After World Savings Day this Monday, Oi explored different products in which he could invest his money. A task that is not always easy. According to a study by Intrum, 33% of Portuguese admit that in the face of an unforeseen problem, they could pay the equivalent of less than a month’s salary from their savings without going into debt. However, it represents a percentage above the European average of 26%. It’s true that there are always small steps you can take in your daily life that can make a difference at the end of the month. Your wallet will thank you and your savings could get fat.
Term deposits – If its simplicity is one of its advantages, the offered rate of return makes this financial product less attractive despite the European Central Bank (ECB) raising interest rates. A solution that punishes those with credit but benefits those with savings. According to the latest data from the Bank of Portugal (BdP), the amount of new term deposits in August increased by 7% compared to the previous month, reaching 4,124 million euros. This is the highest value recorded since January 2020, when it reached 4,195 million euros.
The truth is that in recent years this product has been losing fans due to low rewards. According to Decaux, “Typically, term deposits up to 12 months, which can be mobilized in advance, are the best option for this first phase of savings. Although current returns are not particularly attractive, capital is guaranteed and liquidity is immediate.
And if there is no financial investment that is 100% risk-free, it is also true that there are applications that carry more risk than others. If we analyze the risk scale of various financial products available to depositors and investors, deposits are among the safest applications, and in the worst case and in the event of a bank failure, customers can apply to the Deposit Guarantee Fund up to 100 thousand euros per bank and holder.
Savings certificates and KTPK – The loss of attractiveness of time deposits leads to the fact that Portuguese savers are increasingly turning to public savings products. In this universe, Treasury Growth Savings Certificates (CTPCs), which have replaced Treasury Savings Certificates, are the product that generated the most interest. In the case of savings, the rate of return is calculated based on the three-month average Euribor observed over the previous ten business days, plus 1%. The interest rate on new subscriptions to savings certificates (Series E) is set at 2.106%. In CTPC, the interest rate increases: in the first and second years, 0.75% (gross interest) is paid, and in the third year it rises to 1.05%, in the fourth – 1.35%, in the fifth – 1.65% and 1 .95%. % in sixth, reaching 2.25% last year. From the second year onwards, the interest rate increases by a premium corresponding to 40% of the average real GDP growth at market prices for the last four quarters known in the month preceding the interest payment date.
tantalizing obligations – Until recently, buying treasury bonds (OT) was a bargain, as it was one of the most lucrative uses for capital-backed medium- to long-term savings. But if OT was given new life in 2016 when the government issued Treasury Variable Income Bonds (OTRV), the product began to lose its appeal, and with it, the disinvestment trend that Portuguese families tracked increased. , in debt securities.
In terms of risk, it is similar to certificates, that is, there is only the risk of losing capital in the event of a government default.
Retirement Savings Plan – The main advantage of PPRs was the tax credit they provided, as they allowed deducting 20% of annual deliveries up to 300, 350 or 400 euros depending on the subscriber’s age. But since 2015, the rules have changed: the limits are based on age (400 euros up to 35 years old, 350 euros from 35 to 50 years old or 300 euros for those over 50 years old) combined with limits on total deductions. from the collection. Most PPRs are capital guaranteed, so the risk profile is moderate. According to Decaux, those who have less than ten years left before retirement should not invest more money in PPR in order to be able to buy them out at the age of 60 without any problems. Individuals aged 40 to 55 may continue to invest because some PPRs have higher interest rates than deposits.
The state is also introducing its own product known as State PPR. Monthly, 2%, 4% or 6% can be deducted from the salary, depending on age. This means that you will only reach the maximum benefit limit if your monthly income is over EUR 3,645 (with a 4% discount) or over EUR 7,292 (with a 2% discount).
If a – Direct investment in the stock market still intimidates many Portuguese. This can represent a profitable business, but the risk is always higher compared to other investment products. The investor can make a purchase individually, by directly choosing the shares he needs, or through equity funds by purchasing units of one of these instruments. Experts advise stakeholders to make these investments over time (at least five years) to overcome market fluctuations.
What is the best way to invest your money? It is best to invest periodically and regularly. The trend of financial markets is to rise in the long run. Periodic and regular investments also allow you to eliminate the influence of emotions on investments. Do not try to guess the best time to invest.
Do not forget, however, that in times of greater uncertainty, we should avoid investing in a particular asset. The focus should be on a diversified strategy, betting on multiple assets and ultimately different asset classes.
Don’t forget the divide and conquer rule: by choosing bonds from different countries and sectors, you can reduce investment fluctuations.
Consider your financial intermediary: choosing the right one can mean saving many euros, as choosing the best financial intermediary depends on your investor profile.
Gold – Gold is still viewed as a good safe-haven investment in the event of a major global crisis and collapse of the financial system. However, this advantage applies only to the metal in physical terms, since when it comes to investing in financial products related to gold (funds, ETFs, etc.), it must be borne in mind that the price of this raw material is extremely high. predict.
There are other disadvantages associated with its growth potential and speculation in the market. And, contrary to what you might think, when you decide to sell bullion, nothing guarantees that you will make money. If you take into account the commissions and margins charged by banks, the losses will be even greater. It is very likely that even during a period of rising world prices for gold, you will not get a better price for bullion, given the difference between the sale and purchase price.
But, regardless of the chosen method of investing in precious metal – from having it on hand, buying coins and bars to investing in financial products with gold risk – the investor must always take into account the time horizon that needs to be seen in the long term and potential investment losses, since gold has been losing its luster lately.
emergency fund – The first step is to eliminate overspending. There is no magic formula for balanced accounts and savings. Either earn more or spend less. Since it is not always easy to increase income in personal finance, it is necessary to control expenses. After comparing income and expenses, you should try to identify unnecessary expenses that can be reduced or eliminated without compromising your well-being. See how much they weigh in your budget. Maybe the answer is not to save or save a little.
Ideally, write down all the debts (how much is left to pay, installments, term and interest) and identify the ones you want to liquidate. You should start with debts with the highest percentage. If in the short term he does not see the possibility of liquidating or reducing debt, his debt capacity is low. Take advantage of the extra income to reduce your debt burden. But in assessing your financial health, it is important that you know if you are ready for the unexpected. Whether it’s unemployment, a low rate, or another emergency, there are unforeseen events that can indicate a total lack of control over the budget. Ask the question: if you stopped working today, for example, because you were unemployed, how many months could you live with the same level of spending? Ideally, have an emergency fund (in liquid assets) that allows you to live for at least six months with the same level of spending – that is, if you have 500 euros of monthly expenses, you should have an emergency fund of 3 thousand euros.