Join Jane Barratt for an in-depth discussion in this video Insurance products, part of Personal Investing Basics.
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- In the world of investing, the basic…building blocks are cash and equivalents,…stocks, bonds, funds, and insurance.…It seems the odd one out is insurance products,…but bear with me.…Insurance is much more than just…what you buy to cover your car, house, or life.…There are insurance products that have…all the dimensions of an investment product,…and should be considered as such.…First, most types of insurance are an…expense, not an investment.…You pay a premium to get the insurance,…and often in excess if you use it.…
For example, you may pay 1,500 dollars…a year to ensure your car, and if you get…into an accident, you may have to pay…the first 500 dollars of costs,…but the insurance company will pay the rest.…It's pretty straightforward, right?…The insurance company decides how risky…you are to insure, and they do a whole…lot of math called underwriting,…on how much you should pay.…The essence of underwriting is the same…with insurance based investment products.…The two main products we'll cover are…whole life insurance and annuities.…
Jane is the founder of GoldBean, an online investing platform that helps first-time and experienced investors alike take their investments into their own hands. In this course, she shares her investment strategies with you. She breaks down the market into its five basic building blocks—cash and equivalents, stocks, bonds, funds, and insurance products—and the different vehicles where you can invest these building blocks. She also covers topics such as the importance of a balanced portfolio, understanding and managing your risk, identifying value in the market, and building your "money muscles" over time. Plus, learn how to calculate the rate of return of a portfolio vs. general market performance. Last, Jane outlines the options for DIY investing, when it makes sense to work with an advisor, and how to avoid costly investment fees.
- Why should you invest?
- Understanding compound interest
- Comparing stocks, bonds, and funds
- Managing risk
- Building a portfolio
- Finding where to invest money
- Working with a financial advisor