Investing and insuring finances is very important in the world, because we will not be able to accurately predict what will happen for a second in our lives. Therefore, we will review how important insurance and investment are.
The function of insurance is to get protection for a person or his family in financial terms from risks that come suddenly or unexpectedly. While the function of investment is to meet future needs so that one's purchasing power is not depleted by inflation. These two financial products are very important.
WHERE IS THE MOST IMPORTANT BETWEEN INVESTMENT AND INSURANCE?
Many think that these two things have a lot in common and all you have to do is choose one of the two. That is wrong. Buying insurance can not double the money you have. It's a shame that so many people still think that way. Insurance does not have the concept of developing money as in investing. The concept of insurance is more aimed at anticipating the risk of the emergence of unexpected things such as illness or accident.
When things like that happen, then you can get some money as a form of coverage that you get. You get the dependent money because you have paid insurance premiums regularly before. But if there are no unexpected things as mentioned above, then the premium you have paid will be forfeited or become the property of the insurance company. In general, insurance for individuals can be divided into accident insurance, life insurance, critical illness insurance and health insurance. Each of these insurance products has different benefits.
THEN WHERE CAN WE INVEST SO THAT MONEY DOESN'T GO IN VAIN?
Stocks are one of the most popular types of investment by the people of Indonesia. If you buy shares of a company listed on the Indonesia Stock Exchange, then you act as a shareholder of that company and get the right to dividends equal to the percentage of shares you own in that company. In addition to the right to dividends, you can also benefit from the difference in the selling price of the shares. Its liquid nature and easy trading is certainly beneficial for you when you want to transfer these shares to someone else when your share price is rising.
In terms of profits, stock investments offer higher returns than other types of investments. However, with the nature of the excessive return, stock investment is also a high risk because the price fluctuates and is highly dependent on economic, political, and certain circumstances such as holidays.
The definition of mutual funds can be found in Law no. 8/1995 concerning the Capital Market, which means that it is a forum used to collect funds from the investor community to be further invested in securities portfolios by investment managers. In this case, you as an investor only need to provide capital which is then managed by the investment manager to be invested in a securities portfolio. The securities portfolio in question consists of money market products, bonds, and stocks.
Opening a time deposit in a bank is another type of investment that you can choose. This time deposit has a higher interest rate than ordinary savings, and has a clear maturity date, usually 3 (three) months to 12 (twelve) months. Where, if you withdraw funds before the due date specified, you will be penalized by the bank concerned. The longer and the larger the nominal amount of money you save as a deposit, the greater the profit you will get. Not only that, this type of investment is also an investment that has low risk and is fairly safe. To make a deposit is also considered quite easy and uncomplicated, so many novice investors start their investment by opening a deposit.
Bonds (Debt Securities)
Bonds are transferable medium-term and long-term debt securities, which contain a promise from the issuer to pay interest in the form of interest in a certain period and pay off the principal debt at a predetermined time to the bondholders. The yield of interest that will be received by bondholders is in the form of coupons.
As we know, land and buildings are very promising and lucrative long-term investments. Where, property values will continue to increase from year to year and the percentage increase reaches 15-20% per year, especially if you get a strategic property location. In addition, this type of investment has minimal risk of bankruptcy, because property itself is one of the basic needs, whether for residence or business. However, choosing this type of investment means that you have to prepare quite a large amount of money to buy the property and maintain the property. By owning property, either land or buildings, you can rent out the property while waiting for the property's value to rise, then sell it. By renting out property, you will get a sizable profit from passive sales and your property is also better maintained because the tenant will take care of your property. However, make sure that you prepare a lease agreement when you are going to lease your property to another party. This is done so that you can ask for compensation if the tenant causes damage to your property.
Gold & Precious Metals
Gold and precious metals are one of the classic types of investment that are popular among Asian people from ancient times to the present. This type of investment is suitable for those of you who want long-term investments, because the price of gold and precious metals will continue to increase and usually this price increase is due to a response to certain events that cause the value of paper investments, such as stocks and bonds, to decline. This makes the type of investment in gold and precious metals classified as safe because the price is stable, especially when the stock market is experiencing a decline.
Insurance is important not only to protect yourself, but also to protect your family and the assets you have, such as houses, vehicles, and so on. If insurance usually only functions as protection, now insurance can be used as an alternative investment. This investment-based insurance combines 2 products, namely insurance and managed funds such as mutual funds. Generally, the premium you pay is converted into units. This unit that you own will be divided into 2 types, the first to pay for insurance costs, and the second to invest. Insurance that is commonly used as a long-term investment is life insurance.