Good Course Work About Personal Finance

Published: 2021-06-21 23:48:25
essay essay

Category: Finance, Planning, Health, Investment, Health Care

Type of paper: Essay

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Part A

When evaluating healthcare insurance options with a view to selecting one, it is imperative to consider the cost of the insurance. This describes the amount of premium that I will be expected to pay, as well as the payment plan. This would enable me to choose the healthcare option that I can finance adequately, without jeopardizing the coverage of health risks (United Healthcare, 2013). After determining the cost of each of the available insurance plans, the second step would entail understanding the scope of coverage of each healthcare insurance plan. This would enable me to understand the health risks that each plan covers, as well as any other associated benefits (United Healthcare, 2013). This would enable me to choose the best healthcare insurance plan based on affordability and benefits.

When looking into the private healthcare insurance option, it is important to consider the cost of the plan. Private insurance is essential because it supplements the healthcare insurance provided by the government. Its main purpose is to increase the insured’s choices as far as healthcare is concerned. Evaluating the actual cost of the private insurance plan would give insights into the specific benefits. In turn, this should lead one to decide whether any additional benefits are worth the cost of the insurance option, leading to informed decision making.

Part B

Investing in stocks implies that you are entitled to the company’s profits, depending on the investment plan. This affects the investors liquidity management, wealth, financing and financial planning. For example, investing in stocks can simplify the investor’s liquidity management, besides enhancing wealth protection (The Street, 2013). This is because although the investment involves a risk, the company’s management takes care of the risk of losses, implying that to some extent, the investors’ wealth is protected. What is more, since one can buy and sell stocks, the investor can obtain liquid money to finance other investments or for non-investment uses. The investor may also reduce their liquidity by buying shares in a company, which simultaneously increase their investments. Depending on the type of stocks that an investor puts their money in, stocks can be a reliable source of financing, especially in form of regular dividends that are paid out to stock holders (The Street, 2013). This can affect financial planning positively, by acting as a source of funds to finance certain aspects of the personal financial plan. All in all, stocks investment can greatly simplify an investor’s financial planning, liquidity management and financing.

Part C

Before investing in mutual funds, it is imperative to address the issue of taxation with regard to the financial plan. Taxation is worth considering, because most of the investments that may be contained in the financial plan are subject to specific taxation plans. It is therefore important to understand and anticipate such taxes to avoid legal issues related to taxation (Investor’s Center, 2013). This is good because it enables the investor to work towards their long-term financial goals while still keeping their eyes on taxes.

Another important consideration is the review of the sources of funds that are allocated within the financial plan. Seeing that mutual funds, like other investments, entail a real financial risk, it is imperative that the investor checks to ensure that there is a reliable source of funds, lest the investment in mutual funds compromises other possibly more urgent facets of the financial plan.

References

Investor’s Center. (2013). Mutual Fund Taxes. Retrieved 28 November, 2013 from
http://mfea.com/learn/mutual_funds/taxes/content_tabbed/default.fs
The Street. (2013). How to Invest in Stocks. Retrieved 28 November, 2013 from
http://www.thestreet.com/topic/47701/how-to-invest-in-stocks.html
United Healthcare. (2013). Evaluate Plan Options. Retrieved 28 November, 2013 from
http://www.uhc.com/source4women/select_a_plan/evaluate_plan_options.htm

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