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It became obvious after seeing the video "The Money Game" that it is one of the best financial literacy resources available. With the world changing so quickly, teaching kids how to manage their money wisely has become a crucial part of life. Children will always be prepared for any financial difficulty during their adult years if they develop strong financial skills from a young age (Smith, 2015). Additionally, it is crucial for children's growth to give them a solid foundation and to educate them on financial issues. Moreover, showing them the basics like how to budget for the little money they have as well as how to save money leads to the attainment of good money habits in future. Schools need to introduce money related programs in the curriculum to teach students the principles, concepts, beliefs, habits and different ideas related to money and investment. After saving enough money, the students should be educated on ways of investing in assets like real estate, the stock market as well as business. After investing the students should be made aware that they will receive some passive income (Smith, 2015).While providing the financial literacy to the children parents and teachers should keep the following guidelines in mind:
It is better to advice and guide, rather than dictating and directing,
Children should be allowed to learn from successes as well as mistakes
Children should be advised on what to do and what to avoid as well as the consequences of violating the set money limits.
Ways of Financing a Business
Starting a business is among the most exhilarating endeavors. The anticipation to offer new products and services to the world, creating a legacy and designing one's future are among the major reasons as to why people engage in business (De Visscher, 2016). However, numerous facets have to be addressed before starting a business. One of them is obtaining the required funding to start the business and to facilitate growth.
One of the major ways to finance a business is using the saved money. This is perhaps the most conservative, wisest and safest way to start a business. However, this type of financing contains some disadvantages as one is limited by the amount of saved money (Rossi, 2014). Research has indicated that some entrepreneurs go a step further to take money from their retirement plans, homes through a home equity line of credit as well as different insurance policies to fund their businesses. This is, however, a very risky strategy because if the business fails, then one may lose his or her home, insurance or retirement benefits. Some of the advantages of self-funding include the fact that one retains full ownership of the business which means that one receives 100 percent future profits. Secondly, using your own money to fund a business provides more control as compared to other financial options (chaper et al., 2014). This is mainly because the entrepreneur doesn't have to pay back or to rely on any outside lender or investor who can withdraw their support at any given time. Lastly, self-funding ensures that the entrepreneur lives within his or her means which means that they will only invest in marketing and equipment when they need to.
The second way is getting money from potential investors. One is required to come up with a business plan which will be submitted to the potential investor. The business plan should include the total amount of money needed to start the business as well as the projected amount for the next five years (Rossi, 2014).It is also advisable to include information related to the way the funding will be implemented and the preferred type of financing. Lastly, any essential financial plan for the future needs to be outlined. The plans include selling the business, buyout plans as well as debt repayment mechanisms.
The third way to finance a business is getting a business loan. The loans can be from banks or other financial institutions like private lending entities. For instance, the Small Business Administration (SBA) provides different loan programs aimed at accommodating different business needs (Schwienbacher, 2014).The loans include microloan program as well as equipment loans. However, it is worth noting that financial institutions provide financial assistance to the individuals and businesses which have met specific requirements. Additionally, the financial institutions maintain different terms and qualifications which should always be considered before taking a loan.
The last way to fund a business is making use of friends and family. This is where the entrepreneur gets friends and family members to invest in their businesses. The friends and family members can be asked to make equity investment which the entrepreneur will sell as part of the business. The entrepreneur can also ask a business loan from the friends and family members. However, just like any other business financing method, involving friends and family members poses a great risk because if the business fails then the entrepreneur risks affecting the relationship (De Visscher, 2016).The other problem is that one is forced to have a business partner even if they don't want to. Research has indicated that even the 'silent partners' will become very opinionated and talkative once they realize that their money is at stake.
De Visscher, F. M. (2016). Financing transitions: Managing capital and liquidity in the family business. Springer.
Rossi, M. (2014). The new ways to raise capital: an exploratory study of crowdfunding. International Journal of Financial Research, 5(2), 8.
Smith, A. (2015). The money game. Open Road Media.
Schaper, M. T., Volery, T., Weber, P. C., & Gibson, B. (2014). Entrepreneurship and small business.
Schwienbacher, A. (2014). Financing the business. Routledge Companion of Entrepreneurship, London, 193-206.
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