After reviewing the availed alternatives I propose that Ana should go for the alternative of investing in investments with a guarantee of high yields and reinvest back in green companies if her financial goals are met. This is a convenient alternative considering the amount of time she has to pay back her school loan that is three years. On the other hand, this particular alternative has minimal risk involved compared to the others. High yield investment will require Ana to be very accurate in her investment ideas, judging by her prowess in finance she seems to have an upper hand in this case. Therefore, if she manages to make viable financial decisions on the high yielding investment options she makes in order she will get some gains that will be used in settling the school loan.
Some of the highly yielding investment options Ana can choose to include Non-Public Real Estate Investment Trusts (REITs), Variable annuities with guaranteed income options and Treasury Inflation Protected Securities (TIPS).In this three investment options there are minimum risk. Therefore, Ana is guaranteed that her investment amount is not likely to go to waste. Ana's background in finance will play an important role in her financial decisions; this prior knowledge will help her make a good decision that will help her avoid incurring losses on her investment. Her previous financial knowledge will also help her note the loopholes in her line of investment that she will avoid in order to get quick returns on her investment. This will ensure that she get the required sum of money to settle the loan in time.
Investing in high Yielding investment options will ensure that Ana has enough capital to inject into her environmental friendly start-ups. This is ideal since she will avoid being trapped in debts that are common in start-ups. A study conducted by the Start-ups Institute in America reported that 50% of all start-ups globally fall into debt constraints in their early years (Gaff, 2015). In this case, such a situation would mean that it would take more years past the expected three years for Anas company to give her profits that she would use in paying her school loan. This would also mean that the alternative was a total failure since its intended purpose was not met.
Considering the other available alternative Ana can go with that of paying the $10,000 to the loan lender. However, this particular alternative has some weaknesses. This includes; it will leave Ana with no money to invest, and payment of the $10,000 down payment might lead to the school increasing the amount of loan to be paid due to the installments mode of payment. However, this alternative also carries some good aspect in it, payment of the $10000 as down payment might buy Ana some more time. Therefore it will increase the grace period for the payment completion. This will give her more time to look for the money or wait for her investment to bear fruits.
This alternative, on the other hand, has less or no guarantee that Ana will have the required amount of money to pay up the loan in due time. Paying the $10000 as down payment leaves Ana with no money since this was all her life savings. Therefore, she is forced to look for another source of income which will earn her some money then she can invest it to get the loan payment money. Reasonably this will take some time, which may be past the expected three year period for the loan payment. However, there are slim chances that Ana can get a high yielding investment option with a quick turnaround time. This might earn Ana the required amount remaining to settle her loan even before she can start her company. On the contrary looking for money to invest in her start-up then waiting for returns after three years or less is not a very viable decision considering the dynamics of business (FELDMAN, 2007). This analogy therefore out rightly reveals that this option is not that promising and its success rate is also limited.
These leaves the first alternative as the only viable one which guarantees the required gains needed for settling Ana's school loan. However this option is also dependent on the sound investment choices, ideas and their articulation. If these issues are followed to the latter Ana will get her required school loan amount in minimal time. On the other hand, she will benefit a viable source of income which will help her in her search for financial stability.
FELDMAN, S. (2007). Moral Business Cultures:. Organizational Dynamics, 36(2), 156-170. http://dx.doi.org/10.1016/j.orgdyn.2007.03.004Gaff, B. (2015). IP Issues for Start-ups. Computer, 48(1), 16-18. http://dx.doi.org/10.1109/mc.2015.17
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