Introduction to Wealth Creation
- Want to pursue higher education?
- Want to provide your kids with the best education?
- Want to take care of your ailing parents?
- Want to prepare a stress-free and financially stable haven for loved ones?
- Want to enjoy a blissful post-retirement life?
And the list could go on because once you start earning, life is all about accomplishing childhood and possibly practical dreams, wishes, and desires.
Many say that money cannot buy happiness but is it true?
This statement is partially true because you require money to fulfill worldly dreams and desires. It is where you need savings.
It is never too early to encourage long-term savings.Ron Lewis
I started thinking about savings from 17 because my parents tried to meet both ends to fulfill my wishes. They exhausted themselves to save so that they could spend it on me. Therefore, I understand the importance of savings and investments.
This blog will guide you in understanding:
- What are the best steps to wealth creation?
- At what age should one consider wealth creation and savings?
- What is the one mandate that one needs to have in their kitty?
Life has always been about struggle, uncertainties, and short-lived happy clouds. Though there are multiple life-related hardships, this blog will pave the way for you to understand the importance of balanced finance hygiene one needs to maintain.
What are the Ways to Wealth Creation?
Every coin has two sides; similarly, there are both good and bad ways for wealth creation. Some of the best and safest ways to wealth creation are as follows:
- Life Insurance: You can call it a ‘safety net for your loved ones.’ Having life insurance at the right age is as important as owning a pair of denim. There are different types of life insurance in the market for many people with different needs. Possessing life insurance not only gives your family death benefits but also has other additional benefits.
- Having Different Means of Income: When you are young, you can shine bright like a diamond and multitask. You can be a content writer, photographer, and editor. You can either be a full-time job doer or freelancer, or both. When young energy is utilized in the right place, they pave the way for better earning.
- Wise Investment: Some say that one should SAVE. And, save in their dictionary is to earn and lock it in the bank. It is a savings but a passive one. It is where wise investments come into play, where you can invest your money and have your stakes in different brands.
- Watch Out for Your Lifestyle Expenses: If Mark Zukerberg had dressed according to his earnings, he would have drenched himself in valuables, but have you ever seen him like that? No. Living a minimalist life is holistic, especially if you want to build wealth. Entering the Apple environment, having a luxurious villa, owning a Rado can wait. Save rather than repent.
- If you are a Businessman, then Understand the Trend and Work: While building your business to earn more, you should devise your business according to the latest trends and proper marketing.
- Plan It Before Life Leaves You Stumped: Planning is the essence of everything. Until you plan and research, you cannot accomplish your financial goals rightly.
The entire game is doing smart work and not only hard work.
Life insurance is one of the most secure and mandatory life jackets one should own because life is never a bed of roses for everyone.
Life insurance is where the policyholder invests in a particular type of life insurance (based on one’s tailored needs) and pays premiums to the insurer/insurance company.
The true benefit of life insurance is seen when the policyholder meets with an unfortunate death, accident (total or partial disability), or chronic illness. The insurer will pay a lump sum to the nominee (decided by the policyholder).
Therefore, there are different types of life insurance in the Indian market, and they are as follows:
- Term Insurance
- Endowment Policy
- Child Insurance
- Health Insurance
- Money-Back Insurance Policy
- Unit Linked Insurance Plans (ULIP)
- Retirement Insurance Policy
All these types of life insurance are tailored to different kinds of audiences based on their income and needs.
Many assume that life insurance is limited to death benefits, is it?
Life insurance is beyond death benefits, and they are as follows:
- Maturity Benefit
- A haven free from tax (if you pay your premiums rightly)
- Coverage for certain vulnerabilities
- Side support for loan
- Savings plan
There are multiple life insurances available in the market; I have filtered out the best life insurance policies that you can use for your wealth creation, and they are as follows:
Aditya Birla Sun Life Insurance DigiShield Plan
If you wish to have an inclusive plan that could safeguard multiple needs per your life situation, this could be possibly a beneficial Plan for the long term. In the ABSLI world, this term insurance plan is known as the ‘Sabka Vala Term Plan.’
It comes with 10 Plan Options, and you can choose as per your requirements. But, read through carefully.
- Level Cover Option
- Increasing Cover Option
- Sum Assured Reduction Option
- Whole Life Option (Level Cover)
- Whole Life Option (Sum Assured Reduction Cover)
- Income Benefit
- Level Cover plus Income Benefit
- Low Cover Option
- Level Cover with Survival Benefit
- Return of Premium (ROP)
The benefits of this Policy are as follows:
- The day you hit adulthood, you are eligible to own this comprehensive plan. This term insurance plan shall have your back even if you hit a century.
- By Almighty’s grace, if you reach the age of 60, then you receive monthly survival benefits. No more relying on others when your suitable investment could pay you back when you need it the most.
- The death benefits might be paid out in monthly payments, lump amounts, or both. Read through the plan option you have opted for.
- Terminal Illness Benefit: For instance, you are diagnosed with a critical illness like cancer. It is when you need money the most and where your term insurance comes into play. When the Policy is active, you will receive a lump-sum payment of 50% of the applicable amount assured on death, up to a maximum of Rs. 2 crores, and all future premiums will be canceled.
- Survival Benefit: This advantageous feature ensures that a monthly business Survival Benefit of 0.12% of the sum assured is paid beginning with the first Policy month anniversary following the occurrence and continuing until the Policy term expires or the life Insured dies (always refer to the Plan Option that you have chosen).
- Death Benefit: If the policyholder faces an untimely death when the term is active, the death benefit will be paid to the nominee (s)/legal heir(s) as chosen by the policyholder.
Aditya Birla Sun Life Insurance Fortune Elite Plan:
This Unit Linked Insurance Plan by ABSLI is a valuable tool that could help with wealth assurance and enhancement.
- It provides the policyholder with three investment options based on their investment needs and financial capacity.
- It offers a flexible mode of paying the premium terms.
- Allows partial withdrawals.
The Three Types of Investment Options Given by Them are as Follows:
- Systematic Transfer Option
- Return Optimiser Option
- Self-Managed Option
Choosing the right path might be difficult, but investing your money at the right place would ensure a return on investment (ROI). It is always beneficial to contact your financial advisor to know better which life insurance plan you should buy and the possible impact of your investment.