Recovery Track.

Okay, here I am recovering from a very terrible flu and fever which started on thursday morning actually but i ignored it till yesterday.

This past week was also very exhausting academically, mentally and physically for me.

I've got to admit really, the pressure is getting to me. With all my UT grades being a C+ and looking at the predicted module grade being pulled down from an A to a B+ is really depressing.

Yesterday did not seem to make things any better for me mentally and physically. Reeta was really a thorn towards the class. She was blabbering about you're in the danger zone if you score a C and below for your UT's and she kept on asking the class to be more specific and go in depth. i'm like seriously, SERIOUSLY, pissed with her.

She manipulated all my questions during the Q and A session to make it sound i was targeting mabe's group during ppt, but i was actually helping them. ARGH. she even gave a freaking brain exhausting RJ, which wasnt needed at that moment with my headaches and all.

later that day, I met farhan and went for floorball. It was fun shit la and i scored and created twice. I'm really hoping on going again even though last night totally drained me to the extent i had to take a taxi home with farhan.

I had one long nagging from my granny about going floorball when i knew i was sick (my temperature was 39.1)...so you understand why.

Rolling back to positive events of the week, Natt gave me an A for problem 8 enterprise. This is what he commented...

Comments for Individual: Your answer is super comprehensive and impressive for first year standard. I would ask you to keep it up but for your sake I think you can afford to town down slightly and still maintain this grade.

Wanna know why? I typed a super long 713 word reflection journal for him which i couldnt comprehend what I was talking about at the same time, beating Vivi's record. LOL...that's the shit hor vivi.

Sometimes i just feel like i got this syndrome where I can be a genius for a second and then be dumbdumb the next. kinda cool ryte?

So the next thing I'm gonna update next about is about this certain someone and me. It's gonna be personal, So watch out for the next post.

So i gtg guys, i'll sign off with the super long RJ i gave Natt...haha...my small moment of genius that happens once in a blue moon. LOL My aunts coming with beriyani!!!

How has today's (16th June) lesson helped you understand about savings and investments?

Today’s lesson has helped me understand about savings and investments better in financial terms and how I can apply them to my daily life.

Savings is the amount left over when the cost of a person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time.

For those who are financially prudent, the amount of money that is left over after personal expenses have been met can be positive. For those who tend to rely on credit and loans to make ends meet, they will have negative savings. Savings can be turned into further increased income through investing.

Investment or investing is however, a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it.

Example to demonstrate the understanding of investments,

Pretend you are going to start a bubble tea shop. You need some money to get your shop started. You ask your grandmother to lend you $100 and write this down on a piece of paper: I owe you (IOU) $100, and I will pay you back in a year plus 5 interest. Your grandmother just bought a BOND(IOU) by lending money to your company named Bubbles.

To get more money, you sell half of your company for $50 to your brother Matt. You put this transaction in writing: Bubbles will issue 100 shares of stock. Matt will buy 50 shares for $50. Matt has just bought 50 of the shares of STOCK from Bubbles.

You sell $500 worth of Bubble Tea’s. Business is good. Your costs for setting up the shop are $150, plus you pay yourself $100 for the hours you work. The company makes profits of $250.

After one year, from the $250 profits, you pay back your grandmother $100 plus $5 interest. You pay $20 to Matt and yourself, also known as SHAREHOLDERS (a “so-called” fancy name for the owners). In business, the $20 paid to the owners is called a DIVIDEND. You decide to put the dividend money in the bank and so Banking the money is called a SHORT-TERM INVESTMENT.

So we can apply this in real life in many ways.

Firstly, Pay off your debts before increasing your savings, but don't leave yourself too short of cash reserves.

Try to get the right balance between debt reduction and savings. By doing this, I would identify what disposable money I had each month through my monthly income statement, and divide it equally between the two.

If you already have the capital, you still need to maintain a balance. By all means reduce the debt, but remember to leave yourself with some liquid capital in case emergencies rise - you don't want to end up borrowing more.

If you are earning money and have big debts it may not be worth over committing yourself in savings.

Secondly, Before Investing, you first need to decide how much monthly income you wish to receive, and for what purposes.

Is it to be your total income, or to supplement income from other sources? Could you accept any fluctuations in the level of income? Only with such information is it possible to give definitive answers.

You also need to determine how you wish to use the money in four years time.

Is it to buy property in Singapore, to set up a bubble-tea shop, or to invest for longer-term income or even for education?

Having identified that income needs, you should set aside enough to cover the first 12 months' requirement in an easily accessible deposit account.

Lastly, Going for gilts, You could also consider short-dated gilts due to mature within your three-year period.

Gilts are bonds issued by the government - in return for your loan to them, they pay a fixed rate of interest for as long as you hold them. They are regarded as safe investments, as the government is unlikely to go bust or to default on the interest payments.

So that’s my understanding of the topic and how I can use it to apply to my daily life. Thank You.