Life Necessities That You Should and Shouldn’t Invest In
There are certain life necessities that you should not overlook. However, there are also life “necessities” you don’t really need to invest in, and in some cases, shouldn’t even think about it.
Life Insurance
One of the most obvious of life’s necessities is life insurance. However, you don’t necessarily need to invest in it. Investing in life insurance is frowned upon by some financial experts because the combination of investments and life insurance means that you are not getting as much as you could out of either of them. This can lead to the payout from your life insurance not being enough to support the loved ones you leave behind. In that case, you having invested in life insurance may not have been the best idea. An additional type of life insurance that could be worth investing in if you are a business owner is key person insurance. This is like life insurance for key employees and provides coverage that will protect a business in the case of their untimely death or disability. It can bring peace of mind to the business owner knowing that they are financially covered and the business can continue in the event of the loss of a key employee.
Universal/Variable Life Insurance Policies
If you do decide that you want to invest in life insurance, financial experts advise you to say no to a variable or universal life insurance policy. Many people are lured into the idea of obtaining universal or variable policies because they assume life insurance is a necessity and that these two options are the better choice. When you do purchase one of these types of life insurance, the premium you pay is dispersed to the policy itself, while some of the money goes into investments and the rest of it goes into fees, which can be rather high. You also end up paying fees to the insurer to cover investments and the operating costs of the investment company. This means that if you own mutual funds within an insurance policy, it will cost you more than it would if you owed them to an investment firm instead.
Investing In The Stock Market
The financial experts at The Motley Crew advise you to invest in the stock market. Starting with an investment of as little as $2,000 can net you over $34,000 through the course of the next 30 years if you get as little as a 10% return. Even if you invest as little as $100 you could turn that investment into $9,540 within 10 years. While that is not a fortune, it is still a chunk of change many people would appreciate these days.
Employer Match
We all have an income, and for many of us, we need to stretch that income as much as possible. One-way to do this is to participate in your company’s 410K matching program. Many people overlook this as a life necessity, but the truth is, it can be one of your most valuable resources for building the savings you will live off of during your golden years.
Invest In Staple Items There are certain staples we all need in life. Food, water, and to a lesser extent, clothing, are all essential items. The Consumer Staples Select Sector SPDR allows you to invest in staple items through one investment purchase.
Ultimately, only you can decide if you should or should not invest in certain life necessities that are based on your financial standing.
