Importance of Investment Planning Essay Example

Introduction

In the present case that is under deliberation, Jackson is a recently graduated 44-year-old, not married, and working under a fixed salary scheme. He has financial challenges owing to his student loan and payments towards child support. It is important for Jackson to note that investment planning makes it possible for people to have a planned future. In most cases, people may be overwhelmed by their present conditions to the extent that they may be unable to save for the future or adequately meet their day to day needs (Furley, 2017). Investment planning, on the other hand, directs individuals on the appropriate schemes to inculcate for the fundamental purpose of ensuring that they come up with informed schemes and ideologies when it comes to investments. In the present situation, Jackson can plan on the two hundred dollars in the efforts to owning his very first home.

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Through investment planning, Jackson will be able to meet the objective of having a home as well as strategize himself such that he would have enough money in the accounts upon retiring (Kapoor n.d). The one factor that differentiates between successful people from those that are not is the ability to have a clear distinction between long-term goals and short-term objectives. In most cases, people tend to overemphasize on short-term goals as opposed to the future. In the present deliberation, it is evident that Jackson is supposed to pay up the loan that he was awarded and establish an endeavor that will further support him once he retires. All in all, the above case is a clear manifestation of the fact that investment planning is more of a roadmap that is used to steer the progress of any given entity.

The Steps to be Followed in the establishment of a retirement planning

I would advise Jackson to commence on investment planning by increasing on the amount of money that he sets aside to own a home. As it is now, most of the money that he earns ends up being depleted by the many financial responsibilities on his part. However, the suggestion does not mean that Jackson has to sacrifice his personal needs that are integral at the expense of saving. Also, although it is Jackson's responsibility to take care of the child that he had with another woman in his past marriage, he can negotiate over the amount of money that he is expected to contribute towards the upkeep in the courts (Furley, 2017). In this regard, based on his income, it is evident that the money that he contributes towards the endeavor is too much. Should he succeed in pushing for the agenda in the courts of justice, the money that would be reduced from the present demands should be placed aside as savings. It is only from savings that people can commence establishing their empires. Because of the stance that Jackson has a permanent job, it is also encouraged that he approaches one of the leading banks and sign up a contract that would enable him to start businesses that would further make it possible for him to have a secured future.

Suggested Investment Strategies

Given Jackson's case, I would suggest that he invests in stocks as well as bonds. While the former offers the best platform for Jackson to boost his sources of income, it can be seen that bonds are secure since they are part of the government's strategy to improve people's lives. It is important to mix the two viewpoints as they would go a long way to collaboratively aid in the successful realization of what is deemed integral for any profit-oriented institution. Market conditions and circumstances keep changing, and the only way that such aspects can be defeated is through engaging in a distributed investment planning.

Risks and rewards of investing that Jackson Should be Aware

Suffice it to say, investing is like tossing a coin. It is natural that real investment options and approaches will result in successful business empires while the otherwise would be rather frustrating on the part of the investors. At this point, Jackson should be sure that following the above principles warrants him the opportunity to make profits and even expand his investments. Accordingly, investing the wrong way can make a person to be in debt to the extent that they may be unable to come up with rescue strategies to resume their previous positions.

Minimizing the risks associated with investing risk

As it holds, Jackson is well aware of the risks associated with investing. The first step that he needs to inculcate is conducting decent research in a field even before finally deciding to engage in it (Bekaert & Hodrick, 2017). This would go a long way to ensure that he does not make losses in the case of an industry that faces falling prices of products and disappointment among customers. Besides, investment risk can be avoided if Jackson insures his businesses. Insured entities can always be rescued should any issue arise in the present circumstance or the future.

References

Bekaert, G., & Hodrick, R. (2017). International financial management. Cambridge University Press.

Furley, C. (2017). A critical evaluation of the feasibility of setting up an Event Catering Company in Cardiff, which provides Fine Dining to event organizations to suit their client's requests (Doctoral dissertation, Cardiff Metropolitan University).

Kapoor, D. Focus on personal finance. Hughes, Hart Publishers;5th Edition