A few simple good habits to put in place can allow you to get richer over the months and years. Investing in savings can be a great way to grow your savings, if you know how to go about it .
Saving, an Essential Practice to Earn Money
According to a study conducted by Ifop, 83% of US people say they have at least one savings product in a banking or financial institution. For nearly one in two respondents, the objective is above all to build up precautionary savings, to deal with the unexpected . For one in four US people, it is also a question of financing a project, whatever it may be. Beyond allowing you to invest your savings, savings are above all a tool that allows you to grow them.
In general, it is advisable to limit the sums held in the current account, which is not remunerative . The money placed in the current account does not earn anything and it may even involve costs if you take into account possible bank charges and inflation . To see your savings grow, you have to take an interest in the different savings vehicles that exist.
To choose the right savings vehicle for your needs, you must certainly be interested in the potential gains, but not only: the investment objective (real estate project, car purchase, studies, preparation for retirement , etc.), the investment horizon (short, medium or long-term project) and the risk profile are also elements to be studied carefully. This is the key to making your money work well, that is, allowing your savings to grow while ensuring you have access to your cash when you need it most.
Ways to Make Your Money Work Better
The first thing to do to earn more thanks to your savings is to feed the savings well over time. The greater the starting sum , the greater the interest generated will be. You can thus opt for an automatic and regular transfer to the savings vehicle of your choice. No chance of forgetting exists in this method!
You can also choose to systematically invest the exceptional income you receive , whether premiums, bonuses or interest. Reinvesting the interest received, in particular in investments displaying performance, can allow you to grow your income and increase your savings effort tenfold while limiting the risks: in the event of a loss, it is not directly your capital which is impacted, but the fruits of your savings.
Also consider playing with dates . The interests of accounts on savings books generally operate on a fortnightly basis. This means that, in the event of withdrawal of part of the money placed on the 30th, 31st or 15th of the month, the interest produced during the past fortnight is definitively lost. It is therefore always better to favor withdrawals on the 1st or 16th of the month.
The withdrawal date is also of crucial importance in life insurance contracts : if the money invested can be recovered at any time, it is in your interest to wait 8 years after the opening of the contract to benefit from a more advantageous tax regime.
The Diversification of Your Investments, a Guarantee of Security and Profitability
In addition to the elements mentioned above, one of the best ways to make your money work better is undoubtedly diversification . This involves the management of several different placements and investments. This type of strategy, combining in particular secure investments and more efficient and therefore riskier investments, ensures you a better potential return on your savings.
In practice, this means that, for short-term projects, an investment with guaranteed capital such as the livret A for example, accessible at any time, is ideal. For a medium-term project, on the other hand, an investment such as life insurance is more appropriate.
To prepare for your retirement, investing in real estate or even in a retirement savings plan are good options. Finally, for savvy investors, stock market products can allow you to earn money more quickly, provided you take the risk of sometimes experiencing losses!
Investing in the financial markets involves a risk of capital loss .
The information transmitted in this article is purely informative and cannot be considered as advice issued by Fortunio (legal, tax, investment or other) .