8 Financial Products You Must Avoid to Become RICH
If you want to become rich, There are financial products you should buy, There are financial products you shouldn't buy.
Below is the list of the things you must not buy/take/consider if you want to be happy and rich.
1. Life Insurance Policies like Money Back and Endowment Plans
Insurance is for protection, Most of the people forget this basic tagline and invest money in different insurance products.
Think...! in money back and endowment plans, You trying to protect the money which need to be grown.
As i am financial planner, when i calculate returns of these products mostly 90% of the products gave less than 6% returns. which is less than bank fixed deposit.
But intelligent insurance calculations don't reveal this secret to you, and it gives a hype that you earning so-much. Because they never let you think about INFLATION.
So You must avoid this kind of products from your financial basket.
2. ULIP Insurance Policies.
ULIP policies invest some portion of money in equity market and gives you good returns.
But the problem is another side of it. Its the Fees and Commissions on it.
Yes..Whenever you buy an Insurance policy some % of the commission goes to your agent and some % goes to marketing team, Some % goes to a guy who manage your ULIP fund. Even that ULIP policy performs good, You receive very low returns.
3. CHILD Plans.
This is the same policy ( as like Money Back and Endowment ) with different name. If you have Term Insurance along with SIP better avoiding this child insurance policies.
Again i am re-iterating, Insurance is for protection not for making you rich.
4. Annuity and Pension Plans.
Do you know a monthly 20,000 expenses today will become 1,15,000 after 30 years with inflation 6%.
As per this, Try to listen to any Annuity plan. they hardly beat inflation and gives you sufficient reserves for your old age.
Retirement planning is the one of the most crucial for your happiness. because that was the time you have to take rest. (This is the only time, You can take rest)
Of-course it is must. Your body don't co-operate as like you are in 20's and 30's. That time going to work and earning money means....Its not right.
5. Home Mortgage Insurance:
when you buying a house, You may need some percentage as loan. So most of the people go for home insurance. Because its cheap and gives you tax benefits.
But when you taking home loan there the banker insists you to take a insurance on the loan (Its called home mortgage Insurance). It costs you 1% or 2% of the loan taken. It is very high as per my understanding.
If you have term plan, You can avoid it. But make sure your insurance coverage must be high in term plan. When someone gives you Insurance planning, Intimate them about this scenario.
6. Do not take personal loan/ loans via Credit Cards:
Credit card is for shopping and emergency needs. we know interests on credit cards are usually high.
When you go for loan on credit card, they charge high interest rates. But in some times they offer very low interest rate But charge high processing fees.
Be cautious and ask for all charges when you go for loan on credit card.
Create an emergency corpus and utilize that money for any emergencies.
7. Do not invest in Penny Stocks
Penny stocks sound great in theory: These are very small company stocks and have very volatile in nature. They are inexpensive and have unlimited upside potential.
But when you investing in it, Have to be very careful, Because even for small shifts in market direction effects these stocks allot.
8. If you young, Avoid Investing in FD, RD, Post office Savings for long term goals
Post office savings, Fixed Deposits, Recurring Deposits is for short term goals. Safe and secure but it gives low returns and hardly beat inflation.
So if you have long term goals, Better avoiding these debt instruments and better have Equity Mutual funds SIP in the place of these products.
These are the things you must avoid for becoming RICH and Best utilization of your money.
"Managing Money is More Important Than Earning More Money"
If you need help of mine for managing your money, Feel free to contact me at 9160425262.
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