ABC of Finance

Investments - cash, securities, other property, including property or other rights having a monetary value, invested in objects of business or other activities in order to make a profit or achieve another beneficial effect.

 Compound Interest Curve:

 FV = PV × (1+r)^n,

 FV - future amount.

 PV - invested amount.

 r - compound interest rate, annual.

 n - the term of the financial transaction.

Risks - the likelihood of an adverse event that entails various kinds of losses, or unplanned profits.

 External risks:

 • Socio-political risks

 • External and internal economic risk

 • Inflation risk

 • The risk of increased competition, changes in consumer requirements, banking crises, etc.

 • Risk of default by partners

 Internal risks:

 • Investment portfolio risk (np correctly invested)

 • Time risk (do not enter the position correctly)

 • Liquidity risk

 • Operational risk

 • Selective risk

 - Chasing big money on a short-term basis

 - Invest all your money in one asset

 - Panic and herd reaction

 - Investment of credit funds

 - unpreparedness for loss

 - Fear

 - Greed

 - Laziness

 - Invest and forget

 It is worth remembering:

 - You can't get rich quick

 - There is always a risk

 - Investment needs to be diversified

 - Don't invest in unfamiliar instruments

A financial plan is a plan to achieve financial goals. Allows you to distribute steps and find the optimal balance. It is important to clearly and in detail formulate goals and desired achievements. If you know where you are going, you will definitely get there.

The main sections of the financial plan:

• Income and expenses

• Assets and liabilities

• Insurance coverage

• Pension provision

• Financial goal(s)

• Calculations

• Investments