In today’s world both Insurance and Investment has become an important part of our life. Although it’s wise to put a portion of the earning towards saving to secure you and your family’s future, many fails to distinguish between Insurance and Investment and they end up thinking both are the same things.
What Is Insurance?
Insurance is a contract that helps protect you from financial loss. It is a way to hedge your bets by providing you with some protection if something bad happens, insurance can help cover money issues that arise.
The perk of having insurance is that it helps you safe guard from financial disruption in unprecedented times. It covers up financially for the damage or loss you have suffered. Basically the main function of an insurance coverage is that it aids you with damage control to prevent land slide of your assists. You can also use as capital while investing in markets which passively boost the economy of the country.
What is Investment?
Investments are ways to make money off of your assets. You can invest in stocks, bonds, real estate, and many other types of investments. There are different types of investments including:
Stocks as Investment
These are shares of ownership in a company. If you own stock in a company, then you have a piece of that company. This means that you get a portion of their profits when they do well and you take a portion of their losses when they do poorly.
What Are Bonds
These are loans between investors and companies. Investors lend money to the companies and agree to take it back over time. Thus Investors receive interest payments for lending out their money.
Investing in Real Estate
Investing in real estate gives you the opportunity to live somewhere else without having to move. You can buy property and rent it out or use it yourself.
Gold as Investment Option
Gold is a valuable item that people collect. It is often bought and sold as jewelry or currency. Since its value is not likely to decrease, it becomes a good asset to invest in.
Insurance vs. Investment: Which one you should choose?
The answer is simple than you think actually. It is simply sum up to your needs. While Investments secures your near feature, Insurance takes care of your far future. But if you need expert advice than both are important for one’s life, you just have to create a balance and maintain it.
If you find this article useful then you much check our other important articles about managing financial assets.
- Financial Tips 2022
- How to Create a Budget in 6 Simple Steps
- Emergency Fund, What it Is and Why it Matters
- 5 Retirement Planning Steps to Take
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