Do you want to invest your money in 2021 and you are looking for the best possible investment? Let's be clear: there is no such thing as the "best investment", at least not in the strict sense of the word. It is only by studying your current situation, taking the time to write down your goals, and taking stock of your financial hopes that you will be able to know what type of investment you should make. Tacotax takes a look at the options available to you to help you choose the best investment for you!
How to make the best possible investment?
In order to make the best possible investment in 2020 and now 2021, you must first know your investor profile. Indeed, depending on the type of investor you are, you will not invest your money in the same way as another person. Your investments will be more or less risky depending on your age. For example, a young person will be more likely to invest reasonable amounts of money in long-term projects, while an older investor will be more likely to make secure short-term investments.
Similarly, the goal of such an investor will probably be to prepare for retirement, whereas a younger investor may not even think about it. So you need to think about your investment goals and how you are going to fund them. This is how you can put together a good financing strategy to make the best investment possible.
Making the best investment by varying your investments
The best investment does not have to be a single investment! On the contrary, you have the opportunity to vary your investments, so take advantage of it. This is undoubtedly the best way to make a successful investment in 2020 and it is still relevant today.
Putting your money in a savings product
Whether it is a Livret A, a Livret de Dรฉveloppement Durable et Solidaire, or a Plan Epargne Logement, none of these regulated savings products will bring you much money but they offer a guaranteed return. If their return is very low, these savings products are secure and you take no risk in placing funds in them. They will allow you to build up precautionary savings that will be useful for future investments.
Life insurance, one of the best investments to make
Nicknamed the "Swiss Army knife" of investment, life insurance benefits from an advantageous tax system, mainly for those who wish to prepare their estate. Whether you are a budding investor or not, life insurance has many strings to its bow, including:
- a guarantee of the capital,
- a guaranteed return,
- a controlled arbitration or under mandate,
- savings that are available at any time,
- the possibility to invest responsibly thanks to Socially Responsible Investment (SRI) funds.
Placing your money in a life insurance policy is an excellent way to secure funds while benefiting from a higher rate than the Livret A. However, this rate is not very profitable if the fund is exclusively in euros. To increase the profitability of your investment, the idea is to invest your money both in euro funds and in units of account (SICAV or shares among others).
A better investment thanks to stock exchange products
Much more risky, stock market products can allow you to develop your wealth considerably by acquiring shares in listed companies. The variation of the prices can allow you to realize interesting capital gains in addition to the dividends to which you can claim.
If stock market products have been reserved for professionals for a long time, you now have the possibility to invest in them, but be careful: this type of investment is rather dedicated to a public of insiders ready to lose money. To take the least possible risk with your initial capital, it is better to invest only the money you do not need to live. Also, consider diversifying your financial portfolio to dilute the risk. Finally, get some experience before jumping into the stock market! If you're ready to take the plunge, you'll need to open a securities account or a PEA to buy your first shares.
Investing for your retirement
Are you between 35 and 50 years old? Do you want to prepare for your retirement? Then the best investment for you is undoubtedly the Retirement Savings Plan (PER). It replaces the old Madelin, article 83, PERCO, and PERP contracts, and allows you to manage the money you receive as you wish. Except in exceptional cases, the funds invested in the PER will nevertheless be blocked until your retirement age. You can choose to withdraw your savings either as a capital sum or as a life annuity.
Moreover, you can deduct the payments made into your PER from your taxable income, within the limits defined by law.
Real estate, the best investment to make in 2021?
Investing in real estate remains one of the preferred solutions of the French who see it as a secure investment. Several solutions allow you to invest your money in real estate and even to save on taxes.
Schemes for tax exemption
Making a real estate purchase under the Pinel law or the Denormandie law is one of the best investments you can make in 2020 and now 2021. Indeed, in addition to preparing your retirement by investing your money in stone, you can benefit from tax advantages thanks to the Pinel scheme for new properties or those under construction and the Denormandie scheme for old properties to be renovated. However, certain conditions must be met in order to benefit from the tax reductions offered by these two schemes.
The main advantage of an investment in real estate is that it is one of the only ones that can be self-financed. Indeed, buying a property to rent it out will allow you to obtain rents that will cover your credit, taxes, and charges and even, if you have made a good investment, to make some extra money.
The SCPI: the best real estate investment to make?
First of all, it is important to understand how a Sociรฉtรฉ Civile de Placement Immobilier (SCPI) works. Investing in an SCPI means investing in professional rental real estate and receiving a regular income in the form of rent. It is probably the best investment to make if you want to invest in real estate but do not want to suffer the disadvantages of property management.
With a rate of return that can exceed 5% net per year, a rather affordable entry ticket starting at 100 $ for some, and sometimes the possibility of benefiting from tax reductions, SCPIs has many advantages.
Before putting your money in an SCPI, remember that it is an excellent investment when it is made over the long term. Observe the investments it makes, the strategy it follows, and its rate of return. Also, do not hesitate to invest your money in several SCPIs with different strategies and orientations. This is the only way you can make the best possible investment in SCPI.
Choose crowdfunding from real estate
Do you want to invest in real estate but are afraid you don't have the money for this type of operation? Have you thought about real estate crowdfunding? Very little was known until a few years ago, nearly 370 M $ were invested by this means last year in this type of investment. Thanks to participative financing, it is indeed possible to finance real estate projects by pooling the efforts of several people. Once the project is financed, the developer can carry it out and reimburse you with the interest as soon as the building has been sold.
If crowdfunding is so popular, it is not for nothing! Indeed, with an entry ticket of around 1000 $ and interest rates between 8 and 10% per year, this investment method has undeniable advantages.
However, there is a drawback: the capital invested is blocked for the duration of the operation (1 to 2 years on average) and there is always a risk of losing it. Do you think that real estate crowdfunding is the best investment for you? Then you should know that these projects are accessible after registration on specialized platforms.
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