1. As someone who recognizes the need to learn how best to manage money in order to survive and thrive in today’s economic climate, I am extremely interested in the realm of personal finance. While it may not seem to carry the challenges and complexity of corporate or public finance, I believe that personal finance carries equally significant stakes for the people whose finances are being handled. Teaching people how to budget, where and how to set up retirement funds/IRAs/401(k)s, and so on are extremely valuable skills that I wish to learn more about, as they often mean the difference between financial security and bankruptcy. Many people do not know the best means by which to save and budget their money, and as a result end up in much more dire financial straits than they need to be. Professional guidance of individuals toward securing their financial future is something I feel would be greatly rewarding and satisfying to me, and so I would like to gain the expertise and experience necessary to assist and advise people in matters of personal finance.
2. Because of my interest in learning more about personal finance, I feel as though it is where my greatest strengths lie as well. Already, I do my best to keep up with a personal budget, utilizing many interesting shortcuts and productivity measures (such as routing all my finances and budget goals through online finance tools like Mint) to allow for easy access to my expenses and accounts. Being financially secure is all about being organized, and I do my best to check in every day with my accounts to make sure that my retirement/savings goals are on target, and my spending is not out of control. I have also personally advised many other individuals and groups as to their best financial options, which has resulted in positive outcomes for them – to that end, I have already taken a great deal of satisfaction from my current experience with personal finance.
3. One of the concepts I believe I understand the best is securitization – the enhancing of financial security through dispersal of credit risk. This commoditizes public assets, giving people greater control over them and increasing the likelihood that they will work out for investors. The level of risk for an investment is usually set by credit rating agencies, which then determines interest rates and acceptability standards for loans for businesses and private individuals, and so on. As someone who has seen people lose their homes firsthand after the 2007 subprime loan crisis, the issue of securitization and its risks is of great interest to me. I believe that consumers and people looking for personal investments should be wary of securitization, as the nuances are so complex it makes it more difficult to perform risk monitoring; the securitization of mortgage loans is one of the reasons people fell for predatory loans during the housing bubble and lost everything. Securitization can have the effect of giving individuals a false sense of security if applied incorrectly, which it was during the housing crisis. At the same time, properly managed securitization (with the help of a proficient financial aid) can allow people to lower their risk in investment; the issue is to accurately portray securities at their appropriate level of risk so that individuals can make the right decision. I believe this is one of the services I can provide people in the area of personal finance – by having the skills to determine which securities are safer than others, I can do my best to protect clients from bankruptcy or foreclosure.
