When you want to reach financial freedom, then you need to prioritize emergency funds, insurance, and investments. Despite the importance of all three, you still have to be observant and careful in prioritizing financial needs. Government Bonds can be the suitable choice of financial instruments in managing emergency funds, insurance, and investments.
Differences between Emergency Funds, Insurance, and Investments
Basically, emergency funds, insurance, and investment are three things that are equally important. However, if you take the wrong step when prioritizing things that can still be postponed, then it can greatly disrupt your financial health. Therefore, make sure to prioritize the most important thing first.
- Emergency Fund as the Main Foundation
As the name implies, an emergency fund is a fund that you can use in uncertain or unexpected situations and conditions. Having an emergency fund is crucial.
The reason is, no one can be sure when they need money in an emergency. Whether it's when covering accident costs, vehicle repair costs or home repair costs.
Because an emergency is a condition that can occur anytime and anywhere, naturally many financial experts recommend prioritizing emergency funds first compared to other needs funds. Some investors are also preparing their emergency funds by buying Government Bonds.
- Insurance
If you already have an emergency fund, proceed to the next priority, namely insurance. Among the many insurance options, make sure to prioritize health insurance. The presence of health insurance is very important in order to avoid bigger expenses in the future.
When you are hospitalized, for example, your health insurance can minimize and even cover the various costs that must be paid. Of course, the cost of medical treatment sometimes requires very large funds.
If you already have a health insurance in hand, all costs incurred can be covered by health insurance.
For those of you with a steady income, having health insurance is easy. Set aside your monthly income regularly to pay for health insurance premiums. Allocate at least 10 percent of your salary for health insurance needs.
- Investment
When you decide to start investing, you must know the various risks that will be faced. However, before setting aside some of the funds you have for investing, be sure to meet the needs of your emergency fund and insurance fund first.
You need to know that finances can be disrupted when you take the wrong steps to prioritize. Avoid simply following people who have been involved in the investment world and then ignore meeting the needs of emergency funds and insurance.
When compared to skydiving as an analogy, you need to fasten your seat belt and parachute first. Seat belts can be likened to an emergency fund and parachutes are health insurance.
When you try to skydive without preparing a reliable safety belt and parachute beforehand, you will be in a risky situation.
Disturbed financial conditions will of course affect various daily activities. You can’t meet the needs of emergency funds and insurance if all the funds you have are allocated to investments.
Therefore, avoid getting into various investment instruments if you don't have enough emergency funds and insurance funds.
Conversely, when your emergency fund and insurance are safely under control, then move on to the next step, which is investing. Avoid investing just to follow the trend alone.
Make sure to have clear and specific goals when investing. For example, for the preparation of retirement funds, education funds, or funds to buy a dream vehicle.
Currently, there are many choices of investment product instruments that you can choose from. Starting from stocks, Money Market Mutual Funds, Fixed Income Mutual Funds, Balanced Mutual Funds, Equity Mutual Funds, to Government Bonds. Choose an investment instrument that suits your needs and financial goals.
Manage Finance with Government Bonds
Among the many investment instruments, investing through Government Bonds can be the most suitable strategy. In fact, some investors also invest regularly in Bond instruments for their emergency fund, insurance, and investment needs.
Because Bonds are securities issued by the government, many people feel safer and more comfortable investing in them. Here are some reasons why you can make Government Bonds as an investment strategy now.
- Relatively Low Risk
When compared to other types of instruments, Government Bonds are considered to have relatively lower risk. The coupon payment system has also been guaranteed in the law.
- Higher Profit Potential
Another advantage of investing in Bonds issued by the government is the potential for higher profit values when compared to Fixed Deposits. In general, coupons for Government Bonds are higher than Fixed Deposit rates.
- Easy To Get Started
Investing through Bonds is basically not a difficult thing. Currently, various banks have provided digital applications to make it easier for investors when investing, including when they want to invest in Government Bond instruments.
In addition, the initial capital is not too large. With only one million rupiah, you can already invest in this instrument. The greater the investment capital owned, the greater the profit potential will be.
Purchase Government Bonds with DBS Treasures
You don't need to be confused when you want to start investing in Government Bond instruments. DBS Treasures priority banking can be the suitable reference to allocate some of your funds for investment. Following are some of the advantages of Government Bonds from DBS Treasures.
- Regular Coupons
Provides regular income in the form of coupons which are paid regularly during the investment period by the Bond issuer.
- Capital Gain Potential
Several types of Bonds can be sold at any time before maturity and gain potential profits from rising Bond prices.
- Competitive Coupons
Provides a competitive coupon rate above the average Fixed Deposit interest.
- No Additional Fees
Only the spread or the difference between the selling price and the buying price (bid and offer).
- 24/7 Transaction
There are a variety of Bond products that can be traded on the digibank by DBS Application.
You will be supported by curated market analysis communicated by a team of financial experts. Get the latest opportunities that have been adjusted to your risk profile and portfolio needs, driven by Artificial Intelligence/Machine Learning (AI-ML).
This insight is equipped with curated solutions related to investment (Grow) and insurance (Protect), so you can quickly and confidently invest through your preferred media.
Manage your emergency funds, insurance funds and investment funds by investing through Government Bonds with DBS Treasures right now. You can find more information here.
