This Month In Finance

You are not doomed to deposit accounts! Whether you have a small or a high income, we have identified several ways to invest in rewarding schemes this month. With the complexity and even the multiplicity of investment opportunities these days, making the right investment choices has become more and more difficult. Thus, all potential investors embark on a permanent search for the best investment, which will offer the top rate of return with the least risk.

Some investments are better than the others. It should be noted, however, that the success of any type of investment undoubtedly depends on each investor’s goals and circumstances. As a result, there is no investment that is more advantageous than the other. So what to invest in? Real estate or life insurance? What about fixed deposits, other insurances, or gold? And why not try your hands at the stock exchange? The selection of the month is here.

Pay off your housing loans already

In the context of declining returns of deposit accounts and life insurance, paying off debts can be an excellent investment. The best nowadays? It all depends on whether you are comfortable with your debts and the level of risk you are willing to take with your savings. Let’s take an example to comprehend it further. You took a mortgage to buy your primary or secondary residence and you still have 100,000 dollars to repay to the bank.

On the savings side, you have 100,000 dollars, which can come from the money of a small inheritance. You are in debt at 4.5% (including the borrower insurance). It’s a high rate today but it was the market rate when you took out your loan five years ago.

If your savings get you more than 4.5% after taxes, you better stay indebted. If it pays you less, you should prepay. Given the performance of the star investments (fixed deposits and life insurance), which is generally well below 2%, you have two choices, either you invest your savings in potential products, or you get out of debt.

For your life insurance, think about the proportion of savings that should be boosted

Once your debts are reimbursed, where should you invest your “extra” savings? Going back to a real estate transaction is tempting but risky. Investing in life insurance allows you to benefit from a number of advantages, for example,the creation of long-term capital, an investment opportunity in various fields or the transmission of your wealth to your family. This type of investment is perfectly suited to the projects and needs of each investor.

In the event of a one-point rise in interest rates, housing prices should fall by 7 to 8%, according to statistics. Life insurance would also be affected but to a lesser extent. Above all, the taxation of life insurance is currently much more favourable than that of real estate.

The next step is to choose what to invest in within your life insurance. You might want to take the help of insurance brokers. Last year, guaranteed-capital funds in all major currencies have returned less than the value of inflation, questioning their profitability… If your savings are a 100% invested in a secure fund and you can afford to freeze a portion for a minimum of five years, consider a gradual diversification into the stock market.

Think about crowdfunding

Today, there are many investment opportunities that bring new solutions to all those who want to diversify their wealth by taking less risk for better performance. The development of crowdfunding is an example of this.

Crowdfunding is new to the investment market but allows individuals with the ability to access investments that were previously difficult to access. Thanks to the development of platforms dedicated to this type of investment (Kickstarter, Indiegogo, RocketHub, etc.) it has become more accessible to all. So from now on, you have can easily invest in startups in which you see great potential or to grant loans to SMEs. Just make sure they have thorough business accounting.

Try your hand at the stock exchange

Similarly, renewable energies, investment wine, and forests, not to mention vineyard shares, are all investment solutions that can help you diversify your savings and enjoy a rate of return that can reach 5% per year. When it comes to investments, you have to be aware of the risks while seeking diversification. To invest in these sectors, you must ensure that you do not exceed more than 10% of your savings in order to avoid any risk.

Despite the fact that the stock market has been on a steady rise since 2012 with an expensive share price, buying stocks remains one of the most profitable investments in the long term. Most accounting services concur that the average annual return of stocks over the past 30 years is around 12 %.

The main advantage of this type of investment is that the market is very fluid, allowing you to make withdrawals at any time.

In real estate, sell the least profitable assets

Real estate is a great investment. Acquiring a primary or a secondary residence, if you can afford it, is often a good move. Look into subscribing to mortgage insurance, but remember that it can be risky in the current market scenario.

Decisions to invest in rental real estate are much more complex. The rental investment can be made on different kinds of assets like shops, car parks, apartments or studios, to name a few. In order to get the best returns, you better opt for lively areas like city centres.Buying brick and mortar on credit allows you to constitute a capital without capital, but you have to know how to bear the risks that come  with it. With the help of tax accountants, you can start to question the value of brick and mortar in your assets and consider selling the least profitable ones.

We hope this has given you some things to think about for this month in finance!

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