Managing your money well means being able to set aside part of your income to create what is known as “savings”.
Savings are all sums set aside or used to create future capital.
In short, it is money that is not used and is kept aside for a variety of reasons. If you still doubt the importance of saving, here are four good reasons that should convince you!
To cover unexpected expenses or treat yourself
A broken-down car, a blocked sink, a stolen phone, job loss, a washing machine that breaks down... no one is immune to the unexpected, and some unexpected events can be costly! These surprise expenses can become a source of anxiety and create a real hole in your budget if you don't have the funds available. That's why it's important to set up what is known as an emergency fund.
An emergency fund is a precautionary savings account (often in a bank account or kept in cash) that you can dip into when faced with unexpected expenses. So, every time you receive income, remember to set aside a small portion of it to build up this fund.
Saving also allows you to treat yourself. If you are planning to go on holiday or buy yourself an expensive gift, don't hesitate to prepare for this large expense by putting money aside several months in advance. When the time comes, you won't need to use your overdraft, take out loans or upset your monthly budget. All you'll need to do is dip into the savings envelope you set aside for this purpose.
We recommend that you have liquid, readily available savings representing 3 to 6 months' income.
To prepare for your future and retirement
Belgians rightly believe that their pensions are or will be insufficient to live comfortably. The current financial system seems very unstable and is facing crises that could undermine our social gains in the future. That is why we should not rely exclusively on the State. You also need to think about solutions that will provide you with a minimum level of financial security when you are no longer able to work.
To invest
Saving allows you to put your money to work so that it grows.
Depending on your savings goals, your savings may be held in investments that generate returns, but where you will not be able to withdraw your funds relatively quickly with little or no fees.
Quercus Risk & Capital favours insurance savings through Branch 23 funds in order to generate returns on your savings.
Let us discuss it and consider together what suits you best!
Branches 21, 23, 44 and 26
When you want to invest your money, you usually think of life insurance products. These can be branches 21, 23, 26 or 44. What is the difference between these four branches, their advantages and disadvantages, and what do they mean?
Let us discuss it and consider together what suits you best!
Branch 21
A Branch 21 insurance contract is a medium- or long-term savings or investment solution. This contract is drawn up between a policyholder, an insured person, a beneficiary in the event of life and a beneficiary in the event of death. The contract is settled in the event of the death of the insured person, at the end of the contract or in the event of surrender.
One of the main advantages of this branch is that it offers a guaranteed interest rate on the reserve (0% or more), i.e. on the money saved (premiums paid, less insurance tax and any entry fees, and interest earned in previous years). This interest rate may be increased by a life bonus* allocated to the policy. Although the interest rate is guaranteed for each payment over the period defined in the policy, the life bonus depends, among other things, on the insurer's results.
A second advantage of this Branch 21 policy is that the insurer bears the risk and has an obligation of result towards the insured. However, if you wish to withdraw your money early, exit fees and/or withholding tax may be payable. This withholding tax amounts to 30% interest calculated on the basis of a notional return of 4.75%.
When premiums are paid, depending on the insurance contract chosen, the State imposes an insurance tax (2%) on the premiums paid (except in the case of pension savings, cf Tax Savings). In addition, entry fees (on each premium paid) and management fees (based on a percentage of the reserve) may also be payable.
Branch 23
Branch 23 life insurance policies allow you to aim for a potentially higher return. However, solutions in this branch do not offer any guarantees on capital or returns. Returns vary according to fluctuations in the stock markets.
The return will therefore depend on the investment funds chosen according to your profile, your risk appetite and your needs. Bear in mind that, as with Branch 21, you pay a 2% tax on the premiums paid but, on the other hand, no withholding tax (30%) is due. It is also possible to terminate a Branch 23 contract early.
Quercus Risk & Capital offers more than 500 Branch 23 funds, covering all types of investor profiles.
Branch 44
A Branch 44 insurance contract consists of a mixed investment combining Branch 21 (security vector) and Branch 23 (potential performance driver) within a single insurance contract. Branch 44 allows you to achieve the balance that best suits your profile between the security offered by branch 21 and the potentially higher performance that characterises branch 23.
Branch 26
Branch 26 is not an insurance contract like branches 21, 23 and 44. Branch 26 is a capitalisation operation for your investment or savings.
The primary advantage of Branch 26 insurance is that, depending on the solution you choose, it offers you either a guaranteed interest rate supplemented by a possible annual profit share, or a base rate supplemented by a loyalty bonus.
One advantage of Branch 26 is that you do not have to pay any tax on premiums, as it is not an insurance contract, unlike Branches 21 and 23. However, at the end of the contract, you will have to pay withholding tax on the actual return. Depending on the type of solution you choose, medium or long term, you will have to pay 30% interest (actual return) and exit fees if you withdraw your capital earlier than planned. If you choose a short-term solution, you can access your money at any time, with no entry or exit fees.