Investing in My Future: Free Essay Example

Investing in your future is one of the most significant decisions that an individual can undertake. As an individual, I am determined to make essential decisions on how I spend my finances. The principles of finance learned in this course will play a central role in helping me make the right decision. The first principle of finance is understanding the time value of money. As an investor, I will follow this to the principle latter. For example, if I have $50000 today before I invest it in the bank, it should be able to earn some interest and give me something more significant at the end of the year. Secondly, I will use the principle of risk versus return. It is this principle that will help me to decide on the project to invest in. If the returns are more than the risks, then I will choose to invest in the project. Thirdly, I will use the principle of diversification of risks. I will not put all my funds into one investment as it might backfire. I will endeavor to have different investments. For example, I can decide to put a salon, beauty parlor, and a barbershop on the same building. This diversifying of the risks will give me high returns, unlike if I had only invested in-salon alone. Fourthly, I will use the principle of understanding the financial markets. All opportunities have their risks. I will check keenly to try to balance the risks and the returns. The fifth principle of finance states that management objectives may differ from owner objectives. I will try as much as possible to tie the management objectives with the owner's objectives. Lastly, I will use the sixth principle that individual reputations reflect one ethical behavior. As I invest in my future, I will need to trust in my customers, my employees, and the community at large to operate well.

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Three (3) Ways I will Invest in My Future

A) Bloomberg for education

I choose Bloomberg as it is an investment that will ensure I maintain ethical behavior to the latter and also give me financial freedom in the future. Education is a continuous process. This investment in this digital era will bring financial leadership into the classroom by introducing students to the Bloomberg terminal, which will enable students to access the syllabus, exam papers, and library resources (Upton, Martin, n.d). This will mean that students do not have to go to schools physically to learn they will be able to access education from all quarters, especially in eventualities like the COVID-19 pandemic. This type of investment will give high returns.

B) Real Estate Investment Trusts (REITs)

I will invest through real estate investment trusts instead of risking all my life savings into the investment. Investors like Warren Buffets cite two important rules for investing. Rule number one –do not lose money. Rule number two –remember rule number one. I prefer this type of investment because these holdings continue to reward with steady proceeds. I prefer apartment REITs.I will invest more than 200 properties in New York City, Washington DC, whereby 20% of my earnings will go towards this investment (Weliver, D. (2020).

C) Invest in myself

I would like to invest by acquiring skills that will help me advance in my career. I will take college courses, online courses through YouTube to gain new skills. Acquiring a new skill or even a certificate will get me a promotion hence increased earnings at work. This way, I will remain relevant in my job. By investing in myself, I will be in a position even to make a career change if need be.

My Confidence Concerning Investing in My Future

Investing in myself gives me the most confidence to invest for the future. This is because my future depends on it. The effort I put today into consistently investing in myself will play a significant role in determining the quality of my life both now and in the future. I will invest in myself in these areas: - creativity. Creativity will inspire me to change my life. As I take a walk or hike to enjoy new sceneries, I will not only have fun but also invest in building my creative prowess. Knowledge. According to Brandi L Bates, Education changes everything. I will read books, watch videos that add value, and also devote 20 minutes a day to building a financial skill. Health. I must live long enough to enjoy the efforts I am putting in place now. I will eat healthy foods and exercise every day.

Challenges With Investing in My Future

The legal challenges of real estate, especially in my home country, might be a challenge. To deal with this challenge, I will be strategic and invest in real estate overseas.

The issue of taxes is another significant challenge for my future investment. The chances are that we will need the US accountants and tax experts to help file the taxes. This is because the US tax code is very complicated. To solve this challenge, I will be strategic and only invest abroad but settle in my home country; this is because my tax obligations will be simpler than if I had decided to resettle abroad.

Finally, there is a high likelihood that I will struggle with debt. To solve this, I will not use a mortgage to fund my real estate investment because it will take years before I start getting profits. Instead, I will use real estate investment trusts.

Conclusion

To sum up, one needs to invest in one's future since we live in changing seasons. Before I invest, I need to understand the principles of finance and compare risks versus returns before I decide on the type of investment. Individuals need to learn to apply the principles of finance acquired. Further, there is a need for resilience in order to overcome these challenges that may emerge.

References

Upton, Martin (n.d) Week 1: Why and how should we invest for the future? The Open University Business School. Retrieved June 18, 2020, from https://www.open.edu/openlearn/ocw/mod/oucontent/view.php?id=20939&printable=1

Weliver, D. (2020). How To Invest Money: The Smart Way To Grow Your Money. Money Under 30 (2020). Retrieved June 18, 2020, from https://www.moneyunder30.com/how-to-invest

Housel, M. (n.d)What Is The Future Of Investing? Forbes. (2020). Retrieved June 18, 2020, from https://www.forbes.com/sites/quora/2019/05/31/what-is-the-future-of-investing/#1af2888b10e1

Melicher, R. W., & Norton, E. (2017). Introduction to Finance: Markets, investments, and financial management. (16th ed.). John Wiley & Sons.