Investing is not a get- rich- quick scheme
The project is on and it is completely in our hand's to figure out how to pull it together for next week. Our class has been separated in three different groups (us being: broker #2) and each will set a different investment proposal for the $1000 having the end on mind.
First step: BUDGETING OUR TIME
Now that I have been in the IA for a couple of weeks keeping deadlines for collaborative works is key for the success of each task given that every one is depending on each other. After learning the relationship between PRESENT VALUE and FUTURE value for money where a dollar today is more valuable than a dollar tomorrow, as a class we concluded that it is the same with time. Whatever you do today with your time will directly impact the future. This ties up with the concept of COMPOUNDING values and the stock market as well. We decided to use Trello and separated the tasks along the week, adding people to the board in which they would be working. This program would also allow us to share interesting articles we find on finance.
Setting up systems was vital: GOOGLE DOCS- every one will add what they find.
Before jumping into desition taking we need to:
In our budget plan we've separated time to meet with an expert on finance and with a financial consultant for additional feedback on the desisions we take.
I never stop finding it surprizing how much information is in our reach if we are constant inquires and choose clever key words with search engines. I was able to collect a bunch of fresh data. Here are the terms and concepts that are relevant:
compounding: to calculate the present value to future value in a given rate. EX: $100 with 10% interest in two years =121
FV= PV (1+i)^N
FV= future value
PV= present value
i= the interest rate per period
n = the number of compounding periods
diversification: reduces risk (diversifying your portfolio by investing in multiple stocks and not relying in only one)
ETF: exchange traded fund: sell and buy small shares, lower than average mutual fund.
Bonds: buying a company's debt (safer)
aggressive investing risk > 10%
volatile stock: fluctuates a lot (risky)
It's actually pretty simple: Investing means putting your money to work for you.
I've realized the power of being informed since if you are sagacious when managing your stocks you have the freedom to sit on your bum and become more lucrative at the same time. Before, I was not aware of the value of investing at a young age. BY doing this you are ONE STEP AHEAD (or plenty) as I could start earning compounding interests on my money. That possible increment might not seem as significant in one year but as these acummulate a 6% or 10% rate can boost my capital (if my investment has successful results). Additionally it depends on the risk of the stock or bond I decide to take, the agressiveness of my investment, the additional costs of my investment method... THIS should all be decided taking in mind: WHAT AM I WORKING FOR. A car? college? Thse are questions every client should ask themselves.
(I know my dad will first be surprised or even laugh at me when I do this, but...) this project has inspired me to desire to start RIGHT NOW working towards the future, because.. WHY WAIT?
My plan for tonight will be sitting down with my parents and discussing the investing options I have. From this, I will gain additional knowledge and advice to start reaching for my life goals NOW instead of waiting to graduate to face the real world of buissnes.