You have surely noticed that the money deposited in your savings account earns you almost no annual interest. The average interest rates of all banks in Belgium are close to 1%, including the annual loyalty bonus. Quite meager…
When you know that inflation is around 2 to 3% on average each year in Belgium, you will understand that the money resting in your savings account actually costs you more than it earns you, as it depreciates faster than it earns you interest. A terrible observation!
Is there a solution for your money to earn you interest? Contrary to what banks tell you, there are many financial investment solutions. Follow the guide through this (too) brief article.
Money that sleeps is money that depreciates
Leave only the money you absolutely need in your checking account and savings account. In general, it is recommended to leave the equivalent of six months’ salary unless you know you will have to face a significant expense in the coming weeks or months.
You hate risk and are ready to lock your savings for 3 to 10 years
Then you might be tempted to lock your savings in a term account. If you agree to lock your savings for a period of 10 years, some banks will grant you an interest rate of nearly 4% gross.
The principle of the term account is that you cannot move your savings. However, it is possible to do so under certain conditions, but you will then lose the benefit of your investment.
Investing in stocks
You can decide to buy shares of companies listed on the stock exchange. Invest in the stock market only if your knowledge allows you to and if you are sure you can dedicate time each week to follow the financial news in general and the more specific financial news of your investments. There are very good financial magazines that can help you familiarize yourself with the financial markets. Take the time to read magazines every week for at least 6 months before making your first investments.
We can recommend the magazine L’investisseur from Test Achats and ‘Initié de la bourse
Do not consider these tips as gospel. Form your own opinion and take the time to think carefully about your investments.
Investments in stocks in recent years have yielded more than 10% capital gain per year. Finally, do not forget that some companies distribute dividends that can sometimes reach more than 7% gross, such as Belgacom, Telenet, Bpost, etc.
This yield is in addition to the evolution of the stock prices.
Investing in stocks always represents a significant risk and you must be sure to accept the fluctuations of your investments. There will be years of regression or even crash and positive years. On average over the last 50 years, the stock investor has achieved a positive net return on investment of 5%.
Is it enough to counterbalance your stress? It’s up to you to decide…
Investing in bonds
A bond is a loan issued by a company that pays you a fixed annual interest. Bond prices vary less than stock prices, but contrary to popular belief, prices also vary and bonds are not risk-free financial products.
The principle of a bond is to pay you an annual interest and to repay your capital at the maturity of the bond unless the company goes bankrupt.
Bonds have ratings on which interest rates will essentially depend. Ratings range from AAA to D.
Again, depending on the risks the investor is willing to take, interest rates are more or less high. Thus, a AAA bond will yield around 1.5% net, while a BB- bond may be accompanied by an annual interest of nearly 6 to 7% gross.
These financial products can be very interesting investment instruments. For more information on bond products, we recommend the website of the brokerage firm Goldwasser Exchange.
Three essential basic principles
Do you want to enter the financial markets? Very well, but never lose sight of these three essential fundamental principles:
- Invest only the money you do not need immediately;
- Have an investment horizon of at least 3 to 5 years;
- Diversify your investments: diversification is essential to avoid centralizing all risks in a few financial products.
Discretionary or personal management?
All major banks will provide you with a personal banker. They will offer you discretionary management, meaning that an investment specialist will manage your investments in accordance with your prerogatives.
We personally believe that if you are able to manage and know the products you buy, you will have more satisfaction in assuming your risks yourself. Of course, this last solution requires knowledge, time, and… stress endurance.
More information on www.cpe-credit.com
You have surely noticed that the money deposited in your savings account earns you almost no annual interest. The average interest rates of all banks in Belgium are close to 1%, including the annual loyalty bonus. Quite meager…
When you know that inflation is around 2 to 3% on average each year in Belgium, you will understand that the money resting in your savings account actually costs you more than it earns you, as it depreciates faster than it earns you interest. A terrible observation!
Is there a solution for your money to earn you interest? Contrary to what banks tell you, there are many financial investment solutions. Follow the guide through this (too) brief article.
Money that sleeps is money that depreciates
Leave only the money you absolutely need in your checking account and savings account. In general, it is recommended to leave the equivalent of six months’ salary unless you know you will have to face a significant expense in the coming weeks or months.
You hate risk and are ready to lock your savings for 3 to 10 years
Then you might be tempted to lock your savings in a term account. If you agree to lock your savings for a period of 10 years, some banks will grant you an interest rate of nearly 4% gross.
The principle of the term account is that you cannot move your savings. However, it is possible to do so under certain conditions, but you will then lose the benefit of your investment.
Investing in stocks
You can decide to buy shares of companies listed on the stock exchange. Invest in the stock market only if your knowledge allows you to and if you are sure you can dedicate time each week to follow the financial news in general and the more specific financial news of your investments. There are very good financial magazines that can help you familiarize yourself with the financial markets. Take the time to read magazines every week for at least 6 months before making your first investments.
We can recommend the magazine L’investisseur from Test Achats and ‘Initié de la bourse
Do not consider these tips as gospel. Form your own opinion and take the time to think carefully about your investments.
Investments in stocks in recent years have yielded more than 10% capital gain per year. Finally, do not forget that some companies distribute dividends that can sometimes reach more than 7% gross, such as Belgacom, Telenet, Bpost, etc.
This yield is in addition to the evolution of the stock prices.
Investing in stocks always represents a significant risk and you must be sure to accept the fluctuations of your investments. There will be years of regression or even crash and positive years. On average over the last 50 years, the stock investor has achieved a positive net return on investment of 5%.
Is it enough to counterbalance your stress? It’s up to you to decide…
Investing in bonds
A bond is a loan issued by a company that pays you a fixed annual interest. Bond prices vary less than stock prices, but contrary to popular belief, prices also vary and bonds are not risk-free financial products.
The principle of a bond is to pay you an annual interest and to repay your capital at the maturity of the bond unless the company goes bankrupt.
Bonds have ratings on which interest rates will essentially depend. Ratings range from AAA to D.
Again, depending on the risks the investor is willing to take, interest rates are more or less high. Thus, a AAA bond will yield around 1.5% net, while a BB- bond may be accompanied by an annual interest of nearly 6 to 7% gross.
These financial products can be very interesting investment instruments. For more information on bond products, we recommend the website of the brokerage firm Goldwasser Exchange.
Three essential basic principles
Do you want to enter the financial markets? Very well, but never lose sight of these three essential fundamental principles:
- Invest only the money you do not need immediately;
- Have an investment horizon of at least 3 to 5 years;
- Diversify your investments: diversification is essential to avoid centralizing all risks in a few financial products.
Discretionary or personal management?
All major banks will provide you with a personal banker. They will offer you discretionary management, meaning that an investment specialist will manage your investments in accordance with your prerogatives.
We personally believe that if you are able to manage and know the products you buy, you will have more satisfaction in assuming your risks yourself. Of course, this last solution requires knowledge, time, and… stress endurance.
More information on www.cpe-credit.com