Personal Financial Management

Question 1

Never put yourself in a financial compromising position, i.e., financial stress, over extended, or going into debt

Answer 1

Financial stress: cash flow problem, going into unusual financial situation.

Question 2

Never depend on the stock market for income and living expenses.

Answer 2

If you need the funds in 5 years, don’t put it in the stock market.

Question 3

Predicting the future is hard, because of many variables, black swan events, etc.

Answer 3

Cost dollar averaging is a technique to average the impact. Be conservative in predicting the timing and situation you are in.

Question 4

You buy high, sell low, because

Answer 4

You cannot predict the timing and situation you are in.

Question 5

Don’t let the sweetener, sale event, blind you and cloud your judgment.

Answer 5

Evaluate the sweetener, compare it with the long term cost. Don’t be penny wise, pound foolish.