4 underrated financial products you should invest in in 2022

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Emergency fund

An emergency fund is now considered underrated, previously it was one of the most overrated financial tools. Our parents used to keep a certain amount of their income aside as an emergency fund. There are a number of reasons an emergency fund is important, but a medical emergency is one of the most compelling reasons to set aside money for an emergency fund. When you’re already dealing with a medical issue, having an emergency fund can relieve a lot of stress. Due to all sick days, there may be reduced or no pay. Therefore, an emergency fund can help in such a situation. Also, in the event of a financial crisis, emergency funds could be of great help. This will alleviate the stress of skipping bills while allowing you to focus on your monthly budget.

Health insurance

Health insurance

In India, insurance penetration is low, especially for general insurance, which includes liability, motor vehicle, property and health. However, it is essential that more people take out general insurance. The risk of illness, accident, catastrophe and lawsuit is reduced by a well-developed general insurance market. The IMF recognized low insurance penetration as a critical industry issue in its April 2018 technical paper on insurance industry regulation and supervision. Moreover, in India, an ordinary person spends a lot on medical expenses. Having health insurance could be controlled.

Investment in mutual funds

Investment in mutual funds

This might surprise most of you. However, it is true in India. Due to the system we have in India, this statement is only half correct. India has always been a market for tangible assets like gold, currencies and real estate. The financialization of savings, especially investment in mutual funds, has been popular in India over the past five years. Due to the inherent dangers of volatility and a lack of knowledge of the market, Indians are not big fans of stocks. Every month, the MF receives nearly one million investments, mainly through the SIP channel. However, MF has been underestimated in India, but this may change in the next ten years, as exponential growth in this sector can be expected, with great interest from the government.

Pension fund

Pension fund

According to the PGIM Survey on Retirement Readiness 2020, majority of Indians do not have a retirement plan in place. PGIM conducted a survey in February 2020 to see if Indians were saving for their golden years. It can be costly to grow old. In India, majority of people after retirement depend on their children, while only a few between 1/3 and 1/4 plan for their retirement. Retirement funds are an important financial product, because over time the expenses increase and it is not advisable to depend on children or anyone. The future is uncertain, medical expenses will only increase, despite the fact that frivolous expenses may decrease. When inflation is factored in, not having enough money to cover future needs can be stressful and worrisome. The goal of a retirement investment strategy is to achieve financial independence in your later years without relying on others.

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