The Capital accumulation plan (PAC) is a form of “intelligent savings” based on Investments in installmentsin other words a way to save money, also gaining something through the investment. They propose themselves as alternative solutions to the payment of their money in a single solution (PIC: capital investment plans) but have the same purpose. With the CAP, we undertake, in other words, to make a payment expired over time, for example every month, quarter or semester, for a predetermined duration of years. It works like a “smart savings“which grows over time thanks to the accumulation of its capital, that is, of the money set aside, to which are added the earnings deriving from the performance of the Municipality of Investment Fund in which these have been paid (which we can imagine as a package of actions and/or bonds). A fundamental feature of the PAC is the great flexibility: In fact, you can decide how much to invest, with what frequency and even whether to suspend or modify the plan according to your needs.
How a capital accumulation plan works: the simple explanation
By choosing to invest your savings in a CAP, the money is paid within one or more common investment funds that are managed by experts in the sector who, based on the progress of the bags, decide in which shares or bonds to invest to try to grow capital. The investment gradually takes place and with regular timing, reducing the risk of purchasing the shares of the shares and/or bonds at too high a price: in this way, when the markets are low, it can be purchased at cheaper prices, and when the prices are high, the purchase is less advantageous but the average price is balanced over time. Let’s take an example to understand the difference between investing gradually e mediate the purchase price of the sharescompared to investing in a single solution:
Imagine we have 6 euros available and having to go to the supermarket to buy apples. If we spent everything immediately when the apples cost 1 euro (T1), we would buy 6. If instead we spent 2 euros at a time in three different moments:
At the first purchase (T1), the apples would perhaps cost 1 euro → we would take 2.
At the second purchase (T2), the price would drop to 0.50 euros → we would take 4.
At the third purchase (T3), the price could go up to 2 euros → We would take 1.
In the end, we would have always spent 6 euros, but with the second method we would have 7 apples instead of 6. This is because we would have taken advantage of the moment when the apples cost less, lowering the average cost of purchasing.
Why choose a PAC: what are the advantages
Investing in installments, that is, at different times, has essentially several advantages. Among the main ones there is to reduce the risk of investing all the capital at the wrong time, when the prices of the shares and bonds are very high. Indeed planning payments And the consequent purchases of quotas in the bottom, you will find yourself in front of moments in which it will be acquired at higher prices and others in which the prices will be more low, but in the end the purchase price will be an average. Also, making a PAC, you bind to a predetermined plan, reducing the risk of affect your savings To the first necessity, with the hope of setting them on again shortly thereafter: a PAC “forces you” to save and allows you to decide in advance, even if approximately, which capital will want to have in the future, setting aside pieces after piece the savings until the set goal is achieved.
Why could it be less convenient to set aside on the current account?
If you already have money aside and have been set aside on current accountthese sums are most likely unspecifiedthat is, they do not bring earnings (fruits), and are also subject to the impact ofthenfulation And to the risk of being used at the first useful opportunity, forgetting the reason why they had been put aside. Obviously, to evaluate the convenience or not of a provision in a CAP compared to other forms of provision, it will also be necessary to take into account the signing and management costs present in each investment. Setting up their savings through a PAC is a form of savings suitable for everyone: both to those who already have savings and want to increase them, and to those who have not yet put sums for the future aside. Often, a financial consultant It is the right figure to support and recommend what is most effective for one’s own needsand to help change course in parallel with the changes in one’s life.
