Your decision about one component of your financial plan can affect all other components.Which statement is true?
A) The amount of insurance you choose to carry has no effect on your investing decisions.
B) There will never be any trade-offs to consider when making decisions about your financial plan.
C) If you make poor investment decisions, you may have to work longer than planned.
D) You should contribute all of your extra money to your retirement account even if it means you don't have money available for products and services today.

Question

Quizplus · Accepted Answer

Making poor investment decisions can affect your ability to achieve your financial goals, and you may have to work longer than planned to make up for any losses. This can have a ripple effect on other components of your financial plan, such as retirement savings, budgeting, and insurance needs. It's important to consider how all the different components of your financial plan interact and affect each other when making decisions. Option A is false since insurance needs can impact investing decisions, such as determining how much risk you are willing to take on. Option B is false since trade-offs are common when making financial decisions, and you must prioritize what is most important to you. Option D is false since you need to balance your current and future financial needs, and contributing all your extra money to retirement may not be the best decision for your situation.

Your Decision About One Component of Your Financial Plan Can