Small Business Investment Ideas : Detailed Review
Optimize your wealth
The table above can already greatly help you. First of all, you will be able to calculate the net value of your assets (deduct your debts from what you have): 3 000 € + 10 000 € + 5 000 € + 25 000 € + 8 000 € + 145 000 € – € 1,800 – € 6,000 – € 80,000 = € 108,200.
Then there are some operations to do, first of all the immediate repayment of your consumer credit. These loans are often granted at prohibitive rates of up to 30%, against which the money placed on the sustainability book gives you less than 1%.
Small Business Investment Ideas : Tips and Advices
You should therefore immediately settle this debt, even if you have to divest some of the amounts on the booklets. The same question can arise for your car loan depending on the rate of it.
It is not necessarily necessary to prepay your mortgage by unlocking your life insurance, especially if the rate you hit on life insurance is higher than the one you pay on the mortgage. This should be the case if you have recently renegotiated the rate of your loan with your bank.
However, it is not recommended to block all of your assets in long-term products. You should also keep a certain amount available immediately on a bank booklet in order to be able to cope in case of a hard blow resulting in exceptional and unforeseen expenses.
This will typically allow you to buy a new car or pay health expenses without having to take out a credit. The amount of this precautionary savings will vary depending on your standard of living, but should ideally be between 3 and 6 months minimum salary.
Small Business Investment Ideas : Information
Establish a budget
Once your wealth is established, you must identify and estimate your inflow and outflow of money: wages, shopping, rent, gas. A monthly budget may be sufficient in some cases, but we recommend an annual budget that should include all the events that could affect your finances seasonally: taxes, holidays, tuition.
The balance of revenue minus expenses is your gross savings capacity. If it is negative, you should tighten your budget because you live beyond your means (unless it is an exceptional situation in the short term). Remove a margin of safety on this balance to protect yourself against the unexpected, you should get your savings rate.
For information, the average savings rate of French households is around 15%, of which 6% in financial savings and 9% in housing (typically in mortgage repayment).