The best strategies to invest for the long term

Who doesn't dream of achieving financial independence, giving up their job while continuing to lead a comfortable lifestyle? You don't necessarily have to be a wealthy heir to earn a fortune, you just need to know how to use the money you earn and invest it over the long term, as in the case of life insurance.

Life insurance as an investment

Life insurance is a contract that allows the policyholder to save money while earning interest. It is a financial investment whose advantages are particularly multiple over the long term. The capital invested in life insurance will be attributed to a designated beneficiary upon the death of the subscriber or to ensure his or her survival. Deciding to take out life insurance is a good strategy as long as you invest for the long term to give the money time to grow. As a savings tool and not a speculative one, with life insurance, the insured can choose how to manage his or her capital in order to better monitor his or her funds.

Life insurance investments

With the life insurance contract, the subscriber has two investment support options: on a fund in euros or in units of account. With life insurance on a euro fund, the capital invested is protected; the subscriber does not lose his money, his capital will grow as the years go by. This type of investment provides a capital guarantee. Unit-linked life insurance or a fund in action on the other hand is a risky choice but its rate of return is higher than with the euro fund. With the unit of account, the insured can invest in assets such as shares in companies, bonds, a real estate project. The value of the unit of account depends strongly on the market trend, it can thus obtain a negative return which can lead to a loss of the invested capital for the insured.

Life insurance and taxation

Life insurance is an investment with a double advantage: interest that increases over the years and a very attractive tax regime after a certain period of time. The fiscal maturity of life insurance is reached after 8 years and the subscriber will benefit from a partial tax exemption on the income tax whereas there is no taxation after 5 years with the PEA. However, life insurance offers more possibilities compared to the PEA: no payment ceiling and a less restricted investment.

Different types of assets for a long-term investment

Profitable long-term investments

All investors, regardless of their profile (prudent, dynamic or balanced), are looking for the ideal investment. The one that combines profitability, interest and security, with, if possible, a tax advantage. At the risk of disappointing, such an investment does not exist.

This is a criterion that should be taken into serious consideration when investing, because it is the product’s lifespan (also called “maturity”) that determines the success of your project. In other words, you should base the horizon of your financial objective on that of your product.

All the experts say it: it is the basis of every successful investment and it is pure logic. If you invest the same amount in 4 different companies as one of them files for bankruptcy, you will lose 25% of the invested capital. The risk is even higher if you concentrate your investment on a single sector (luxury, gold, oil, etc.).