Financial planning

commit is not as simple as it seems. For, numerous people oft adore which of the different types of investment processes forget present more bills in the shortest possible time(Weston, 1996). People often equate the viability of investments in terms of many factors including safety, risk, income, emersion, and liquidity. The following paragraphs explain these decision making factors in detail. automobile trunkStock or Equity Financing. The investor entrust feel safe if he invests in a conjunction that has a historical trend of generating network(Gapenski, 1997). For, he gets a sh are of the income if the order makes specie. On the early(a) hand, the investor depart have a high fortune of squandering his or her money if the companion he or she invests in has been generating losses for the past form or years of operation. To reiterate, he will generate income if the company generates income. Also, he or she will limit his or her investment money decrease if the com pany generates losses.For, his or her investment in stocks or fair play financing will grow if the company generates profits in its generating activities. Thus, if the company generates losses, the company will end growing in terms of net assets. If the assets of the company are liquid, then this is a good investment. liquid state is how genuinely near the assets like inventory, accounts receivable and the remaining other assets dissolve be easily converted into cash. Cash is the most liquid asset. The investor is the stockholder or proprietor of a certain percentage of the company. Surely, forthcoming income is unpredictable.Corporate and Goverment Bonds. The investor will feel safe if the company he lends his money has been generating income for the past year or years of operations for thither is strong probability that the company will have enough money to pay the bond investor. Evidently, this is a lender (investor) & borrower (loaner) relationship. Likewise, if the compan y is generating profits for the past years, then thither a miniscule risk that the creditor will be paid when the cod date for loan payment arrives.The income of the investor here is based on a pre agreed sake rate. Thus, future tense delight income can be predicted. The growth is predictably fixed based on the periodic interest income rate agreed by the parties. enthronement here is very liquid because the investor received fixed interest income on the money he bestow to the company. Definitely, investment here is very predictably fixed. uncouth Funds. Here, money from a group of investors is collected and invested in bonds, stocks and other short term money market place securities and instruments. This is a safe investment because the interchangeable cash are invested by an expert third party in stocks, bonds or cash options such as Euro dollar, and other foreign currencies in what we call forward contracts. Thus, investments here are safe and the risk is very minimal. Th e income is very assured because money is invested in several income -generating companies.The uncouth fund representatives are generally experts in giving advice on which funds to invest money in. The mutual fund advisor gathers data and analyzes the peculiarities of for each(prenominal) one fund and determines the optimal mix of securities and communicates this to the investor. Consequently, money invested here will grow fast because of the expert caution of the mutual fund advisors. Finally, liquidity is reassured because the money invested in the different funds can be easily divested and the cash investment withdrawn. Clearly, future income here is erratically in the investors favor.Real Estate. Investment in echt estate is very safe because the market value of priming coat continues to escalate upward. Thus, there is a very small risk in real estate investments. Investment in land is very reassured because land prices continue to rise each year. Furthermore, growth will undoubtedly go each year. This investment is very liquid because, land can easily be sold and converted to cash anytime of the day. Investment here is very lucratively predictable.CONCLUSION four of the more popular investment methods are 1) Stock or Equity Financing 2)Corporate and Government Bonds 3) Mutual Funds 4) Real Estate. The bottom aura here is that the investor in interested to know if he or she will make money from investing his or her hard earned cash and cash equivalents. In conclusion, each investor will often ask the method which he or she is very comfortable with.REFERENCESWeston et. Al., Essentials of managerial Finance, Dryden Press, New York, 1996Gapenski, L., Brigham, E., monetary Management, Dryden Press, New York, 1997Financial planningInvestment is not as simple as it seems. For, many people often wonder which of the different types of investment processes will yield more money in the shortest possible time(Weston, 1996). People often equate the viability of investments in terms of many factors including safety, risk, income, growth, and liquidity. The following paragraphs explain these decision making factors in detail.BODYStock or Equity Financing. The investor will feel safe if he invests in a company that has a historical trend of generating profits(Gapenski, 1997). For, he gets a share of the income if the company makes money. On the other hand, the investor will have a high probability of squandering his or her money if the company he or she invests in has been generating losses for the past year or years of operation. To reiterate, he will generate income if the company generates income. Also, he or she will find his or her investment money decrease if the company generates losses.For, his or her investment in stocks or equity financing will grow if the company generates profits in its generating activities. Thus, if the company generates losses, the company will stop growing in terms of net assets. If the assets of the compa ny are liquid, then this is a good investment. Liquidity is how very near the assets like inventory, accounts receivable and the remaining other assets can be easily converted into cash. Cash is the most liquid asset. The investor is the stockholder or owner of a certain percentage of the company. Surely, future income is unpredictable.Corporate and Goverment Bonds. The investor will feel safe if the company he lends his money has been generating income for the past year or years of operations for there is strong probability that the company will have enough money to pay the bond investor. Evidently, this is a lender (investor) & borrower (loaner) relationship. Likewise, if the company is generating profits for the past years, then there a miniscule risk that the creditor will be paid when the due date for loan payment arrives.The income of the investor here is based on a pre agreed interest rate. Thus, future interest income can be predicted. The growth is predictably fixed based o n the periodic interest income rate agreed by the parties. Investment here is very liquid because the investor received fixed interest income on the money he lent to the company. Definitely, investment here is very predictably fixed.Mutual Funds. Here, money from a group of investors is collected and invested in bonds, stocks and other short term money market securities and instruments. This is a safe investment because the mutual funds are invested by an expert third party in stocks, bonds or cash options such as Euro dollar, and other foreign currencies in what we call forward contracts. Thus, investments here are safe and the risk is very minimal. The income is very assured because money is invested in several income -generating companies.The mutual fund representatives are generally experts in giving advice on which funds to invest money in. The mutual fund advisor gathers data and analyzes the peculiarities of each fund and determines the optimal mix of securities and communica tes this to the investor. Consequently, money invested here will grow fast because of the expert management of the mutual fund advisors. Finally, liquidity is reassured because the money invested in the different funds can be easily divested and the cash investment withdrawn. Clearly, future income here is unpredictably in the investors favor.Real Estate. Investment in real estate is very safe because the market value of land continues to escalate upward. Thus, there is a very small risk in real estate investments. Investment in land is very reassured because land prices continue to rise each year. Furthermore, growth will undoubtedly unfold each year. This investment is very liquid because, land can easily be sold and converted to cash anytime of the day. Investment here is very lucratively predictable.CONCLUSIONFour of the more popular investment methods are 1) Stock or Equity Financing 2)Corporate and Government Bonds 3) Mutual Funds 4) Real Estate. The bottom line here is that t he investor in interested to know if he or she will make money from investing his or her hard earned cash and cash equivalents. In conclusion, each investor will often choose the method which he or she is very comfortable with.REFERENCESWeston et. Al., Essentials of Managerial Finance, Dryden Press, New York, 1996Gapenski, L., Brigham, E., Financial Management, Dryden Press, New York, 1997