Personal Finance Concepts Essay Example | Topics and Well Written Essays - 750 words

Personal Finance Concepts - Essay ExampleWith respect to an individuals financial security, this implicates the need to intelligently plan ones investments and retirement plan, not only to secure a good life for the future, but overly to ensure safety from unprecedented economic crisis and financial problems.As an individual seeking to secure a retirement plan, investing in a house, funds, and retirement insurance such as Individual retreat Accounts (IRAs) will be top priorities. After careful consideration of the market, these three products present the most profitable and secure values, which are crucial factors that must be considered in making an investment.First, a persons home is peradventure his most most-valuable investment. Not only does it provide an important use at present, but, given comme il faut maintenance, ownership of a house and lot preempt reap high returns. Depending on the location of a house and the possible development plans in that community for the fut ure, home values can appreciate up to 100% in a span of ten years. Furthermore, it is also a valuable asset, which could be owe in propagation when large sums of money are needed. In addition, given its high appreciation values, houses can also be very useful for retirement, which could be sold in order to pay for social status in a comfortable retirement house in the future, or rented to earn a plentiful monthly income despite retirement.A second investment of importance are pension plans such as IRAs and 401(k)s. These pension plans, which acts like savings accounts, allows individuals to save money form their salaries beforehand taxes and deposit them into a fund, which finished the years could grow into a sizeable sum. Its importance lies in the manner that it is saved. First, since they are automatically deducted from salaries before taxes, it makes sure that a regular amount of money will be saved every month, eliminating the discover for individuals to skip payments. Fu rthermore, it decreases ones gross salary, decreasing income tax, which gives individuals a higher disposable income if analyzed properly. Thus, it is an efficient investment for retirement. Lastly, some other investment, which is of importance, is gold. Unlike other investments, gold provides the most stable, hence safe, investment for retirement even in times of economic crisis and financial instability. On the average, its value has been increasing throughout the years. Thus, it is no question why it has endured as a viable form for keeping wealth in centuries. Another reason why gold is an important form of investment for a retirement plan is its negative correlation with the US dollar mark (van Eeden, 2000). There has been numerous forecasts regarding the weakening of the dollar in the coming yeas, thus, gold provides individuals with a greater perceive of security. Furthermore, owning gold allows one to diversify his domestic portfolio and diversify the risks present in his other investments. Thus, gold is an important investment for retirement because it allows individuals to diversify his portfolio, hence, shielding it from the risks that could be brought about by a deeply combine world economy, ensuring that ones retirement plan is secure.A house, an untaxed investment, and gold are three important components of a retirement plan because they are relatively stable, diverse, and could still be used in the present during unwaveringly times in mortgages and loans giving them value