Answer:
Economic growth of a country is being measured mainly with the help of the three factors they are Gross Domestic Product, Unemployment and Inflation.
The economic activity levels change continually, this change creates an upward and downward movement of economic activity which is called to be as Economic cycles or Business cycles. The constant level changes in the cycle will be of four phases they are Expansion, Recession, Depression and Recovery.
The current and projected trends of Gross Domestic Product, Unemployment, and Inflation are as follows:
• Gross Domestic Product: In 2013 GDP trend is Q1-1.70%, Q2-1.80%, Projected Q3-1.95% which indicates a continuous increase in GDP (%) resulting effective growth in economy.
• Unemployment: Unemployment rate in 2013 for the months of January, February, March, April and May is 7.9%, 7.7%, 7.6%, 7.5% and 7.6% respectively. However, Unemployment rate is projected to range between 7.3% -7.6% throughout 2013, and projected to be around 6.0% - 6.5% in 2014 which indicates Decrease in level of unemployment paving for growth in economy.
• Inflation: The core inflation rate is expected to be 1.9% in 2013, 2.1% in 2014, 2.2% in 2015 which depicts a growth in inflation rate leading to rise in prices, interest rates, stock and bond prices resulting strong need for financial and career planning.
Personal Financial and Career planning decisions in view of above information:
With the help of GDP, Unemployment and Inflation trends individual can plan for their career that which leads a substantial growth, financial goals that which leads a quality of life. In the present context,
• As the GDP and Inflation rate is higher it indicates growth in economy with higher prices, interest rates, stock and bond prices etc., by considering another factor Unemployment which is though declining but unstable, one has to plan for long-term and short-term financial goals with a view of income and purchasing power.
• One should avoid Frequent Switchover in job as the competition for employment opportunity is more and make a career plan of studies or any growth related to career not in the view of income but in the view of purchasing power and financial goals that are set.
Answer:
Person CG's investments have earned about 2% less than expected over the past several years. Currently, he is not concerned about the lower rate of return because he feels it is not significant.
First, it is important to the note that CG's decision to invest his excess funds is an extremely smart decision. Building wealth through investing is a smart way to save for retirement and other major life expenditures. If there is a higher rate of return on investments, wealth will accumulate at a higher rate.
Person CG should be concerned about his investments earning 2% less than expected. This seemingly small percentage can have a significant effect on the amount of money he is actually earning. This is because of compound interest.
As an example, imagine you have invested $1,000 today and it earns 4% interest. After 40 years, your money will have grown to $4,801. Now imagine that same $1,000 invested today is earning 6% interest. After 40 years, your money will have grown to $10,286 - which is more than twice as much as you would have earned at 4%!
From the above example, Person CG should realize that a 2% lower rate of return than expected does have a significant effect on the amount of money he is earning on his investments. It is recommended that he talk to his financial advisor to investigate new ways to increase his investment earnings.
Answer:
Making financial plan is a Dynamic procedure. At different stages of your life, your requirements and goals will be different. Yet certain economic goals are important despite of age. Having extra capital to fight economic depression will remain a part of financial plan despite of age. Having extra capital to fall back on in a financial downturn or a period of redundancy should be a priority whether you are 25, 45 or 65. Some changes-a new job, marriage, children, moving to a new area-may be part of your unique plan.
As we pass from one stage of maturation to the next in our life, our patterns of earnings, home possession, and debt also gets modified. Many young people focus on their careers and building a financial base before marrying and having children. The families of women, who interrupt their careers to stay home with their children, whether for 6 months or 6 years, will experience periods of reduced income. A divorce, a spouse's death, or remarriage can also drastically change your financial circumstances. Many people in their 30's, 40's and 50's find themselves in the "sandwich generation," supporting their elderly parents while still raising their own children and paying for college. And some people must cope with reduced income due to jobs lost because of corporate downsizing or early retirement.
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