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

Personal Finance Concepts - Essay ExampleWith respect to an individuals monetary security, this implicates the need to intelligently plan ones investments and retirement plan, not only to secure a good life for the future, but also to ensure safety from infrequent economic crisis and financial problems.As an individual seeking to secure a retirement plan, investing in a house, gold, and retirement insurance such as Individual Retirement Accounts (IRAs) will be top priorities. After c argonful 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 perhaps his most important investment. Not only does it provide an important use at present, but, given proper maintenance, ownership of a house and lot can reap high returns. Depending on the location of a house and the possible phylogenesis plans in that community for the future, home values can a ppreciate up to 100% in a span of ten years. Furthermore, it is also a worthy asset, which could be mortgaged in times when large sums of money are needed. In addition, given its high appreciation values, houses can also be rattling useful for retirement, which could be sold in order to pay for membership in a comfortable retirement house in the future, or rented to hold a sizeable 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 variation their salaries before taxes and deposit them into a fund, which through 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 chance for individuals to skip payments. Furthermore, it decreases ones gross salary, change magnitude income tax, which gives individuals a higher disposable income if analyzed properly. Thus, it is an efficient investment for retirement. Lastly, another investment, which is of importance, is gold. Unlike other investments, gold provides the most stable, hence safe, investment for retirement yet 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 coefficient of correlation with the US dollar (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 sense of security. Furthermore, owning gold allows one to alter his domestic portfolio and diversify the risks present in his other investments. Th us, 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 integrated 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 hard times in mortgages and loans giving them value