Women and finance in Switzerland: Interview with financial coach Melina Scheuber

Melina is a passionate Swiss finfluencer. Some of you may already know her from social media such as LinkedIn or Instagram. She regularly publishes articles about money via these channels. She also specializes in financial coaching for women. In an interview with Stefan, Melina talks about her first attempts at earning money as a child, how a few vacation days in Panama turned into four formative working years, what she attributes to the risk aversion often attributed to women and how the looming pension gap could be closed. Finally, she reveals her five most important financial tips for women and men.

The detailed interview with Melina on the topic of “Women and finance in Switzerland” is divided into the following three parts:

Part 1 “Person Melina Scheuber”

Melina, you are one of the few women who are not only interested in financial topics, but also actively talk about them. Who are you and how did your passion for money come about?

I am 34 years old and live with my husband in the Zurich region. I work as a portfolio manager for a small asset management company. On the other hand, I run my own financial coaching sessions for women. My passion for money was preceded by a longer development.

What key experiences have had a particular impact on you financially?

My parents’ divorce was certainly a decisive experience for me. I was only eight years old at the time. We lived in a village in central Switzerland. The traditional role model, where the mother looked after the children and the father earned the money, was the dominant and also the most socially accepted one.

How did you experience this time after the divorce?

It was a hard time, characterized by many material deprivations. My mother had to budget very frugally. But that wasn’t all: she was also forced to look for a job from one day to the next after years without gainful employment. She, my sister and I were only able to make ends meet to some extent with rigorous saving and an additional income.

And then you realized how financially dependent your mother had become?

Exactly. This painful lesson for my mother was also formative for me. It taught me never to make yourself financially dependent on a partner, the state or your employer.

What other events have strengthened your desire for financial independence?

When I was 18, we moved to Zurich to live with my mother’s then boyfriend and now husband. My stepfather often enjoyed discussing economics and finance at the family table. These conversations inspired me a lot and I became more and more interested in the subject of money.

How did you earn your first money?

I earned my first francs as a child. For example, I made bracelets and then sold them. Another of my business models was selling eggs. And it went like this: First, I asked around the neighborhood who needed fresh eggs. I then bought the eggs I ordered from my “chicken neighbor”, who gave me a sweet to take with me. However, my actual reward consisted of the coins that the egg buyers gave me for my service.

Later, as a teenager, I had a few summer jobs where I earned a few francs doing simple jobs in my father’s store, for example.

After these first attempts at earning money: How did your cash flows continue to develop?

The classic way, through an apprenticeship. I decided to do a banking apprenticeship at UBS. My mother gave me the choice of handing over part of my salary or financing everything myself, so I opted for the latter.

A good deal?

No, in financial terms it was a bad deal. But having self-determination over my finances was simply more important to me. Given the choice today, I would make exactly the same decision again.

After completing your banking apprenticeship, you studied business administration at the ZHAW. This was followed by various stays abroad. To what extent has your love of travel influenced your passion for money matters?

My insights into other cultures and economic systems in Asia, Central and South America have strongly influenced my mindset when it comes to money issues. The financial plight of many women was clearly brought home to me. Especially when children are involved and the fathers don’t want to take responsibility, women in these countries are threatened with a rapid descent into poverty.

What do you think are the causes of this misery?

The main problem I see is the lack of equality for women and the poor pay. As an employee, e.g. as an office assistant or cleaner, you earn very little in these countries. In contrast to Switzerland, a life of prosperity in Central and South America is often only possible through self-employment.

You spent several years in Panama. How did that come about?

I actually just wanted to visit a friend there for a few days. As I was waiting for him at his place of work, a local bank, a consultant came up to me and spontaneously offered me a job in customer service. I accepted – at a monthly salary of USD 1,400. I stayed in Panama as a bank employee for the next four years, although I changed my first employer after nine months.

No question, as a newly qualified business economist you would have earned several times more in Switzerland. But adjusted for purchasing power, it wasn’t a bad salary, was it?

As the prices in Panama are relatively high, I was struggling to make ends meet. But yes, by Panamanian standards it was a good wage. Looking back, my time in Panama was above all a valuable life lesson for me rather than a career booster.

You returned to Switzerland four years ago. A culture shock?

Yes, at least as far as certain financial issues are concerned. So it wasn’t easy for me to get my head around our insurance system at first. But I persevered and read up on the subject meticulously, almost like a nerd, until I understood it. I’m not the type of person who likes to rely on others.

Do you sometimes feel discriminated against as a woman in Switzerland?

Yes, I also experience a certain degree of unequal treatment in Switzerland. To name just one example: I was offered worse conditions for my part-time studies by a previous employer than two of my male colleagues received in the same year. It was only thanks to the intervention of my boss at the time that this injustice was corrected.

How do you personally manage your finances?

I take a holistic approach and follow the wealth pyramid. This consists of the following four successive stages:

1. Take out insurance with the aim of protecting yourself financially against events that threaten your existence
2. Secure a nest egg to be financially prepared for the unexpected
3. Pay into pension plan 3a to build up assets in old age and save taxes
4. Saving securities to build up assets

And how do you go about it specifically?

First, I drew up a budget with all my income and expenditure. I then determined the savings amounts based on this. I follow the “pay yourself first” principle. This means that the savings contributions are always invested first. If things get tight at the end of the month, I cut back on my consumption and don’t go to a restaurant, for example.

Once the conceptual part is done, it’s time for implementation. And here I am an absolute fan of efficiency.

In other words, you want to spend as little time as possible on financial matters “during operation”?

Exactly. Most of my financial transactions are completely automated.

Which providers did you choose for your financial investment?

I would like to say in advance that I am not tied to any particular provider. This means that the following is a snapshot that may look different tomorrow.

With regard to my pension plan 3a, I have set up two accounts with Viac with a 100% equity component. A fixed amount is transferred to each account automatically or by means of two standing orders each month.

I have also chosen the simplest possible way to save freely in securities. I pay a fixed monthly amount into a securities account with the robo-advisor Clevercircles by standing order.

In addition to investing in savings plan mode, I also have a securities account with Swissquote with a few equity ETFs and index funds. I invest in these manually and irregularly, depending on the market situation.

Why did you choose the Clevercircles robo-advisor?

The broad spectrum of asset classes was a decisive factor in my decision to invest with Clevercircles. In addition to shares, I also invested in real estate, precious metals and commodities. The second plus point is that Clevercircles offers currency hedging. Finally, the high degree of flexibility in rebalancing appealed to me.

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You opted for another robo-advisor, Findependent, for your godchild. Why this choice?

With Findependent, the low minimum investment value from CHF 500 and the super easy handling were decisive factors for me.

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Why are you with Swissquote and not with a low-cost foreign broker such as DEGIRO or Interactive Brokers?

I have been with Swissquote for many years. Back then, I transferred my custody account from a major bank to the much cheaper Swissquote because of the high fees. Choosing a Swiss broker is important to me for security reasons.

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Could you explain your security concerns about foreign brokers in more detail? Some of them offer more generous deposit protection than Swiss providers.

My time in South America reinforced this attitude. I realized how important the domicile of your financial investment is and how quickly it can be jeopardized by politically unstable conditions.

The aftermath of corona and the Russian war of aggression against Ukraine are leading to economic upheaval around the world, which is currently also reflected in major price losses on the stock market. How is the current global situation affecting your investment behavior?

I don’t change the monthly savings plans at all. I am opportunistic with a small part of my investment and increase my securities investment when prices drop. I have made a few such anti-cyclical investments in recent weeks.

How do you deal with financial losses?

Now very relaxed. Many of my positions are currently in the red due to the recent correction on the stock market. However, I am convinced that a positive return will result in the long term, not least thanks to the compound interest effect.

While preparing for this interview, I came across a statement you made about separating your finances from those of your husband. What were the reasons for this?

My husband and I pursue the same long-term goals in financial matters. I’m very happy about that, because very different views in this regard can put a strain on a relationship, even lead to it breaking down. However, we have differences when it comes to the actual implementation. That is why we have separated the investment of assets. However, we finance current household expenses via a joint account.

Pension provision in general and the so-called “gender pension gap” in particular are your favorite topics. Please explain what is meant by this?

Yes, I would love to. However, I need to expand a little. For me, retirement planning starts at birth and continues beyond my own death. The topic of pension provision is therefore not just limited to old-age provision in the form of our three-pillar model, but includes all financial planning. Depending on a person’s life situation, different pension issues come into focus.

The “gender pension gap” refers to the pension gap between women and men.

In a recent post on LinkedIn, you write that this pension gap in old age is around 37% to the disadvantage of women. In your opinion, what framework conditions need to be changed in order to close this gap in the medium term?

This pension gap has cultural and structural causes. Accordingly, this is where we should start to solve the problem.

Let’s look at the cultural causes first. What do you mean by that?

According to a 2020 NZZ survey, 38% of respondents said that women should stay at home after giving birth because working is harmful to the child. This cultural aspect requires a rethink in society, e.g. through education.

My observation is also that there is an urban-rural divide. While urban women often work 70% or more after maternity leave, women in rural areas tend to work fewer hours.

And where do you see a need for structural action?

I consider the lack of daycare facilities and their high prices to be the main structural problem. I could imagine the state providing sufficient childcare – similar to our primary schools.

But the economy should also rethink and be more willing to offer highly qualified work on a part-time basis.

The pension gap you are referring to concerns the pension fund, i.e. the 2nd pillar. In view of the constantly falling pension conversion rate, wouldn’t it be wiser to rely more on free securities savings instead of relying on the state pension scheme?

As I mentioned, my goal is financial independence. That means I want to be independent of state benefits when I retire. But many people can’t do that. These people are dependent on AHV and the pension fund. And that’s why the pension gap of around 37% that women face at retirement age is of great social relevance. After all, this gap means CHF 20,000 less pension per year.

Let’s leave retirement provision. Which asset classes do you invest in and why?

I hold cash to pay current bills and as a nest egg. With my risky investments, broad diversification across several asset classes is important to me. I am currently invested in shares, real estate, commodities, precious metals and very little crypto.

Which asset classes do you avoid and why?

In the current market environment, I am not investing in bonds. The returns on them are too low for me.

Part 2 “Women and finance”

In your work as a financial coach, you mainly advise women on money matters. Which women come to you and what are their motivations?

I usually coach women between the ages of 30 and 50. Their motivation is often the realization, after a long period of procrastination, that it is now high time to take a serious look at their own finances. Often the woman simply wants to know what her financial situation or that of her family looks like and ensure that she/the family is sufficiently secure.

Sometimes the trigger is also of a concrete nature, such as the start of self-employment, an upcoming job change with a new pension fund or a program on financial topics such as the SRF documentary series “Women and Money”.

What topics do your customers focus on?

My coaching sessions are generally based on a holistic approach. However, retirement provision is often the topic that my clients actively bring up at the beginning. Like me, they also want to manage their finances as simply and efficiently as possible.

What prior knowledge do they have?

Their prior knowledge of financial matters is rather limited. This is also reflected in the fact that cash is their largest asset position in most cases.

Speaking of high cash holdings: What do you think of the risk aversion often attributed to women when it comes to investing?

Yes, it is probably true that a pronounced risk aversion corresponds to the nature of many women. However, I also know from my coaching sessions that women are perfectly capable of understanding risk-specific issues when it comes to investing. They just need someone to explain this to them in an understandable way.

And how do you go about reducing your customers’ risk aversion?

As a first step, it is important to know your own risk profile. I also like to work with graphics to illustrate how the stock market and the different asset classes work. It helps to better understand the somewhat dry subject matter. I get feedback from my clients that the charts are very helpful for understanding.

Do you also come across women who are fundamentally opposed to the “equities” asset class?

Yes, that does happen. But when I graphically illustrate the difference between saving and investing, many of my clients change their initially critical attitude towards equities. They then understand better that equities pay better returns in the long term and that fluctuations, even if they can be significant in the short term, are simply part and parcel of this asset class. As the majority of my clients invest for the long term, they remain calm during short-term corrections.

What feedback do you get from your clients? Are there also complaints when they make losses after stock market dives?

No, fortunately not so far. On the contrary: the women show great gratitude and positively emphasize how relieved they are to have finally sorted out their own finances with my support. This is very fulfilling for me personally.

In addition to women-only events, you also regularly take part in mixed-gender financial events. What differences do you notice in terms of content and, above all, atmosphere?

There is always a great atmosphere at women’s events. Just recently, for example, I held a workshop with women. There were lots of questions, which led to great interactions. In general, I find the interaction between women to be very uncomplicated. They give each other tips, exchange ideas and network very easily.

Mixed financial events usually consist of over 80% men. Serious business topics usually dominate.

Most financial blogs tend to appeal to men. Schweizerfinanzblog.ch is no exception. What are we doing wrong?

(Laughs.) This question would probably be better answered by people outside our finfluencer bubble.

Let me start by saying that I find your articles very easy to understand. However, I think that some women would like a little more story “around it”, i.e. embedding the financial topic in a real-life, everyday context. In addition, your and other financial blogs focus strongly on the topic of “investing”. In my experience, however, many women prefer a holistic “pension” approach that goes beyond investing.

Part 3 “Personal finance tips”

What are your most important financial tips that you would like to share with our community at the end of this interview?

I could list many of them. But the most important tips for me are the following five:

Tip no. 1: Take personal responsibility

The most important thing for me is to realize that, whether we like it or not, finances occupy our entire lives. We cannot delegate the management of our finances to the state, our employer or our partner. Instead, we have to take our finances into our own hands. And especially for women: We cannot wait until all the cultural and structural conditions have improved. Because this will take too long.

Tip no. 2: Work on your own mindset

In order to develop and maintain the necessary skills in money matters, everyone should deal with their own finances on a regular basis. Ideally embedded in the daily routine. I myself listen to several podcasts a week on the topics of business and finance. Constant stimulation promotes financial understanding. I also advise everyone to talk about money. This also promotes understanding. I am convinced that everyone can develop an interest in money matters. You just have to deal with it. We plan so much, weekends, trips, vacations, etc. But many people don’t manage their finances, which will sooner or later take painful revenge.

Tip no. 3: Take a close look at the pension fund when changing jobs

It is an absolute must for me to analyze the potential employer’s pension fund solution before accepting a job. This is the only way I can get an overall picture and a basis for deciding whether the job is suitable for me or not. In this respect, everyone can influence their pension fund. It seems to me that job seekers are too focused on salary when it comes to the monetary component. We should also consider the pension fund as a salary component and attach greater importance to it. After all, a good pension fund solution is a huge lever for a later retirement pension. And that’s not all: it’s also about risk coverage in the event of death or disability due to accident or illness. A current example of this is absence from work due to long-term Covid.

Tip no. 4: Be careful when reducing your workload

Any reduction in the workload should be carefully considered in terms of its long-term financial impact. The aim is to be well prepared for worst-case scenarios such as divorce (if children are involved) or the death of a partner. It is important to avoid becoming financially dependent on third parties. My advice: keep at least one foot in the workforce.

Tip no. 5: Invest and benefit from compound interest

Investing money really doesn’t have to be complicated. The important thing is to start promptly so that you can benefit from the compound interest effect for as long as possible. For those who struggle with manual trades on the stock market, there are now robo-advisors. Simply set up a savings plan using a standing order and invest automatically month after month. It couldn’t be easier!

Many thanks Melina for the interesting insights.

(The conversation took place on July 6, 2022 at the Roots restaurant in Zurich. Melina and Stefan met for the first time a few weeks earlier at the SIX BörsenTalk Flagship Event, where they both took part in the Finfluencers panel discussion. We reported on this event here).

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