You will no doubt play with the thought from time to time. Saving your poor or doing something else with your money after all. Shares, Bitcoins or an extra deposit in a pension insurance policy for later. But maybe later has already begun and you would rather not wait until you are stuck with your walker on a sun-drenched beach by the Mediterranean sea.

Calculation

• A little calculation shows how quickly a tonne of savings disappears like snow in the (Dutch) sun.
• Average interest on a savings account in the Netherlands is 0.54%. Over € 100,000, this means an annual interest income of € 540
• Over € 75,000 (= € 100,000 minus the exemption of € 25,000), you pay 0.87% tax, converted: € 652.50
• The difference between the interest received and the tax due is. The difference between the interest received and the tax due is €112.50. Loss for the saver, therefore.
• To this loss of € 112.50 you must also add the inflation correction: As we saw earlier in this calculation example, an amount of € 1400.
• In short, a negative return of €1,512. In percentage terms, this amounts to a negative return of about 1.5%

Is investing the solution?

So if you want to maintain your wealth, you need to look for other forms of investment. Possibilities could be shares, bitcoins, extra pension insurance for later. But there are no guarantees of good returns. Moreover, it remains a paper investment, which you cannot enjoy now. Another option is to buy real estate. Several options are conceivable here. For instance, a student house in a college town with attractive rental income and a chance of increasing the property’s value. But enjoying it yourself is not an option here. Another option is buying a holiday home at home or abroad. Of course, there are also risks involved here. Holiday rental yields may disappoint, region may fall out of favour, economy may decline, mortgage rates may rise. These kinds of factors can also negatively affect the value of your (second) home at home or abroad.

The difference with other investments, though, is that you can enjoy it now. In other words: You are better off sitting on your own terrace under the sun than on your cash (or shares and bitcoins).

Uitgeverij Guide Lines
www.eenhuisinhetbuitenland.nl