low-interest world, knowledge and investing skills are the true inheritance.