We come across various insurance terminologies while buying insurance. Listed are a few terms which are commonly present in the policy document. Insurance Means to manage financial risk in the form of compensation. It transfers risk from one person to a group. Insurance contract A contract between two parties in which one party (insurance
Assets are of two types. Buildings, land, paintings, gold etc. are physical assets. You can feel and touch them. Shares, debentures, mutual funds, fixed deposits, and bank accounts are all financial assets. Asset allocation is the ratio in which you invest in the assets mentioned above. Why asset allocation? The above graph compares the
Every individual dreams of owning a house one day. For many, this is the ultimate goal. It is an investment of a lifetime. Some want to leave a legacy behind, an estate for their kin. A person buys a house either for own consumption, that is, to live in and utilize the house or
Ravi wants to buy a property. He wants to know if he can afford it. What information does he need? His net worth! Radha wants to make a financial plan. She wants to plan her future investments and goals. What extra information does she need to do so? Holdings and liabilities, that is, her
Now that we have an answer to the question “What are mutual funds?“, we will look at some commonly used terms that we come across daily while looking for investments in mutual funds. AMC – Asset management company An AMC is responsible for the day to day management of schemes of mutual funds. It
We usually take a loan when we want to buy something worth more than what we can afford. It can be a house, land, or a vehicle. We also take a loan to pay for our education or to invest in business. What are the various types of loans? There are various types of
You throw a birthday party for your spouse and invite all your friends over. As a part of the party games, you set up a Tambola/Housie board. Each person contributes 10 rupees to buy a Tambola ticket. The amount collected is the prize for the winner. The game is simple. Each ticket has 15
You decide to invest. The share prices or bond prices may fluctuate. The banks may go bankrupt, gold price may fall. In each case, your investment may suffer. As an investor, one should never solely depend on a single financial instrument to give secure returns, may it be shares of a company, bonds, or
What are life goals? I want to travel around the world! My dream is to have a big house by the sea! I want kids! I want to help the homeless! My aim is to have a comfortable retirement! What are financial goals? I want to go on an international vacation costing ₹ 2
SIP is a method of investing in mutual funds where you invest a fixed amount periodically (weekly/monthly/quarterly/semi-annually) irrespective of market conditions at that time. Advantages of SIP Discipline Would you get up one day and decide to run a marathon? You will need the discipline to practice every day for months and improve your