There are many misconceptions associated with personal finance that harm people. It is beneficial to know about them. Many people are victims of them. This makes them harm themselves. Some people believe that even after retirement, they can buy insurance. Some find it very safe to keep money in government schemes. Many find a expensive deal to buy health insurance. These are just a few examples, their list is long. We are telling you about four such big misunderstandings.
1. Insurance is necessary even at an older age
Many people do not know the true meaning of insurance. Some feel that this is a saving instrument. Many people feel that it can be purchased at any age. The reality is that there is no insurance saving instrument. If you are also using it for saving then you are doing your harm. The purpose of insurance is to provide security. It gives financial security to your family. Therefore, it needs more during the time when all your responsibilities are not fulfilled. It includes children’s education, their marriage addicts. Once these responsibilities are fulfilled, you become financially free.
2. Home loan can be taken after retirement
Home loan helps you buy a house. If you do not have much money lump sum, then you can buy a house by taking a home loan. Then every month you can repay that money and interest on it through EMI. In this way your home loan ends in 15-20 years. Therefore, it is important that you should take a home loan as soon as possible after getting a job. This gives you more time to repay it. Banks also check your income source before giving home loans. Therefore, taking a home loan at an older age does not mean.
3. My money is safe in government scheme
Many people feel that money should be kept in the government scheme, because it is the safest. Such people do not care about the returns received on money. Such thinking is not right. Actually, due to inflation, the value of your money continuously decreases. Therefore, if your money returns are not enough, then understand that the value of your money is decreasing rather than increasing. The more safe as the government banks are, the stronger private banks are also safe. Schemes of companies like mutual funds are also safe. Therefore, it is smart to earn good returns by keeping money in them.
4. I can take reverse mortgage facility at my home
This is a way the opposite situation of the home loan. In this, you can sell your house in advances and run your expenses from the income from it. The bank buys your house and pays you installment every month. The special thing is that you get income every month while staying in your house. However, this should be the last option of the person. If you have a wife and children, then you should not take a reverse mortgage facility. The house is a big asset, which will be used for your wife and children.
