Akshaya Tritiya is a festival celebrated on a large scale in India, highlighting the beginning of a new start because it is believed that any new venture undertaken on this day is assured to gain wealth and prosperity and bring happiness in your life.
On the auspicious occasion of Akshaya Tritiya, which is going to be celebrated on May 7 in 2019, people generally buy gold because it is believed to be a sign of good luck for the buyer. But, is gold a good option to invest in today’s time?
Major Drawbacks of Investing in Gold
Here are some major drawbacks of physical gold investments:
Returns on Physical Gold are Poor
Selling gold jewelry never gives profits. The reason is that the price of gold jewelry is not determined only by gold rates but also includes making charges. In case of an emergency, if you want to sell the gold, the story changes completely. The making charges that you paid while purchasing the gold jewelry are not even considered and you get money only for pure gold, based on the gold rates of that day.
Storing Gold Safely Is an Issue
Nowadays, keeping gold at home or wearing it in public is like giving an open invitation to thieves to come and steal it. Even if you keep your gold in a bank locker, you cannot have access to it whenever you want; also, you have to pay maintenance charges to the bank.
Gold Fails to Give Steady and Regular Income
Generally, people invest in gold thinking that it will generate a steady and regular income for their retirement or will be a back-up option, but this does not work in reality, because you can invest in gold once and sell it once. There are no regular profits or pay-outs that flow into your pockets.
Gold Fails to Provide Liquidity
Whenever gold jewelry is purchased, there are various sentiments attached to it; therefore, when in need of money, these sentiments act as an obstacle and gold fails to provide liquidity.
Acknowledging the drawbacks of investing in gold, financial gurus suggest investing in insurance instead of gold. Let’s explore why.
Why Invest in Insurance Instead of Gold This Akshaya Tritiya?
The answer to this question, amazingly, lies in one of the legendary stories behind the festival of Akshaya Tritiya.
Sudama, a childhood friend of Lord Krishna, visits Him for some financial help. As was customary, Sudama (the guest) visits his host with an offering. In Sudama’s case, because he is very poor, he carries a bag of puffed rice (kurmura) to offer to Lord Krishna.
As the reader will recall, Sudama is so amazed at the hospitality of Lord Krishna to a poor man like him that he totally forgets to ask for financial support and comes back home empty-handed. However, Lord Krishna consumes three morsels of Sudama’s puffed rice (kurmura) when he offers it.
These three morsels that Lord Krishna consumes are returned to Sudama a thousand-fold when he returns home. The same is the case with insurance premiums and eventual pay-outs. A small sum paid as premiums return to the policyholder much, much larger due to the magic of compounding.
In today’s times, insurance plays the role of Lord Krishna, who will never let you down and become your financial support in bad times. This is because insurance instruments like investment plans and ULIPs have the capacity to change your fortune with guaranteed returns along with life cover.
How Do I Go on This Financial Journey?
Here is the roadmap for this financial journey towards wealth and security:
- Begin your journey by knowing your needs
- Set an investment objective based on your needs
- Invest according to your age, income, and family situation and dependencies on your salary
- Diversify your investments and get the protection you need
- Have limited but smart investments
- Get started and do not stop, patiently wait for your returns