Essays on Investiment Assignment

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Managing personal finance Introduction Managing my personal finances has always been challenging. When in college, the little that I used to earn was absorbed by my many expenses that were comparatively unforeseen and could hardly save any dollar to spend during my summer holiday when my financial needs were significantly high due to the need to engage in many social and leisure activities. This later proved to be a costly way of raising my money and was permanently in financial distress. This videos are very informative helped me to realize how to save, evaluate sources of dent when need arises, plan for my consumptions when in a family setting, build wealth and to invest in real property that would eventually earn interest.

Additionally, since the future is uncertain and the effects of risks are real, it greatly influenced me to take insurance covers to protect my life and my property as well as hedge against any disparaging movements in prices. 1. Savings The video candidly illustrate why one should save for their future lives and this saving culture should start early enough when one in college.

From the description, savings are deferred consumptions and it can be achieved through putting the money in deposit accounts, cash, and investment fund and pension accounts. A deposit account that pays interest can be used to hold money for meeting emergency needs and taking advantage of any speculation that might arise. 2. Budgets We should control the money that is in our hands. Financial discipline is essential in ensuring that we control our expenditures and effectively manage money. Apparently, the video holds that if we want to succeed in the currently competitive corporate world, we should create and live on budgets that are zero-based.

3. Debt Creditors give loan in exchange of a certain interest rate. Debts are expensive and we should strive to avoid debts. The collateral involved in debts makes debts unsecured for the debtor. We are supposed to avoid the trap of borrowing money, snowball our debts, since it is a future expense. 4. College student essentials College students have the tendency of consuming all that they have without bringing into picture the future that is awaiting them.

Students have to outgrow their personality and learn to spend money wisely. Money should not guide their careers but should rather decide on what they want to do with their lives. Small businesses are currently the mainstay of the economy. Students should understand how they will function in the market and find a company that would give them opportunity for personal growth and satisfaction and not necessarily monetary gains. 5. Family, friends, and philanthropy Money is a potential threat to relationships and a major cause of conflicts.

Money should be handled such that it does not contradict personal relationships or family matters. Generosity should be the driving force. 6. Consumer awareness We currently live in a world where advertisement is becoming rapid, numerous and dynamic and companies are striving to capture the consumers’ attention through millions of ads. Consumers should buy wisely by understanding the powerful marketing strategies and thwart the potential of being lured into inadvertent consumptions by the powerful adverts. Consumers need to be cognizant of their rights, acquainted with the pertinent information and regulate their choice to avoid misdirection by ads.

7. Bargains We engage in numerous transactions every day hence we should avoid paying excess by learning how to bargain or negotiate the best price that will ultimately leave the buyer as well as the seller satisfied. To get the best deal, one should negotiate deep discounts. Negotiation is a way of life and essentially leads to obtainment of best deals denoting that we make some savings by bargaining for the best price. 8. Credit bureaus Credit is becoming unavoidable in the current hard economic times.

The credit worthiness, determined through FICO, is an important aspect that affects an individual’s ability to access credit. In the score, 35% is based on debt history and 30% is based on debt level, 15% on length of time, 10% new credit and 10% on type of your debt. One should have a FICO score that is not too high or too low but should continuously evaluate the worthiness and of the credit. The principle of synergy bank consultation should be sustained. 9. Insurance Insurance helps us absorb blows that might occur and shield us against events or uncertainties that are potential crippling from a financial perspective.

It creates an emergency fund and a big umbrella to protect the insured. An insurance cover helps us transfer risks that we may not handle and premiums are paid to cater for the risks. It outlines seven types of insurance that every American should seek; life insurance, auto insurance, long-term care insurance, auto insurance, health, identity and renter’s insurance. 10. Investments Investing is for long-term goal expanding 5 years or more. The driving force in investment is interest, dividend earnings and capital appreciation.

Investments are subject to inflation risk. Investments in real property and securities help one to build wealth. Effective projects should be appraised using NPV method which takes into consideration the effect of time on money and change in economic conditions. 11. Retirement and savings plan. We start saving today so that we have enough even if our retirement comes earlier than expected. We must learn to be matured by learning to delay pleasure. One should save 8% of their income towards their retirement fund and 15% of household income be invested in projects that have a positive NPV.

Such an action creates a savings plan that is in the long-term exempted from taxation and the benefits are overwhelming. 12. Real estate Owning a home is challenging and might be hard to attain due financial constraints. Investment is real estates is a worthy undertaking considering the effects of inflation. Americans need to hedge against inflation by building, selling and buying real estates. However, it should be accompanied by title insurance which cushions against unclean deals and potential losses.

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