The Minister of State and Finance marked this Friday, the 31st, Savings Day by giving a class to students at a secondary school in Lisbon, explaining the best ways to invest money, avoiding errors and fraud.
“Be careful with what you find on the internet, especially if you see my face in some ads, it’s a lie. I’ve already asked the Judiciary Police and the SIS (Security Information Service) to try to stop this but it’s almost impossible”, he warned, referring to internet fraud.
Joaquim Miranda Sarmento spoke today in front of 150 11th year students at Escola Secundária José Gomes Ferreira, in Lisbon.
The Finance Minister, 47 years old, attended the same school during secondary education and, addressing the students, stated that all investments pay taxes.
“There are only two certain things in life: death and paying taxes. Therefore, all the investments you make pay taxes,” he said.
At the beginning of the class, the Minister of Finance explained the basic concepts about investments in relation to inflation values, the time value of money, the opportunity cost and the relationship between risk and return.
He also explained the functioning of the banking system to say that the “best thing” that young people can do to save is to put part of the money saved in term deposits and the rest in funds, shares and bonds.
“Think about saving in a medium and long term sense, think about what you would like to do in two years, or from the age of 18 onwards. You can drive, travel more and think about the money you need. Think about the money you can save every month and, above all, in the moments when you receive more: on birthdays and Christmas”, said the minister.
On the other hand, he warned that it is necessary to make sacrifices because you cannot buy everything and advised that it is easier to “negotiate” with your parents when you have saved some money.
Likewise, he advised students to think about the “diversified” banking products they have available.
“The best option you have is to open a bank account and put some in funds that can have a higher return (deposits and funds). Be careful with the risk. Take the risk, but don’t take too much. Be careful with fraud on the internet and study hard.”
At the end of the class, a student asked the minister if it was “worth it” to invest in cryptocurrencies, but was advised against it by the Minister of Finance.
“If my Secretary of State for the Budget were here, he would enthusiastically say yes (…) because he is a staunch investor in cryptocurrencies. My suggestion is that no more than 1% or 2% of the money you have”, said the Minister of Finance, addressing the 11th year student.
For Joaquim Miranda Sarmento, those who invested in cryptocurrencies in recent years made money, but considered that “it is a bubble”, because assets tend to appreciate in value without an underlying economic reason.
At the same time, the Minister of Finance stressed that studying is very important for the future of young people, at any school, and criticized the schools’ classification lists.
“There is a lot of talk about school ‘rankings’. They are completely irrelevant because the journey is made by each one of you. I studied at this school and I am a professor at the college and I am Minister of State and Finance”, he stated.
The minister said that young people today have access to all the information that exists and that, currently, students “have a greater field of opportunities” than in the past, such as studying abroad.
Today, to mark Savings Day, initiatives on financial literacy took place in schools across the country with the participation of members of the Government, academics and directors of institutions.
In addition to the Minister of Finance, the Governor of the Bank of Portugal was also present at a secondary school in Coimbra.