3 Practical Ways to Invest for Your Loved Ones
finance and productivity | Wednesday, 21 Jun 2017
Of all the ways to show your loved ones how much you care, securing their financial future is the most practical thing you can do for them. But where do you start? Here are three steps you can take to secure the future of those you care about.
Start an emergency fund
When it comes to preparing for your loved one’s future, there is no better time to start than now. Let’s face it – inflation is an inevitable phenomenon that happens whether you like it or not. Medical expenses, education costs and cost of living are expected to rise significantly in the coming years. For instance, the chart below shows the estimated cost of education in the future.
With so much to worry about already, the last thing you need is a financial dilemma to come along your way!
Set aside an emergency fund to help you and your loved ones cope with rainy days or unexpected events. This emergency savings should be kept fairly liquid so that you can easily have cash on hand when you are hit by a major expense. For a start, make it a habit to contribute regularly towards it.
Invest in unit trusts
Unit trusts are investment funds which pool your money with that of other investors. These are managed by professional fund managers who will invest the fund’s assets in different portfolios with the aim of growing it collectively.
Although you would have to pay a sales charge and annual management fee, investing in unit trusts has lower investment risk than stocks. Your assets will be managed by a team of analysts and held by a trustee, who controls the fund. Unit trusts can also be redeemed by part or in full.
However, it would still be worth doing research and getting several opinions to determine the right unit trusts to invest in. Whether the funds are placed into bonds, equities or the money market, each comes with different risk levels. More aggressive funds may lead to higher returns but may result in losses when the market reaches a slump. Avoid high-risk unit trusts in a volatile or uncertain economy and be sure to get several opinions for a well-rounded understanding about how the funds are invested before making a decision.
By investing in unit trusts with or on behalf of your loved ones at an earlier date, they can benefit from better compound interest in the future.
Find the right insurance plan
There are many kinds of plans in the market to suit different requirements. Investing in life insurance ensures that you and your family members are protected throughout the coverage term. If anything should happen to you, your beneficiaries would not be left with financial worries.
For example, you can put your loved one under a comprehensive medical plan which allows him or her to gain access to quality healthcare in times of emergencies, with less financial burden. You can complement this with a critical illness insurance which covers 36 critical illnesses, including heart disease, cancer, stroke and kidney failure.
Home insurance coverage protects your home and family against potential damages or losses. When you and your loved one are on holiday, a travel insurance would leave you at greater ease wherever you go. There are also plenty of life insurance coverages with different payment modes and benefits to suit your requirements.
Finding the right insurance is very much like finding the right relationship – it’s about understanding what you are getting into before committing and having something you can depend on for a safeguarded future.
To find the right plan for your loved one, ask our advisors about our different policies and saving plans at Allianz. Call 1 300 88 1028, drop us an email at email@example.com or contact us via Facebook live chat.
1. Study Malaysia Handbook & www.studymalaysia.com
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