Ahh the investments! You want to invest your money to make it grow but the fear of losing it slows you down a bit .
Between risk-free investment and quick returns, we all dream of having the butter and the money for the butter, and that’s quite normal.
In the vast world of finance, it is important to distinguish between different things: profitability and security .
Especially since letting your money sleep on a savings account is not necessarily secure because it loses value every year, but we’ll talk about that later. The notion of security is to be questioned according to one’s means . We’re not going to keep you hanging around for too long, we’ll explain everything to you right after.
What are the best risk-free investments to make in 2022 ? Is it possible to hit big without too much risk of loss? How do you say goodbye to the fear of investing?
Let’s go for a ride in the wonderful world of investment.
A risk-free investment, what is it?
Before you even see the best risk-free investments you can make, you have to start defining what they are.
Already, a risk-free investment is an investment that seeks to minimize the risk of losing the money you save . Isn’t that too nice?
But beware, that does not mean at all that there is zero risk of loss . It’s impossible to guarantee that, just as it’s impossible to certify that your last favorite sweater will still be in your heart in 3 years.
All we can assure you is that a risk-free investment will yield little. And it’s normal, the more you play with fire, the more risk you have of burning your fingers. But the more likely we are to make a beautiful crackling fire that warms us.
In short, you will have understood it, difficult to have the butter, the money for the butter and the smile of the creamer.
Why invest your money without risk?
It’s hard to invest in real estate or the stock market if you don’t have a little money aside for the unexpected in life.
Spilling a cocktail on your computer, it happens ( true story) . And that’s where we are very happy to have a little savings.
As you will have understood, risk-free investments are primarily used for two things:
- Build up precautionary savings 💰 to live your best life without fear of uncertain bills that may fall (EDF which makes a regularization. We all go through this.)
- To carry out short and medium term projects 💭 (up to 5 years) such as buying a car, planning a big trip around the world and dreaming big, for example.
The goal is to set aside money that is available when you really need it. This type of investment is not intended to grow his crazy interests.
There is no risk-free investment that pays off big
Promises that sell (too much) dreams are a sign of scams .
It’s often too good and if it were true, we would all be in the Bahamas with our toes fanned out sipping a cocktail (while avoiding spilling it on our computer).
If you are sold a risk-free investment that yields more than 1.5% , you have to ask yourself questions.
That’s why you have to be wary of ads that promise to explain to you the “risk-free financial investments” that will make you rich.
There are 3 types of risk-free investments
There is no good or bad investment without risk. Simply, there are different types. It’s up to you to see which ones suit you best and are the best in your eyes. Beauty is subjective, there it is a bit the same.
Just know that risk-free banking investments are the same in all banks because it is the state that sets the rules.
Bankbooks are the first things you think of when you start putting some money aside.
A quick tour of the booklets to see the differences and specificities.
He is the cousin who arrives at each family meal. It is part of the decor and we hear about it all the time. We know we have to get closer to him because he’s famous , but we don’t know exactly why.
Accessible to everyone , the Livret A account allows you to withdraw your money at any time and gives you the benefit of advantageous taxation . Currently, in 2022, its rate is 1% . It’s not crazy but it’s the best investment if you want to save in the short term.
The young booklet
The youth booklet bears its name well since it is accessible only to 12-25 year olds . Its ceiling is €1,600 and its rate of return depends on the banks.
It is he who puts his foot in the stirrup when you start saving a little money (thank you summer jobs and birthdays with a little note).
Also known as the Livret de Développement Durable et Solidaire , the LDDS is a bit like the cousin of the Livret A because it also offers, since 2022, a fixed rate of 1% . Except that unlike him, his ceiling is €12,000 .
Ah, the famous PEL that we say breaks every time we enter a bookstore / at Sephora / that we pay for our rounds. A choice.
Also called Plan Epargne Logement, it is a blocked savings fund and you cannot make an immediate withdrawal. Basically, this money is not available immediately and it is subject to social security contributions from the first year of opening.
You have to put a minimum of €540 on it per year and make monthly, quarterly or semi-annual transfers.
Less known than its cousin, the Home Savings Account allows you to have money available when you need it . The minimum to pay on it is 300€ and then it’s as you want for the payments.
The savings account is accessible only to modest incomes with a ceiling of €7,000 and a current rate of 2.2%.
2.Term accounts (CAT)
Less famous than traditional bank books, term accounts with very attractive rates are becoming increasingly rare. That’s why we seek them out like the white wolf.
CATs make it possible to have investments with an increased remuneration that is known in advance. Its ceiling is higher than for classic booklets and the time to recover your funds is several days.
But you have to commit to a more or less long time or risk being penalized on the rate of pay. As usual, the more you commit to the long term, the better your CAT rate will be.
3.Life insurance funds in euros
Please note that life insurance allows you to invest your money in two types of media:
- funds in euros with a guaranteed return but which yield little;
- units of account where there is a higher risk but which can yield more.
With this kind of risk-free investment, you have a portion of your life insurance that is secure .
And then the tax advantages with this type of investment, or the Retirement Savings Plan, are significant: you do not pay taxes as long as you do not withdraw your money and only on the sums earned (therefore not on the entire withdrawal ).
Even with a risk-free investment you lose money
Yes, hard to believe. But that’s because of inflation . Basically, every year the cost of living increases little by little. But the fixed rate of remuneration of our various books does not grow, the money left on it cannot compensate for inflation.
We often think that we cannot afford to invest, but in fact, we have to ask ourselves the question differently. Can we afford not to invest and therefore lose money every year to end up in a worse situation than before. It is an invisible impoverishment.
“The question is quickly answered.”
Why you should not be (too) afraid to invest
Anything that is unknown can be scary, and that’s why the different investments can be seen as very risky. But we give you a few reasons to invest without taking too many risks either and knowing how to have (too) apprehensions.
As you will have understood, it is difficult to win big without taking risks . Even if there are various interesting risk-free investments, they are not the ones that will allow you to make interesting gains on interest.
We can never repeat it enough, the most important thing is to diversify well and to question the notion of risk.
Everything is a question of balance, but the risks taken in certain less certain investments can be compensated by the guaranteed capital in the best risk-free investments put in place.