The Finatical
Week of April 26th, 2022 - Car Insurance, The War in Ukraine’s Impact on Global Energy, Climate, and Food, Investing in 2022
Topic Breakdown - Car Insurance
Having car insurance is mandatory in every US state except for one, but many people still don’t understand how car insurance works, the financial benefits of paying for car insurance, or how to get the best insurance rates. This is what we will be discussing in today’s article.
Introduction
Firstly, there are some basic components of a car insurance plan that everyone should be familiar with. The “premium” is just the amount of money you pay for your insurance. For example, you might pay your insurance premium every month or twice a year. Another term is the “deductible.” This just refers to the amount of money you have to pay by yourself before your insurance pays. Basically, if your insurance plan has a $1000 deductible and $3,000 in damage from a covered accident. Your insurer will pay $2000 to repair your car, and you'll be responsible for the remaining $1000. Due to this, your insurance premium will be higher if you get a lower deductible. There are also different types of insurance plans that cover different things, but the required elements are different in every state. Now let’s talk about the factors that affect your insurance premium. The first one is the type of vehicle you drive. You may already know that a sports car costs more to insure than a family SUV. The number of miles you drive can also affect your insurance premium. Your rates may rise if you commute longer since you are more likely to be involved in an accident. The insurance company will also check your driving record. If you have been involved in accidents before, your rates will be higher. Insurance premiums can also be affected by age, and other demographic info.
Advantages
Insurance does cost a lot of money, but you may benefit financially if you have it. The advantages of having automobile insurance are numerous, especially if you are involved in an accident. You have to pay for losses out of pocket if you do not have insurance, and you’ll need to deal with the aftermath on your own. If you cause an automobile accident, you may be held liable for any resulting expenses. This includes legal costs, medical bills, and general damages. You would most likely have to pay for these charges out of pocket if you did not have certain forms of coverage. In addition, if your car is destroyed, the insurance will cover the expense of replacing or repairing it. In the long run, having car insurance will give you a better sense of security when driving and could come in handy in the case of an accident.
Getting the Best Rates
Finally, we will be going over how to get the best insurance rates. Firstly, it is critical not to assume that one company is the cheapest. This is due to the fact that no single insurer is the low-cost leader for everyone. The cheapest vehicle insurance provider for someone in one location may be the most costly alternative for a driver in another state, so make sure you shop around thoroughly. Also, make sure that you ask about discounts, because the seller may not inform you of them otherwise. Aside from this, raise your credit score and drive safely. Getting in an accident could raise your premium. Lastly, increase your deductible. Increasing the amount you pay out of pocket can decrease your insurance premium.
Financial Trends
The War in Ukraine’s Impact on Global Energy, Climate, and Food
Due to Russia’s unprovoked invasion of Ukraine, it has resulted in the markets and geopolitics of energy, driving oil, and gas prices reaching their highest level of cost in over a decade. This has also led to forcing many nations around the world to reconsider their energy supplies. According to a report by the International Energy Agency, Russia is the world’s largest oil exporter to global markets, and the natural gas fuels is what boosts the European economy. As a retaliation to Russia for its unprovoked invasion, the U.S. and the European Union have imposed economic sanctions on Russia, however as Russia continues to be at war with Ukraine, its gas and oil are still being exported to Western nations.
This war has been a cause of serious concern for nation leaders around the world, especially with their energy plans because of the number of issues the war brings to each nation. These issues range from food crises to reducing greenhouse-gas emissions. The biggest issue out of all the issues that world leaders are currently facing is the issue of its heavy dependence on Russia for energy. President Joe Biden of the U.S. continues to pledge for sending more liquified natural gas to Europe and the European commission is looking to replace 101.5 billion cubic meters of Russian gas by the end of the year
Learning about Alternatives, Volatility, and Inflation for Investing in 2022
There has been a recent interest for investors finding and adding alternative investments to their portfolios. According to a report by Moody’s Investor Service, assets that were under management for alternative investments surpassed $9 trillion in 2021. A strategy for all investors is to diversify their investment portfolio and a great way to diversify one's portfolio is by adding alternative investments. Some ways that investors invest in alternative investments include using ones’ individual retirement account (IRA) to invest in alternatives, private equity, venture capitals, farmland, etc. Based on the data from a report by Motley Fool, it has been proven that alternative asset classes outperformed the return of the S&P 500.
Alternative investments work like a hedge against stock market volatility, however the amount of volatility varies among different asset classes. It is essential for investors to be aware that the rates of return for alternative investments are extremely volatile like cryptocurrency. Another reason for alternative investments being so volatile is due to the inflation that is going throughout the world, and has resulted in a lot of investors investing in the alternative investment of farmlands, as they have a low correlation to stocks and have the possibility to generate a steady profit over time. Another thing for investors to take into account when deciding to invest in alternatives are prohibited transactions. Since portfolio volatility depends on the amount of money an investors allocates to each asset, it is necessary for them not to make prohibited transactions.
Financial Guidance
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful." - Warren Buffett
Success in the stock market doesn’t come from following the masses; it comes from being able to deviate from what the masses do in order to set yourself apart. When rational, there is nothing wrong with following others in their financial decisions. However, don’t be afraid to make decisions that go against the masses.
Money Fact
Living presidents are banned from being printed on money. This rule was established in order to make sure that the US would not appear to be a monarchy.