Essay On Smart Money

Daily economic activities have an important influence on personal financial planning. In our society, the forces of supply and demand play an important role in setting prices. Economics is the study of how wealth is created and distributed. By doing my research, I found that each economic situation would affect me at a personal level.

Whew, where to start? The personal finance class through Dame Ramsey’s Foundations in Personal Finance textbook and video series really had a lot of useful information, and it is hard to pick out the most impactful chapters and topics. However, I think the most important stuff for me was his five foundations for financial success, which were reinforced throughout the course. I am not downplaying the other important stuff in the course, including learning about the history of credit, budgeting, consumer awareness, investing, insurance, and taxes, but I think that mastering the fundamentals is important, which is why I am choosing to highlight them in this paper.

The return on a stock investment comes from dividends and price appreciation. Although neither is guaranteed, both have the potential for growth in the future. This is in distinct contrast to investments in debt vehicles that guarantee future payments but offer little or no possibility of a return that 's higher than promised.

An investor would invest in a security for the return. However that return comes with a premium, the Risk. The higher the risk an investor is willing to take the higher the returns would

The term 401 (k) is one that is heard quite often in today's. Most people know that it has something to do with retirement, but few young people know exactly how 401 (k) plans work or why they are becoming more and more popular. Additionally, many people who have 401 (k) plans may not know all the details of how they work, how to get the most out of their plan, and how to keep their money safe. In reality, everyone in the business world should be aware of the details and advantages of having and managing a 401 (k) type savings plan, as it is becoming one of the most popular ways to save for retirement in the United States and many other countries.

This course provides an overview of the elements necessary for effective personal financial planning and the opportunity to apply the techniques and strategies essential to this understanding. Primary areas of study include creating and managing a personal budget, understanding and paying taxes, working with financial institutions, wise use of credit cards and consumer loans, financing automobiles and homes, and the use of insurance for protecting one’s family and property.

To be successful it is important to look ahead to the future. The future is very important to thing about for many reasons. To be well off in the future its good to know about money, and what a person does with it. People should put it in retirement plans and such things because a person has to think to their self if they want to live comfortably like they do now.

The, best known as IRAs for its acronym in English (Individual Retirement Accounts), individual retirement accounts are a good option to consider when planning for retirement, since these are savings accounts with attractive tax advantages. These accounts are recommended if your employer does not offer any retirement plan like a 401 (k), or if you want to have an additional plan to save more for your retirement.

Herbert A. Simon, a Nobel laureate, suggested that a decision maker did not always make the best financial decision because of limited educational resources and personal inclinations. Because of this, we seek the advice of others to make better financial decisions. In David’s Chiltons The Wealthy Barber Returns, he explains why saving first, spending less, and investing your money now will help secure your financial future. In my opinion, the advice he gives are simple but well founded. After reading this book, I will put my credit/debit cards in the freezer, set up an automatic savings plan with Tangerine, and invest 5% of my pre-tax income. Even though you are probably confused as to why I’m doing this, hopefully everything will be clear

Economic knowledge is very important to have, especially in modern America. Dave Ramsey, a speaker, and guide for the public helps better educate on the importance of money and how it works. From a series of videos by Dave Ramsey, he brought to my attention a few important parts of saving. One of them is to always pay with cash. Another being avoiding acceptance of loans. Lastly, Ramsey hammered in the idea of always looking for opportunities to save money. These three points stood out to be most important to me.

The stock market is a risky business. Investing can make you wealthy beyond your wildest dreams, in which only a few investors have found the formula. Otherwise making the wrong decision

When people are asked how people will plan or rethink for retirement, the first thing that people will think about, is saving. There are some positive ways to save money, the author suggests to the readers to sign up for 401(k) plan. It is a plan help employees save for retirement, 401(k) should allow anyone to build up a nice nest egg. For example, “In Dave Ramsey’s The Total Money Makeover, for instance, he gives us “Joe and Suzy Average” who invest $7,500 per year ($625 per month) using their tax-free retirement account. They do this from age 30 to 70, getting 12 percent interest per year. At the end, they have $7,588,545 to their names.” When people invest in 401(k) plan, it is safer and more money in retirement and it also has a benefit that you don’t need to pay for tax when you take the money out. Beside 401(k), people prefer to invest money in the stock market for retirement-plan. According to author “ During a recent 40- year period,

Money is a precious thing and it can become challenging to not spend it immediately after getting it. It is crucial that this does not happen. There is no denying that money is an important part of society. The world revolves around money and without it, one? would not be able to function. In everyday life the average household will spend one hundred and sixty dollars daily. It is safe to say that money is an resource used daily. It is a tool that can be used to connect with other people or buy anything a person could want or need. Yet it is easy to spend money without realizing how much is really being spent. With only a few simple tips it will become much easier to save money instead of spending it on frivolous things. One’s hard-earned dollar should be saved, and simple tips such as using cash instead of cards, saving small change and only purchasing what one really needs are a few of many ways of doing this. The power of money can easily be abused and it is very important to make sure that a person is well informed on ways to save and spend money wisely.

Stocks (or shares), by definition, are shares of ownership in a company. By purchasing stocks in a company, the investor becomes a part owner, and thereby owns a percentage share of the company’s after tax profits. Stocks/shares have two key characteristics: 1) they can be issued in small denominations: an investor can purchase as many or as few shares in a company as he/ she wants, thereby becoming a

Gittman (2004, pp. 312) divided stock into two types, such as common stock and preferred stock. He also showed that dividends are the outcome of investment. So, common stocks are an ownership claim against primarily real or productive asset (Higgins, 1995), but he also said that if the company prospers, stockholders are the chief beneficiaries, if it falters, they are the chief losers. Smith (1988) presented that stocks are one of the most popular forms of investment. People buy stocks for various reasons: some are interested in the long-term growth of their investment by buying low priced stock of a new company in the hope of substantially growth of share price over the next few years. Another reason he suggested that in a well established firm stockholders expect the stock growth will be stable over the long run. (Smith,1988).