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topic 6:unit 2 - Coggle Diagram
topic 6:unit 2
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A buyer must think about the following factors before deciding how much and why to purchase a financial product.Each person's product selection is influenced in part by their risk tolerance. This in turn depends in part on their age, their financial status, and their personality; it may also change depending on what stage of life they are in.
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no risk-free savings, loan or insurance product. One of the reasons why some people
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another.
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motor insurance if the car is new. There are two separate wants here: the want to buy a car and the want to protect it financially
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under the same heading (savings) but they fulfil different wants and needs and cover different time periods
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are legally required to have, such as motor insurance, or they might only insure large items: for everything else, they might prefer to carry the risk themselves.
A short-term plan could only last a single year. For instance, it could be a plan to set aside money each year for a summer vacation. As an alternative, you might establish a weekly or even monthly strategy to ensure you have enough money from
the weekly or monthly income needed to cover expenses during that time.
These goals can be accomplished in a few years. For example, if someone is saving money for a car, they may set away funds over a three-year period until the goal is accomplished However, it's possible that they'll soon begin setting aside money for other goals and hence there will be some overlap and a new medium-term plan; alternatively, this might start before the original plan ends.
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repaying out of their future income, but they cannot be sure that they will have
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the claims of a failed insurer, depending on whether the insurance is compulsory).
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