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Investing in My Future By FIN100: Principles of Finance Dr. Cecily Anthony June 13, 2021
Summary Financial principles are essential for everyone, both in personal and professional life. This course has shed light on the opportunities that investing in the stock market could provide. I am challenged to learn more about the stock market and understand how I can invest and the terms of returns. My new financial goals include saving before spending. I have not taken this seriously, but I now know that it is essential to save before you spend because the accumulated, saved money can be used to make lucrative investments. I want to be more liquid because this will not only mean that I have a variety of assets, but it will also mean that I have a source of funds in case of emergencies. Saving for retirement and starting a new business are also part of my goals for the future. 2
Investing in My Future Introduction Investing in my future is something that I always think about. At an old age, I would like to live a comfortable life. Hence, my financial choices in the present time are crucial because if I do not make the right choices, I might end up not living the life I want. Many people usually wait until they are in their late 30s to begin thinking about investment and retirement (Berrospi, 2020). However, this is not always the best option because a solid financial presence is built over time. The sooner you identify opportunities for financial growth, the higher the chances are of financial freedom (SEC, n.d.). I have gathered enough financial knowledge to determine how I will invest in my future and identified the challenges I expect with my investment. These are goals that I need to work on from now so that I can enjoy the returns at a future date. Three (3) Ways I will Invest in My Future The three ways I will invest in my future include stock market education, tax saving, and emergency saving. One of the most crucial things that I have learned from this course is the stock market. Before this course, I was interested in the market, but I was always too scared to consider investing based on other people’s experiences of losses. Continuous stock market education will enable me to learn more about the market and have confidence in investing (Berrospi, 2020 ) . Hence, even when the stock market experiences a dip, I will make informed decisions and continue my investments rather than quitting. Investing in the stock market as early as now will give me the discipline and commitment of a long-term investor and contribute to my successful financial life in the future (Berrospi, 2020). 3
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I will also invest in my future through tax savings. This is an area I feel that most people overlook, but it is possible to optimize my taxes to reduce my tax bill. I can seek the advice of an accountant on the best way to do this. A reduced tax bill means more income, allowing me to save more (Berrospi, 2020). The third way I will invest in my future is by setting up an emergency fund. People experience financial hurdles because they use their personal savings to cover emergencies such as medical emergencies (SEC, n.d.). By setting up an accessible emergency fund, I will ensure that I have available resources in case of emergencies. Therefore, I will not need to use my personal savings, which might land me in a bad financial position. My Confidence Concerning Investing in My Future I feel most confident in tax saving. Optimizing my taxes is something that will come at no risk and that I can have continuous control over. Also, if I seek the advice of an accountant or tax advisor, I am likely to be successful in optimizing my taxes, thus reducing my tax bill. This will increase my net income, and I can use the surplus funds for investments and savings. Hence, my confidence in tax saving is high as it comes with less risk and is more controllable. Challenges with Investing in My Future Of the three ways I will invest in my future, I perceive investing in the stock market to be the most challenging. There is a lot of information regarding the stock market, so it might be challenging to find the right source with truthful information (Beattie, 2020). I can overcome this challenge by getting a mentor who is already investing in the market to guide me on the sources of information I should use. Also, as a new investor, I am likely to make the wrong choices or get overcome by greed when the 4
market is doing too well. I can overcome this challenge by setting an investment plan and sticking to it. When the market changes, I can evaluate my investments and decide which stocks to hold without making a rushed and emotionally driven decision (Beattie, 2020). Conclusion While it might sound easy on paper, investing in the future can be a long and challenging process. Hence, it is crucial to set clear goals and draw out a path for achieving these goals. I will use the financial principles I have learned from this course to make informed decisions, and I look forward to a fruitful future, especially as a stock market investor. 5
Sources (3 sources) SEC. (n.d.). Ten things to consider before you make investing decisions . https://www.sec.gov/investor/pubs/tenthingstoconsider.htm Beattie, A. (2020, September 7). The challenges of investing in a modern world . Investopedia. https://www.investopedia.com/articles/basics/12/challenges- investing-modern-world.asp Berrospi, G. (2020, September 24). Five Ways To Invest In Your Future Before You Turn 30 . Forbes. https://www.forbes.com/sites/forbesfinancecouncil/2020/09/24/five- ways-to-invest-in-your-future-before-you-turn-30/?sh=6593473329c4 6
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