André, reader of Capital, asks us the following question: “My Livret A is full, where can I put my money?” Hello André, and thank you for your question. If you are writing to us, it is because you have reached the ceiling of 22,950 euros in your Livret A, and you have additional cash to invest. According to the Banque de France, 15% of Livret A accounts are in this situation. And you are all the more right to ask yourself the question since the rate of this regulated savings account, which still paid 3% at the start of the year, could soon fall again. According to our forecasts, it could in fact fall to 1.5%, or even 1.4% on February 1st. That’s a division by two in one year.
However, your Livret A should not be thrown away. Indeed, before embarking on other investments, it is crucial to determine what you need to keep on top of it to face unforeseen events, this is what we call precautionary savings. However, the Livret A, the Sustainable and Solidarity Development Booklet (LDDS), or the Popular Savings Booklet (LEP) are the investments most suited to this precautionary saving. You can thus keep three to six months of salary on it, even if this money is not very remunerative. The important thing is that this amount assures you “freedom of mind in the event of a hard blow”explains Valentine Demaison, director of operations at Mon Petit Placement.
To define your investment horizon, ask yourself when you want to recover your capital
As a bonus, this reserve is essential to then embark on other investments, because, according to the expert: “You will not have to hastily withdraw your investments in the event of constrained expenses. However, the guarantee of making winning investments is being able to let them work in the long term.” Once the question of precautionary savings is assured, you can then look into the solutions available to you.
For this, your savings horizon can serve as your compass. “Stocks, the most profitable investment, but also the most risky, are more suited to projects lasting five to eight years or more. Bonds are generally preferred for a three to five year horizon. And funds in eurosthese guaranteed supports available within life insurance, are preferred for projects lasting less than three years, for which security is essential.explains Valentine Demaison.
Life insurance allows you to juggle different investments
However, to decide between these different temporalities, life insurance is a good starting point, because it offers a wide range of possible investments, explains Valentine Demaison: “It allows you to develop your strategy without closing the contract. Within the same envelope, you can take a lot of risk at the start (in units of account invested in shares, editor’s note), then gradually switch to the euro fund as you approach a real estate project or a need for liquidity.for example a few years before your retirement. It thus makes it possible to respond to as many different projects as possible with great flexibility.
Among other guaranteed or lower-risk investments that could be alternatives to your Livret A, André, you can also look at real estate investment companies (SCPI). The investment horizon is, as for stocks, long term (at least eight years), with a risk between 3 and 7 on the risk scale, an average return which should be 4.7% this year. The great advantage of this solution is that it allows you to generate regular income every month or quarter. SCPI shares can be subscribed directly to the management company, or also included in your life insurance.
