We talk about inflation when products and services become more
expensive. Your groceries, your train season ticket or your
electricity bill, to give just a few examples.
A small amount of inflation – 2% or so – is good for the economy, as it means people don’t put off their purchases in the hope of a lower price later. It keeps the money flowing and the economy turning over nicely.
On the downside, your purchasing power will decrease if your money doesn’t grow as fast as inflation. To put it another way, if your savings stay the same and inflation is running at 2% annually, after one year, you’ll be able to buy 2% less stuff with your money.
So a bit of inflation is good for the economy but bad for your purchasing power. Which brings us to the big question: ‘How can I make sure that my money grows just as fast (or preferably faster) than inflation eats away at its value?’
Traditional savings account
This is the first resort for the average Belgian. And yes, there’s a
lot to be said for the ‘standard’ savings account: your money is safe,
it’s guaranteed by the government up to 100 000 euros and you don’t
need a textbook to understand it.
On the other hand, your money hardly earns anything, which means at a current inflation rate of around 2%, your purchasing power is still decreasing. If you have 10 000 euros in a savings account and inflation is 2%, after one year, you’ll have lost the equivalent of 200 euros in terms of what you can still buy. After five years, this amount rises to 1 000 euros.
You could wait until your savings account starts to earn more interest again. But even if interest rates rise, it’s very unlikely that they’ll do so by enough to cancel out inflation.
So while no one will deny that the savings account has certain benefits, it’s not an ideal way nowadays of putting your money to work.
From Lernout & Hauspie shares and Bitcoin bubbles to investor
clubs and stock-market millionaires. It’s hardly surprising that
people have mixed feelings, to put it mildly, about the stock
So why would you want to invest?
The answer is quite simple: for precisely the same reasons that we save. For a rainy day or to supplement your retirement pension. To allow yourself or your family a few more luxuries or to be able to give your children or grandchildren a helping hand in the future.
But it’s been a long time since saving was able to generate the necessary extra returns. Investing can take over that role, provided you take account of a few basic rules. Spread your investments properly, take a sufficiently long-term perspective and keep a savings buffer to cover unexpected expenses.
We’ve set out several of the most common objections to saving below, along with a few words of explanation.
You can lose your money on the stock market; there’s no guarantee that you’ll get your money back.
That’s true: KBC Brussels doesn’t have any funds or investments that
guarantee you’ll get back the money you invest.
How do we try to address that?
The traditional answer is that we draw up your investor profile – somewhere between defensive and highly dynamic. We’re required by law to seek information about your knowledge, experience, financial situation and investment goals. Based on this, we can already suggest investments.
But KBC Brussels takes it a step further. We also calculate your emotional profile. By taking account of your sensitivity to interim losses, we work out where your comfort zone lies.
It’s also important to diversify. Which is another way of saying that you shouldn’t put all your eggs in one basket. Because no one can predict in the long term what the stock markets will do.
In this way, we arrive at an all-in-one investment solution: one fund that will provide you with a good portfolio experience and will match your emotional and your investor profile.
You can then achieve a potential return in the medium to long term while feeling comfortable throughout.
You won’t be thrown by the ups and downs of the stock markets.
Investing is only for wealthy people.
That’s not right. Investing is possible with KBC Brussels from just 25 euros a month.
You can even use your spare change to invest. And here’s a thought: are you saving for your retirement through a pension fund? In that case, you’re already investing.
Investing takes a lot of time and energy.
You can indeed immerse yourself in the stock market – we have lots of
experts at KBC Brussels who like nothing better. But you don’t have
to. If you opt for our all-in-one investment solution, our expert
fund managers take the decisions.
You don’t have to put in any further time or energy. In return, you pay a fee to enter or exit the fund.
Scare stories about saving are a marketing trick to get people to invest, because the bank makes more money that way.
Investing can be a good option right now to earn a potentially higher
return and hence to counter the inflation effect.
If you subscribe to a fund managed by KBC Brussels you do indeed pay an entry and exit fee. But that doesn’t make investing a marketing trick designed to earn more money for the bank.
Our expert fund managers work hard for those fees, to make sure the fund performs as well as possible. Compare it with maintaining your car. You could do it yourself, but most people prefer to have an experienced mechanic do the work.
Investing can therefore be a win-win situation. You have a potentially higher return, while our experts are rewarded for providing their expertise.
Contrary to what you might think, therefore, investing can offer you
peace of mind. People who are scared off by the possibility of
short-term losses are jeopardising their potential long-term
How can KBC Brussels help you achieve this?
We base ourselves on your specific needs and objectives. Not
off-the-peg, but made-to-measure, taking full account of your goals