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finland

Want to Live in Finland? Tips From a New Arrival

I moved to Finland in January from Vushtrri, Kosovo. As an international student, I also work in Helsinki and have an internship.

Why do I want to live in Finland? Everyone’s goal is to live the highest quality and most stable life possible. Finland surely offer that to you.

[mapsmarker map=”2″]

What would I tell someone considering a move to Finland?

Finland needs international workers. The Director General of the country’s migration department has said: “The basic premise is that, in addition to the domestic workforce, Finland needs employees also from abroad. There is intense competition in the world for international talents.”

Open Spaces

You’ll probably need to be prepared for some cultural and lifestyle changes. For example, looking at Finland for the first time from an airplane, I noticed the lack of colors. At that moment, Finland seemed only black and white – darkness and light. Of course it was wintertime. Other seasons in Finland are very colorful, though that monotone first impression has stuck with me.

Also, outside of a few urban areas, Finland is very low-density in terms of population. You really see that as you descend. There’s huge expanses of open land. While Finland’s population is only about 5.5 million, it’s land mass is 303,815 km2 – that’s a lot of empty space. There’s a huge distances between buildings in some areas, and the land is filled with forests.

View of Finland from the air during winter.
Wintertime view of Finland from an airplane.

Simple architecture

Get on the ground, exit the airport, and notice the architecture. There’s a fantastic simplicity to the architecture in Finland. Finns are all about efficiency: “If it works perfectly, you don’t have to complicate it. Keep its destiny clear and simple!” That seems to be the unspoken motto.

No small talk 

Did I mention unspoken? The distances between houses seems to help people keep at a distance, in order not to disturb others and to work in silence by themselves. At the least, Finns really do appreciate personal space.

One point is unambiguous. Most Finns are not accustomed to small talk. That doesn’t mean that there’s a fear of small talk. It’s just not a common experience for most people. If you come from a more collectivist society, this aspect of Finland may really shock you. If you want company without priorities or purpose, Finland may not be the right place for you.

Helsinki Sunset Pink
Sunset over Helsinki.

Independent culture 

The stoic independence of Finns created a culture of self-service. Many services – such as buying public transport tickets or paying taxes – are done by individuals themselves, rather than a service provider. Having up to date tech tools is important in order to access the apps and other systems you’ll need. You’ll be helping yourself, and also the overall economy, run more smoothly and transparently.

So, how long will it take to get over the culture shock after moving to Finland? I’d say just two or three months and you’ll appreciate every detail of this wonderful country, which has the most beautiful scenery in the world. You’ll find your peaceful moment here, of a type you won’t ever find anywhere else.

Krenare Bunjaku is a marketing intern at sulonorth. Connect with her on LinkedIn or Facebook.

NOTE: The above post was amended on 31 OCT to clarify that Krenare arrived in Helsinki as an international student.

Categories
finland Investing

Europe is the pioneer in global P2P-lending & Finland is dominating the Nordic markets

Peer-to-peer (P2P) lending or crowdlending/-funding is a new way of borrowing and lending money without any middleman. P2P-platforms operating online connect those who need the money with those who are ready to lend money. No bank is needed in this process. 

Borrowers can be either individuals or companies, and there can be tens or even hundreds of individual lenders contributing to one single loan. Crowdfunding is easier to get than traditional bank loans, which makes it an easy option for startups. P2P-lending is also more flexible, less time-consuming and often a cheaper alternative compared to traditional business loans that banks are offering. 

P2P-lending has become very popular in recent years

The first online P2P-lending platform, the UK’s Zopa, was launched in 2004. However, P2P-lending did not become mainstream investment option until few years ago. As we can see from the graph below, crowdlending has grown steadily during the last 5 years in Finland. At a global scale, P2P-lending did not achieve (early) mainstream adoption until in the 2010s. 

P2P-lending in Europe 

Europe is one of the pioneers in the P2P-sector. The first P2P-platform was launched in UK, which has been the market leader in Europe ever since. In 2017, the UK represented 68% of the overall market volume. In Continental Europe, France and Germany were the two biggest players in P2P lending space. As a small country with a population of only 5.5 million, Finland was doing relatively well compared to the bigger European countries.  

Baltic countries, especially Latvia are growing fast in the European P2P-lending scene: their favourable regulation  and entrepreneurial mindset has produced some decent results.  However, most of the investments in Baltic P2P-platforms come from international investors and loans

In general, there are many platforms in European P2P-markets to choose from. Mintos, a Latvian P2P-platform is the largest and most popular P2P-lending platform in Europe and it’s growing fast. 

P2P-lending in Finland growing

In 2019, there are 4 different P2P-platforms that are operating from Finland: Bondora, Fixura, Fellow Finance and Fundedbyme. Fellow finance provides consumer loans also in Germany, Sweden, Denmark and Poland being the leading P2P-platform in Nordic countries

According to P2PMarketData, Finland was the leading Nordic country in P2P-crowdfunding in 2017. Sweden was pretty close, but Denmark and Norway were far away. When it comes to geographical regions, the Nordics beat Benelux countries, Italy, Baltic countries and other big regions in volume. Rankings have probably changed after 2017, but this gives an idea about the P2P-lending scene in Europe. 

In Finland, P2P-lending has become a popular way to borrow and lend money. According to Finlands Bank, in total of 150,1 million Euros was borrowed in P2P consumer loans in 2018. The number was 40 % higher than year before that (2017), so the growth of P2P consumer loans has been quite strong. 

However, borrowing money via P2P consumer loans is not that popular among Finnish families; P2P consumer loans cover only 1% of the total household consumer credit.

Joonas Saloranta covers Northern Europe investing, macroeconomics and more at the Financial Nordic blog.

Categories
finland Sustainability

Finland makes sustainability easier

A leading Northern European airline emails customers, saying it is moving ‘towards a better climate future’.

Reusable grocery bags are spotted all over hipster neighbourhoods of Helsinki, Stockholm, Oslo, Copenhagen, and Tallinn.

Local Facebook flea market groups are buzzing: buying second hand is a popular move.

In the small neighbourhood of Jätkäsaari in Helsinki, there are two second-hand shops. People can drop off their used clothing and items and have them sold for a small service fee. Both shops have opened up only this year (Jätkäsaari is seeing a lot of development). It looks like business is doing well.

Let’s be honest, doing your part to combat climate change is trendy in Nordic countries. It’s also considered essential for the public relations efforts of companies.

Protecting the climate and being sustainable isn’t a bad move to make – for all kinds of reasons. By 2030, the sustainability industry will create more than USD12 trillion in business opportunities, according to one estimate.

Of course, the interest in preventing climate change and sustainability is real. Those melting glaciers are undeniable from where we sit. Northern Europe also produced Swedish Greta Thunberg, the famed teenage climate activist who is even better than Donald Trump at Twitter.

Given the market demand wide-spread interest, sulonorth is also jumping on the sustainability wagon.

On Tuesday, we began a regular series of posts related to Nordic sustainability efforts. We kicked the series off with an exciting issue close to the heart of every Northern Europe resident: waste management and recycling.

Jokes aside, being able to contribute to the circular economy and focus on living in a more sustainable manner is one of the joys of being a Helsinki resident. The city makes social responsibility more achievable. Sustainability is usually difficult. All too often guilt and a sense of helplessness replaces action. Yet, for many, the only choice Helsinki offers is to live in a more sustainable manner.

The priority Finland gives to sustainability is driven by both a moral responsibility and self-interest. For example, it would be very bad for the Finnish forestry industry if temperatures rise too much. The forestry industry is critical for Finland’s economy.

Watch for more on the circular economy and sustainability in the coming weeks.

Yellow rental bikes make sustainability in Helsinki, Finland easier
Save Finland’s trees, rent a bike!
Categories
Denmark estonia finland Norway Sustainability Sweden

Why Sweden is the waste king of Nordic Europe

Want to live in Finland or another Nordic country? Get ready to spend a lot of time sorting waste and recycling.

In Finland, most apartments and houses contain multiple bins for waste sorting by type. You carry it outside regardless of the weather and dispose of it in one of several different receptacles: biological, mixed, cardboard, plastic, paper, cans, glasses, and hazardous (batteries, small electronics).

Compare this to Britain, where residents usually put out three bins: food waste, mixed recycling, and garden waste. In countries such as the UAE and Turkey, people generally do not recycle at all.

I chose these countries as examples because I can speak from first-hand experience after living for multiple years in each. The point is that Northern Europe is a leader when it comes to waste treatment and recycling.

How do they do it in Sweden and Finland?

In Sweden, nearly half of general waste is sent for energy recovery. The country is so good at burning waste, which produces steam for electricity producing turbines, that it imports waste from other nations, including Norway and Finland. The energy is used to heat Swedes’ homes and even to power buses.

Some numbers from Swedish Waste Management and Recycling Association Avfall Sverige:

  • In 2018, each Swedish citizen produced 466kg of household waste.
  • In 2017, each Swede produced 473kg (so waste per person in Sweden is being reduced – at least between 2017 and 2018!).
  • In 2018, 15.5% of household waste was treated biologically.
  • Nearly 50% of household waste went to energy recovery in 2018.  
  • Only 0.68% of the waste went to landfills.

Finns, on the other hand, produced 510kg of waste per person in 2017. In Finland, most of the municipal solid waste is treated for energy recovery. The rest gets recycled and only a tiny amount is sent to landfills, as per data from Statistics Finland.

The most dramatic change with Finnish municipal waste management happened in 2016 when the dumping of municipal waste in landfills decreased substantially compared to previous years, coming in at 3%. This change was due to a regulation that banned dumping organic waste into landfills. 

Helsinki neighborhood waste center door
Fall in line and recycle as you are told!

Why are Danes the largest waste producers in EEA?

NOTE: How countries define municipal waste varies. Sometimes the term covers a wide amount of commercial waste. This is the situation in Denmark, which partly explains the large amount of generated municipal waste per capita. Therefore, the figures below are not completely comparable between countries.

Danes produced the most municipal waste in the European Economic Area at a staggering 781kg per capita in 2017. In Norway, the figure was close at 748kg. In Iceland, the third biggest waste producer, it was 656kg. 

This puts Scandinavian nations on the top of the list for municipal waste generators. This can partly be explained by the wealth of these nations. Usually, rich nations produce more municipal waste than less wealthy nations within the EEC.

However, Sweden and Finland are producing much less waste and are also wealthy countries.

Urbanisation is considered another important contributor to Denmark’s high level of waste. However, perhaps the main reason for the high figure is the way that municipal waste is determined, according to Denmark’s Environmental Implementation Review 2019. The review also states that Denmark is among the countries with the lowest amount of landfill waste in the EU at 1%.

Why does Sweden import waste?

Currently, Sweden imports more than 1.3 million tonnes of waste from other European countries. Nearly half of this waste comes from Norway, but also Finland exports waste to its western neighbour. Why is that?

Overcapacity

Finland has a problem when it comes to energy recovery at home. The country’s waste burning facilities are overcapacity. That is why a lot of Finland’s waste is sent to Sweden and Estonia. All in all, Finland exported 100,000 tons of mixed waste in 2018, according to Yle.

A ban on dumping organic waste in landfills also increased the amount of municipal waste being burned. If Finland’s waste incinerators only took in household waste they would have enough capacity. However, they also accept industrial waste.

Finland Waste by Sector 2017
Finland Waste by Sector 2017

Finland is building a new waste incinerator facility in Salo, but it won’t be ready until 2021. Finland’s largest waste management facility (in Vantaa) is also being expanded. However, for the time being, it seems Finland will keep exporting waste to its neighbours to the south and west.

Trash means cash

In Norway, the problem is not related to capacity but the free-market economy. Norway has enough facilities to burn its waste at home. The capacity was built up after landfill dumping was banned in 2009. However, Swedish waste burners compete in the Norwegian market. They offer a cheaper price due to lower costs in Sweden. 

It seems that Sweden is destined to sit on the Nordic waste throne for the foreseeable future.

Categories
finland Investing

If you live in Finland, this new investment account can make you richer

According to the famous scientist, Albert Einstein: “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it”. It looks like the Finnish Parliament has finally understood this, which is good.

In March 2019, Finland’s Parliament made the final decision to approve the new laws that enable Finnish individuals to create their own individual stock savings account up to 50,000 Euros. Finns can open their account on 1.1.2020 and afterwards. 

What are the benefits of the individual stock savings account? 

There are some really favourable benefits for individual investors:

  • Individuals can transfer up to 50K for their individual stock savings account, but there’s no limit of how much the investments can grow inside the account. The earlier in life an individual (or a parent) starts using this account, the more benefits it usually provides.  It really matters how much taxes have to be paid for capital gains and dividends:
  • Let’s take an example: if some parents are wealthy enough to have the money to invest 50,000 Euros when their child is 10 years old (one-time investment in this example), that 50,000 Euros would grow to be 503,132 Euros after 30 years when he/she would be 40 years old. The average stock market return has been somewhere between 710 % depending on how it is measured. I used an 8% annual return in this example. That 503,132 Euros would be worth of around 350,000 after taxes and considering the yearly inflation (2% in this example), that 350,000 would actually be worth of 193,000 Euros on the day when it was first invested (when the kid was 10 years old). Still not bad for an initial 50K investment. 

Who is this not for ? 

The individual stock savings account is good for those who like buying single stocks and keeping them long-term. The account is not suitable for individuals who already have lots of stocks or big sums to invest, because the transfer limit is 50,000 Euros and previously purchased stocks cannot be transferred to the account. Also, it is not a good idea to use the account to buy stocks from other countries, because it’s not tax-efficient.

Most beginner investors start their investment journey by investing in ETFs (Exchange-Traded Funds), because these are good for diversification and usually cost-friendly. However, the new stock savings account is not applicable for ETFs, because it only allows individuals to buy single stocks.

Compared to other Nordic countries, Finns have been very careful with their money in the past when it comes to investing

We Finns are definitely too careful with our money. According to a Danske Bank’s survey, almost 80% of Finns think that investing in stocks is very risky. Only 50 % of Swedes think that way. From the graph below, we can see there is a huge difference when it comes to the ownership of stocks and mutual funds between Swedes and Finns. 

In 2018, the average Swede had 133, 402 Euros invested while the average Finn only had 53,712 Euros invested. Finns have traditionally mainly bought their home and kept the rest of their money in their bank account, avoiding the stock market.

I hope that Finns will be encouraged to invest more and become wealthier with this individual stock savings account. 

Joonas Saloranta covers Northern Europe investing, macroeconomics and more at the Financial Nordic blog.

Categories
finland

Big cities in Finland are growing even as the countryside empties – at least we pay our mortgages (unlike the Swedes)

Finland’s capital city Helsinki attracts more than just tourists. Don’t get me wrong: tourists are great and without them, we would not have anyone to brag to about Finnish sauna or our achievements in ice hockey. Jokes aside. The metropolitan area of Helsinki, which includes Espoo and Vantaa, has around 1.5 million inhabitants. In Helsinki city alone, there are 650,000 people, and the number is growing. Pressure on Finland’s real estate market is mounting.

Helsinki Finland Apartments
Jätkäsaari, Helsinki, Finland.

Real estate market in Finland

Finland’s real estate market is a double-edged sword. Big cities (especially those with universities) are growing as the countryside empties. However, house prices grew in only three major city regions last year: Helsinki, Turku and Tampere. These are all cities located in Finland’s south. House prices in Helsinki are expected to rise by 2% in 2019 and by 1.5% in 2020. At the same time, half of the homes in Finland depreciated in value.

Housing real estate Helsinki Finland
Jätkäsaari, Helsinki, Finland.

Urbanization is a global trend and Finland is no exception. As the country’s fertility rate falls to an all-time low, Finns don’t need that big house with a big yard by the lake anymore.

Instead, nowadays many Finns, especially younger people, appreciate a good location close to the city centre. Owning a car is seen as an unnecessary option for many. Why pay for a car when you can use great public transport or pure muscle energy to commute while at the same time you are saving the planet? That would be a great question to ask of Americans!

Not everyone in Finland is happy with this kind of development. The Centre Party of Finland (in Finnish: Keskusta) supports agrarianism. They would like to “keep the whole Finland alive” by supporting rural areas so that people would have work options and services outside of big cities. However, Keskusta suffered a great loss in Finland’s last parliamentary elections (2019). Urbanization is not the only reason for the loss, but it definitely played a role.

Real estate market in other Nordic Countries

Finland is a Nordic country, and we like to compare ourselves to other Nordic countries, especially Sweden, our brother and great rival. Nordic countries are similar in many ways (Not discussing the Finnish language here…), but there are also some differences.

In Sweden, housing prices have gone through the roof, especially in the capital city, Stockholm. There were definitely signs of a housing bubble: house prices went up by 44% in the past 6 years. However, compared to 2018 Q1, house prices in Sweden went down by 2.09% in 2019 Q1.

From the two-year-old graph above we can see that house prices have stayed stagnant in Finland during the last 5 years. In Denmark, Norway and especially Sweden, house prices have risen a lot. One reason why Finland has not been able to keep up with its Nordic neighbours is that the economic situation in Finland was quite bad after the 2008 global financial crisis and the following European debt crisis. After 2011, Finland recovered very slowly from these crises compared to rest of the world. Finally after 2015, the economy of Finland started to recover.

Punavuori, Helsinki, Finland.

Nordic countries have different mortgage loan policies

There is one big reason why the house prices surged so much in Sweden before 2019. Sweden has a totally different mortgage system compared to Finland. In Finland, the longest mortgage term is now 45 years. However, mortgages longer than 30-years are rare in Finland. In Sweden, the longest mortgage term is 125 years! That is a huge difference and is the biggest reason why house prices are out of control especially in Sweden’s big cities.

Stockholm Sweden Real Estate New Housing
‎⁨Hammarbyhamnen⁩, ⁨Stockholm⁩, ⁨Sweden⁩.

Swedes do not necessarily pay the loan payments of their mortgages, because their mortgage policies and laws allow that. Instead, they might only pay the loan’s interest. This allows them to spend and invest more money, but it can (and probably will) lead to a housing bubble burst some day. Norway and Denmark are in the middle: people in these countries don’t pay their mortgages as fast as in Finland, but definitely faster than in Sweden.

Joonas Saloranta covers Northern Europe investing, macroeconomics and more at the Financial Nordic blog.