How to invest €50,000 well in 2023?
You have put money aside and have a tidy sum to invest, namely 50,000 euros. In 2023, the investment offers available on the market are numerous and you are spoiled for choice.
In reality, the best choice in this area depends on the degree of risk you are willing to accept, your investment horizon and your existing wealth. Nevertheless, we give you the best tracks to follow in 2023.
Invest 50,000 euros in 2023 taking minimal risk
You have a cautious investor profile, and the 50,000 euros earned by the sweat of your brow or inherited from your family, you do not want to lose them. What you want is to keep them safe, so that they don’t lose value due to inflation, while still being available at all times.
Zero-risk investment, savings books allow you to put your money in a secure account. The investment can be made on sight, the money is available there at any time. It can also be made in the long term, the money is recoverable in a few months, defined according to the contract.
You can choose a regulated savings account, such as the Livret A, and supplement it with unregulated savings accounts, offered by physical or online banks. Boosted booklets are also available at attractive rates, if you place a substantial sum on the latter for several months.
However, in 2023, do not expect to make money with this type of investment. At best, you won’t lose any. Indeed, passbook pay rates are currently low, while inflation is present. The Livret A rate, for example, did not exceed the 0.5% mark during the rate review in August 2023.
Assuming that you would invest your 50,000 euros in savings accounts at 0.5% for a year, you would have a maximum of 250 euros in interest at the end of the year. And again, excluding regulated booklets, you will also have to pay income tax and social security contributions.
A favorite investment of the French, life insurance is still favored by investors, in particular because it has been able to adapt over the years by offering ever more competitive rates and services. By directing you to a good life insurance online, the costs are significantly reduced and the investment vehicles are numerous.
On so-called multi-support life insurance, you have the choice between:
- A euro fund, with a return guaranteed by the insurer,
- Units of account, more or less risky depending on their nature (bonds, shares, SCPIs, trackers, etc.).
Contrary to popular belief, the money is available at any time via partial or total withdrawal (resulting in the closure of your life insurance). Nevertheless, for tax reasons, it is advisable to avoid withdrawals before 4 years in order to benefit from certain exemptions.
Be aware, however, that on the euro fund, the net return on life insurance has continued to decline, following the price of savings accounts. By investing your 50,000 euros only in the euro fund so as not to take any risks, you can reasonably expect 1% interest, or 500 euros for one year of investment in 2023.
In view of these low returns, it seems necessary to gradually diversify your portfolio within life insurance, with a few bonds and trackers, in order to smooth out the risk as much as possible and increase your gains over time. By opting for managed management, the insurer can take care of it for you, after having defined your expectations with you.
The PER Retirement Savings Plan
With a higher posted rate of return than that of life insurance, fluctuating around 2% on average in 2023, the PER is an interesting product for investing 50,000 euros without taking the risk of seeing your savings reduced to nothing.
Note that the sums invested in your PER can reduce the amount of your income taxes, provided they are taxable of course. However, this reduction is subject to a double cap:
- 10% of your net income generated the year preceding the investment,
- Reduction that cannot exceed the amount of your investment multiplied by your MTR Marginal Tax Bracket.
Let’s take a concrete example, you are liable for income tax at a TMI of 30%. You pay 50,000 euros on a PER in 2023. Your tax reduction cannot therefore exceed 15,000 euros in 2023. But your income was 50,000 euros in 2023. In reality, your tax reduction will be capped at 10% of this amount, i.e. 5,000 euros.
Nevertheless, by bringing you 2% interest on 50,000 euros, your Retirement Savings Plan earns you 1,000 euros in interest in one year. It therefore remains an interesting product for those who wish to grow their savings and benefit from tax advantages.
Be careful however, the money is not available there, the investment being available only upon retirement, except in the case of specific exemptions enacted by law.
Invest 50,000 euros in 2023 taking a moderate risk
To start, you can take a higher degree of risk, correlated with a higher return prospect, by choosing the investments already mentioned, such as life insurance and PER. In this case, it is the choice of your supports that will make all the difference. But there are also other products for you to invest in in 2023…
We hear a lot about it lately. SCPIs or “paper stone” investments are an investment in real estate without bearing the constraints. Clearly, you become a holder of SCPI shares, while the manager takes care of the rental of the real estate stock, the collection of rents, repair work, etc.
By investing 50,000 euros in SCPIs, you are not the direct owner of the property, but can acquire shares in management companies offering the best returns. Because indeed, you will receive additional income, often quarterly, having the character of rent.
The best-performing SCPIs show a rate of return of between 4% and 6%, i.e. four times more than a savings account and two to three times more than a PER or life insurance. With 50,000 euros, you can legitimately expect an annual return of 2,500 euros.
Be careful, however, to take out your calculators, you will have to pay taxes on the income generated. Furthermore, the risk of SCPIs is inherent in the risks of the real estate market in general. If real estate falls, so do SCPIs. Similarly, the risk of bankruptcy of the manager cannot be ruled out. It must therefore be chosen conscientiously, according to its past performance and its rigour.
The PEA is a very interesting medium for taking your first steps on the stock market. Funds held in the PEA are not subject to tax as long as they remain in your plan, and your earnings will be tax exempt if you withdraw them after 5 years of ownership. Indeed, only social security contributions of 17.2% in 2023 will be due upon withdrawal.
The PEA is a tax envelope allowing you to build up a financial portfolio mainly made up of French and European equities, shares in SICAV and FCP funds, shares in SARLs, but also certain trackers.
Capped at 150,000 euros, it is perfect for investing your first 50,000 euros in the stock market. However, past performance does not predict future performance, and the PEA carries a risk of capital loss which you should be aware of before investing all your money in it.
By diversifying your portfolio with a good distribution of funds, or by betting on different trackers whose aim is to replicate the performance of a market (for example the CAC 40), you considerably reduce the risk of long-term losses.
Invest 50,000 euros in 2023 by taking a high risk
A high yield is possible, but uncertain! If, however, you are ready to take the risk of losing all or part of your 50,000 euros, in order to earn more, the following products will certainly suit you…
The securities account
Unlike the PEA, the CTO does not benefit from an advantageous tax envelope. But in return, it does not limit your field of action on the stock market. Thus, you can invest on a global scale, for example by betting on foreign markets in the United States, Asia, or even those of emerging countries.
The crypto currency
Sometimes record gains, and sometimes dry losses, such is the cryptocurrency market. However, some have embarked on the adventure and have become rich. So why not you ?
Whatever your goals, we advise you to diversify your savings as much as possible. Your 50,000 euros can be invested in different media. Thus, a portfolio with 20% in passbooks, 20% in euro funds, 30% in SCPIs and 30% in shares can be a most relevant choice.