Personal Reflection
The material presented in these lectures will obviously be useful for people, who care about their financial position. Financial literacy may help increase earnings and store savings properly. The ability to handle money and securities will definitely help me in life, since I have an ambitious plan concerning my welfare and I am planning to open my own business in the future.
The chapter "Risk and Return" will possibly help me, because I would like to invest money in securities of some developing company specializing in biofuel, IT, or perspective technologies with the purpose of receiving profit at the expense of short-term fluctuations of its price. I made a conclusion that it is better to invest in a small company with a high potential since it will not only benefit the company itself, but also increase the probability of them being profitable.
It would be very good for me to start investing a part of my earnings into the passive income in the form of stocks or bonds that, in the long term, may greatly grow in value. This would simplify my life when it comes time to send my children to the university, as the education in the developed countries is very expensive, and I think it would be extremely difficult to earn this money by hard work. In addition, the interest from these securities will allow me to support myself without making any serious efforts, but rather by using financial literacy and mental skills to find the most successful solutions in terms of investments.
The "Stock Valuation" chapter explained to me the difference between various types of ownership and the actual influence of stockholders on the market price of the stock. Although this information may not be applied in my life, it is still interesting and useful to know.
I learned something new from the lectures: the holder of several different stocks in a portfolio has less risk than someone who has invested more money in the stocks of one company. Learning the structure of interest rates was also interesting for me. This knowledge gives you a better understanding of why the prices of bonds are rising and falling, so you can sell and buy securities more effectively. The "Cost of Capital" chapter was also fascinating for me. It allowed me to consider the company as a collection of projects with different risk levels.
I think that investing in real estate or a car is quite a waste of money, since such an investment is not profitable. However, owning both house and transport is simply necessary, so I have to save a certain amount of money every month for the future purchase of private property and a car. The formula for future value of an annuity would help me with this. By calculating the amount of my monthly savings using this formula, I will be able to know exactly what amount I need to save every time.
So, if you are going to own your business, for example, an IT company, you should know how things work in there. In conclusion, I want to say that financial study can be useful for anyone, especially for modern youth because many opportunities open all the time. Knowing the work of financial transactions and the principles simplifies the understanding of the market economy and allows you to take better decisions about funds investment.
