flp – gabriellac770's blog

Income vs. Savings

Today in class I learned what linear and exponential growth is. Linear growth is when your money increases by the same amount every time. You add by the same number each time to equal your outcome. Exponential growth is when your money increases by itself every time. Linear growth does not grow as fast as exponential as seen in my graph my linear growth is a nice steady line as my exponential growth grows up on a slant. Your income is more line linear growth and compound interest grows just like exponential does. Compound grows faster as time goes on and grows faster and faster as the time goes by. For linear growth is like income because you are basically getting the same amount of money every year

Budget

Learning to make a budget and not going overboard with it is harder than I thought. I learned that when it comes down to the last dollars it is hard to pick where to put that money. There were two places that I added money too. Those two places were saving and misc. I chose these places because I learned that it the outcome in life those are the two places I will look for more money. I also learned that a budget is super helpful in the long run when you are trying to make sure you stay on the track with your money and not go into debt. Others might have a higher amount of money where you have barely anything. This is because it all must do with who you are and how much you make a month or year. The picture below is of my budget.

My Car:

https://www.carmax.com/cars/land-rover/range-rover/2012/12787265

My House:

http://www.zillow.com/homedetails/3312-Neuse-Crossing-Dr-Raleigh-NC-27616/60398809_zpid/

Rich Kid Smart Kid Games

The first game I played was Jesse’s Ice Cream Stand. I learned what a profit is. A profit is the money that you can make by making more money selling your item than buying the item. In the game, Jesse was trying to make the most profit. Jess paid $4 dollars for 15 scoops of ice-cream. If he sells the 15 scoops for 30 cents he will make a profit of 50 cents. Which isn’t a lot but that would be his profit. To find the profit you take the amount of money it takes to buy the ice-cream and subtracted by the money you made. So, in this case, the grand total would be $0.50.

The second game I played was helping Ima learn to pay yourself first. I learned that to become “rich” you should learn how to pay yourself. Which means, for example, you would have three “piggy banks”. One would be called giving, the second would be called saving, and the third would be called investing. As you make more and more money you can start dividing your money into the three piggy banks. I also learned that the more wisely you use your money the more you will make. By putting money in each piggy bank the more wisely you will use your money.

Career

The career that I chose is a Pediatrician. Pediatricians basically are doctors for kids. They diagnose and give treatment to kids who are sick. They also do yearly checkups. Pediatricians take medical histories and prescribe medicine. A pediatrician can work in private clinics or in larger spaces. To become a Pediatrician, you must go through many years of school. To become any type of Physician you must have your Doctoral or a professional degree plus your bachelor degree. Both of those both take 4 years. Which includes a lot of debt, from paying back your student loans. You don’t need any work experience in a related occupation. Though, you do need to go through an Internship or Residency which is what I will be doing. This can take 3 to 7 years depending on what you want to do. Which means you don’t make the high percentage until later in your career life. I think this job is perfect for me because I love kids and I can still be around them without being a teacher. The job outlook is predicted to grow 14% from 2014 to 2024 which is much faster than average. My median salary would be $60,000 but after all the debt is paid off I would make around $187,200 a year.

Introduction to Financial literacy

What I learned today in class is that when you put money in an account at the bank, the bank will pay you for keeping your money in the bank. This extra amount they pay you is called interest. For example, you see that Charlayne adds the same principal amount of $2080 each year and interest is calculated and then added to the original balance. The next year your ending balance will turn into your beginning balance. As the total amount gets larger, the amount of interest also grows, this is called Compound Interest Compound interest is when the bank pays you interest on the total amount of money that you put in the bank. As seen in Marcus’s spreadsheet he does not start saving until year ten. which sets him back 10 years. By still putting in the same amount of money Marcus doesn’t make the same amount of money at year 45 because he doesn’t have the 10 years of interest. I learned that you are never too young to start saving and you should start as soon as possible.

As seen in Marcus’s spreadsheet, he does not start saving until ten years later. Even though he is still putting in the same amount of principal as Charlayne each year, Marcus doesn’t receive the same amount of interest payments. By year 45, he misses out on 10 years of compounding interest. I learned that you are never too young to start saving and you should start as soon as possible. Unlike Marcus, you could end up a millionaire after 45 years of saving.