Step-up the finances to the next level
Let’s we talk about finance. As a disclaimer, my knowledge of finance is still accumulating until now. So if you (my beloved reader) have broadened perspective and knowledge about what I wrote below, just put it in the comment, and let the other readers reach out your taught.
Finance is something that become a majority in my life since.. maybe a few hours ago while I got stuck about the finances. (I suggest you to check your balance now!) :`)
Just a little bit ice-break ✌️
let’s focus again..
Actually, since 2020, I start my own business while studying in Bakrie University. Yess.., go to Bing or your favorite search engine, and find-out my campus. The Maroon. A campus that holds strategic place ever so far in Jakarta. the Gold Triangle! Using English in specific areas, diverse communities.. !@#$%^&*()_ .. etc.
…and since that time.., running a business means you should understand finance, at least 5+5 = 10, not = 100
..(except you are a philosopher). Well, I can’t say a word for that.
..and since that time, I try as much as I can to understand money. Finance. this is not my typical, to be honest. I just really enjoy the way to spend money rather than count on it one-by-one (not good advice for you, and that’s why I started to revolutionize the way I spend my money by writing this journal).
Once again, understanding money and how it works as a young entrepreneur like me? Is mandatory.
If you would like to know, the urgency to be more finance literate also becoming the majority since now ✌️, since you reading this journal. 😬
You may check what the Y20 Indonesia (Youth Delegates from G20 country participants) who discuss about digital literacy. Interesting right? so what is it actually?
Finance is: (n) the management of large amounts of money, especially by governments or large companies; (v) provide funding for (a person or enterprise):
… thanks Bing.com, you do it very well. 🙇♂️
But in my point of view: it’s all about money, in the whole. Wherever, whenever, whatever it is the money rise-up, then the finance will come-up. So finance is talking about money. Just it. If you do not agree, just put it in the comment, or throw your phone cause the algorithm of medium preferred this journal for you. :D
So, because I’m a person that cares about the future of all of you (my reader), I start to think. (..a few moments later) that should there a journal talk about this, and the way to multiply the money. Right? (pls say yes in the bottom of your heart). But of-course not printing money (this is the government decision and policy to printing money).
So brought by that background, I started to swim into the internet, exploring my books, and found one interesting thing to share. It is the Boston Consulting Group Box. What is it? It is a consulting company, in Boston.
This BCG method was developed as the measure tool to map the investment. (Not to measure your future or your couple, please call 911 for that, and thank me later). The BCG method is a matrix containing 4 areas and every area represents a type of investment.
So, let’s step-up to the next stage, the types of financial investment that I categorized by myself. Shown below:
(further explanation (reason) behind the choices) shown below:
I will start from the Dogs: Options, Money Market Accounts, & Retirement Plans.
Dogs is a unit of finance investment that has very high risk in the market. Dogs should be defended if it has value more than money and finance.
Further, these three common types of investments how is it work
a) Options
An option is a little more complicated method of financial investment acquisition. You purchase the right to buy or sell an asset at a specific price and at a specific time when you purchase an option. Options come in two flavors: call options, which are used to purchase assets, and put options, which are used to sell options.
As an investor, you fix the price of a stock in anticipation that its value will increase. The stock could also lose money, which is the risk associated with an option. Thus, you lose the money from the contract if the stock’s price falls from when it was first purchased. Options are a sophisticated investing strategy, thus retail investors should use caution while employing them.
b) Retirement plans
You have two tax-advantaged options when purchasing stocks, bonds, and funds through retirement plans. You can invest with pretax money in the first type, and you can withdraw money without paying taxes in the second.
401(k) and 403(b) retirement plans are offered by employers. Employees without access to these programs could use an IRA or a Roth IRA to fund their retirement.
The risks associated with these financial investments are identical to those associated with purchasing stocks, bonds, and funds outside of a retirement plan.
(I guess you will be confused with this, something that more valuable than money and finance is?) Yes, you are right, it is the helping hand from your friend). The vote for this: liquidate.
The question marks: Commodities, Cryptocurrencies, & Certificate of Deposit
Question Marks, or well-known as “Annoying guy”. Is the area of the matrix that has high potential to grow, but the market need is low.
Commodities
You can invest in commodities, which are tangible goods. They are widespread in futures markets where producers and commercial buyers, or experts, try to protect their financial interest in the commodities.
Cryptocurrencies
This is a relatively new form of investment. The most well-known cryptocurrency is Bitcoin, but there are a ton of others as well, including Litecoin and Ethereum. These are virtual currencies that are not supported by the government. On cryptocurrency exchanges, you can purchase and sell them. You can even make purchases with some merchants.
Certificate of Deposit:
An investment in a CD carries a very minimal risk. You loan money to a bank for a certain period of time in a specific quantity. You receive your investment back along with a predetermined amount of interest once that time period has passed. Your interest rate increases as the loan term lengthens.
With high financial support and good maintenance, these question marks could shift into the stars area. This is hard and complicated thing to choose for some investors.
The stars: Exchange Traded Funds (ETFs), Mutual Funds, & Real Estate.
The Star has a good market share and good growth. On the other side, the growth itself need a lot of cost.
Mutual Funds
A mutual fund is a collection of numerous investors’ money that is broadly invested in a variety of businesses. Both actively and passively managed mutual funds are available. A fund manager who chooses which securities to invest investor money in runs an actively managed fund. By selecting investments that will outperform such an index, fund managers frequently attempt to beat the benchmark market index. An index fund, usually referred to as passive management, simply follows a significant stock market index like the Dow Jones Industrial Average or the S&P 500. Mutual funds have access to a wide range of instruments, including derivatives, stocks, bonds, commodities, and currencies.
Exchange-Traded Funds (ETFs)
Mutual funds and exchange-traded funds (ETFs) both consist of a group of investments that follow a market index. Shares in ETFs are bought and sold on the stock markets, as opposed to mutual funds, which must be purchased through a fund provider. While mutual funds’ value is merely the net asset value of your investments, which is determined at the conclusion of each trading session, their price changes throughout the trading day.
Real Estate
Real estate ventures now extend beyond only purchasing and selling properties or collecting rent. Real estate investment trusts (REITS), which are businesses that own properties that generate revenue, and real estate crowdfunding platforms, which pool investor money into real estate projects, allow investors to take a hands-off approach.
Many investors and consulting companies will pray for this to shift into the cash cow area. The sentencing from the consultant is: go ahead, (all we need is just a little patience — Axl, GnR)
The cash cows: Bonds, Annuities, & Stocks
the Cash cow is a type of investment that has a large market, but the growth is relatively slow. This means that the expenditure is relatively not high, but has a good return. The consultant advice will be: Take!
