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Tuesday, March 25, 2008

What you don't know can hurt you financially

These questions were created by Laura Rowley for us to answers. Ok, let me answer all the Qs.

1. Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After five years, how much do you think you would have in the account if you left the money to grow: More than $102, exactly $102, or less than $102? My answer: More than $102.

2. Imagine that the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year. After one year, would you be able to buy more than, exactly the same as, or less than today with the money in the account? My answer : less than today with the money in the account

3. Do you think that the return than a stock mutual fund." following statement is true or false?: "Buying a single-company stock usually provides a safer. My answers: true

After done checking with the answers given, I only score 2 out of 3 answers. It shows that only I have a basic knowledge in financial, I guess.

This article gives me a lot of reason to think and revise my financial situation. Actually there’s a lot things that we don’t know can hurt us in financial ways.

The author wrote about what we don’t know about financial

· How the credit card balance to can be double in a matter of time.

· Inflation can devaluate our currency.

· Manage to handle risk diversification of investment.

Here’s some good advice that I think we should follow:

· Keep track of your spending for a month or two.

· Sign up for your 401(k) – As known as EPF in Malaysia.

· Put a number on your ultimate goal – your money should be equals to 12 times of your income for retirement.

Please read the full article: What you don’t know can hurt you financially

1 comments:

Jimbo 3/25/2008 9:47 PM  

be careful when using credit card.. It makes you smile today but, it makes you sad tomorrow ..when you received the bill.

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