4 basics of finance, every freshmen should know (infographic)


Source: Transtutors.com Description: The post teaches the basics of finance, every college freshmen should be knowing. First principle is known as “Time Value of Money”. It says, the surplus worth of money will always appraise if spent wisely. Perpetually growth of your investments is in your hands. Depends on how you invest. Second basic principle of finance is “Compounding”. Albert Einstein once called “The Power of Compounding” as eighth wonder of the world. At the age of 22, an average investment of $10,000 will mushroom $58,714 till you grow 45(Compounded at 8% annually). One who understands will unveil it forever, one who doesn’t will pay till infinity. Third basic principle is “Leverage”. In layman term, Leverage means investing borrowed capital for potential increment upon return on investment. A good example of leverage could be College Education. Fourth principle is about “Inflation”. It marks the general increment of price vs fall in purchase value of a commodity over time. For example: A Howard degree costs 17 times higher as compared to 1971-72.

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