Question

Cite at least two finance concepts that you have learned this semester and explain how you will use these concepts in making personal and business investment decisions. Ten sentences or less.

Answer 1

The two common terms in the financial world is focussing on savings and long term value creation. These two concepts can be used in the personal as well as the business Investment decisions. The idea behind these two is also applicable to other aspects of life.

Savings: No matter what is your earning level, always make sure to save a certain proportion of Income and Invest. This not only creates right habit but also creates discipline in spending. Beside investing small-small amount over a long period of time can become significant if you consider the impact of compounding.

Long term value creation : Focus on Investment which can create value addition for your portfolio in the long run. Short term market may be very volatile but Investing in securities below their Intrinsic value, which has the potential for growth can create significant amount of return. This idea can be very well applied to personal life as well. One should Invest their time and effort for relationship which can create value for them in the long term.