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Financial decision based reflective essay

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FINANCIAL DECISION BASED REFLECTIVE ESSAY1

Introduction1

Chronological reflection on financial decision2

Reporting and responding2

Relating 4

Reasoning………………………………………………………………………………………………………………………………4

Reconstructing ………………………………………………………………………………………………………………………4

Conclusion………………………………………………………………………………………………………………………………………….5

References ………………………………………………………………………………………………………………………………………..6

Introduction

Money is quite an interesting object. Most people perceive it as an object of power. Daily, around the world, people are in constant search for this item. You will be surprised by the extent people will go to acquire this precious item. However, this precious object is constantly used around the world by people to purchase items, creating wealth among other various uses. But it mostly shows a sense of power, not only individually but also nationally and internationally. Reports are produced daily by nations indicating their Gross Domestic Product and it is based on their currency or internationally used currencies as it is a way of them measuring their financial position in the world standards. People also measure their wealth status by quantifying all their wealth and assets based on the currency of the day to show the power they are possessing. However, this item called money is quite tricky in acquiring (AC Shapiro, P Hanouna, 2019). People would sell their belonging, inheritance, and other things to acquire them. Others would even go to the extent of being in heavy debts to get an item as money is what is used to acquire even the basic needs to survive.in this reflective essay, I will discuss a personal experience on how money has been an item that I have been pursuing daily, what I have done to get it, the challenges I have faced in pursuance of this item, the lessons learned in the process and this is as a result of decisions I was making.

In 2013, I decided to purchase a property that was a 14 hours’ drive from where I lived. To do so, I had to move my family; parents, and my young child to this new destination. My reason for this move was a change in my career roles and a change in my husband’s work (Botzem, S., & Dobusch, L, 2017). Also, the move to relocate my parents was because I wanted them to be close to their other grandchildren, have them close to the state-of-the-art hospitals because of their health, and setting up my daughter in a school before she started primary school. It was a huge move and even though my company was receptive, they assisted me in the move. There were expensive furniture and other items to be moved to this new house which was expensive as we moved from Mackay to Gold Coast in Queensland, Australia. Finding the property was difficult and expensive as I had to pay for accommodation with my daughter, pay for flights down to the town, higher cars and buy food with my daughter. The search paid off and we found something in November 2013 and moved in February 2014.

Chronological reflection on financial decision

Reporting and responding

I started living with my parents in October 2013 because before then, I had moved them close to me in January 2012 since they required being looked after as they had retired. There were several reasons for moving my entire family to Gold Coast in Queensland (G Bekaert, R Hodrick , 2017). I was also moving closer to my brother and his family. My parents’ health was deteriorating therefore they needed access to great hospitals, the weather in Mackay was so hot and I wanted to find the best school for my daughter. These reasons were among the factors I had to consider as I searched for a property. My husband was working in the mines at the time so it didn’t matter where we lived but we had to pay for his flights to and from, the door-to-door drop-off service among others and so that would be more expenses. I also had to consider the fact that I had two mortgages, 3 sets of rates and water bills, 3 sets of house insurances, and everything else that goes with owning a house therefore, I also had to consider a house that fit my budget.

When I was in Gold Coast, I had specific wants as to the property I was purchasing. I wanted a two-storey house that had two separate lounges where my parents would stay downstairs and my family at the top. I also wanted a house with 3 bathrooms, one bedroom and full bathrooms downstairs, and 3 to 4 bedrooms upstairs( J Gathergood, J Weber, 2017). Since I was specific, I had to find an agent who would help me find a property that would satisfy my needs. However, it was difficult to find one as a number were useless, some tried to assists but I was successful to get one since they tried to help and I ended up working with them. I had to make evaluations on the properties, balance my books by comparing my assets; properties I had before and liabilities I was incurring in the process. I also had to look at my debt ratio to effectively prepare an all-inclusive budget to cater to all the needs.

Even though we found perfect properties, I didn’t go for them as I had reasons where most of them came to costs, for example, I came across a property with security huts and CCTV in the streets whereupon inquiry I found out that there was a corporate on the estate where people had to pay them and that there were several rules to this estate ( J Gathergood, J Weber, 2017). I declined these properties as there would be several increased costs in the future. I also passed by other properties with several facilities like gyms and bbq areas but I declined them all due to different reasons. I ended up settling on a property that is close to a large and popular walking track around the lake, has a lot of water sports, close walking distance to large theme parks, close walking distance to school, shopping centers, and close to M1 highway among others.

However, I made a compromise since it had a small backyard because it was taken by pool and entertainment area and hence little grass area for the animals who were mostly indoor animals. The house I purchased has nobody cooperate and therefore I have fixed expenses, insurances and budget for electricity among others. I now have an additional large mortgage. However, I am happy since being close to hospitals and specialties as there are many medical episodes since moving down here and my parents are alive by being close to these facilities. This was the best move.

Relating

I was a financial planner at the time and so I was able to apply my budgeting skills in the acquisition of the property, buying furniture, looking at current needs and future requirements. I also factored in extra costs for my husband getting to and from work, the lifestyle change, and my parents moving closer to my brother and his family. Since the pro’s outweighed the cons, I had to make the move. This condition is very similar to most people who are moving from one place to another since they have to acquire mortgages for the new property especially those who are not financially capable (M Altuntas, J Rauch, 2017). They have to consider their budget as I did and future benefits for the move.

Reasoning

There were benefits to the move for my family and parents and also financially as the move would still have taken place in the future but at the moment the benefits of the move outweighed the costs and so I made the move. I had some financial backing from my employer where I received just under 50% of the moving costs ($15,000). This was possible since I was able to claim some support from my employer because I read that I may be able to make these claims from my employer. This was my decision and not my employer and therefore was able to assist. Therefore I was really lucky to make the claim.

Reconstructing

I learned that having 3 mortgages, 2 rentals and added costs was expensive. I also learned that I had a great opportunity to sell my property back at Mackay but it is currently not possible to do so due to the current nose dive in the market. And since the property is a 14hrs drive from where I live, it is hard to manage the tenants because they have not been keeping the property in its best state. Therefore in the future whenever I would like to move to another property, I would also consider selling the property at the opportune time where the value of the property is high as it is the best financial decision I would make.

Conclusion

In conclusion, there are difficult choices made whenever money is involved. I also had to put in my financial knowledge to come out with the best results out it. For example, I was able to consider costs I was incurring due to the decision I had made. I also had to look at the debt ratio, the assets I had, and how it influenced my financial decision at the moment. To decide to move from one point to another, you have to consider the current budget, the added costs you would incur in the move, and future costs (M Altuntas, J Rauch, 2017). 

References

AC Shapiro, P Hanouna. (2019).Multinational Financial Management: books.google.com

Baum, A. E., Crosby, N., & Devaney, S. (2021). Property investment appraisal. John Wiley & Sons.

Botzem, S., & Dobusch, L. (2017). Financialization as strategy: Accounting for inter-organizational value creation in the European real estate industry. Accounting, Organizations and Society59, 31-43.

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

J De Beer, IP McCarthy, A Soliman, E Treen.(2017). Managing Intellectual Property when crowdsourcing solutons: Business Horizons – Elsevier

J Gathergood, J Weber. (2017).financial literacy, present bias and alternative mortgage products: Journal of Banking & Finance – Elsevier

M Altuntas, J Rauch. (2017). Concentration anf financial stability in the property-liability insurance sector- glogal evidence: The Journal of Risk Finance – emerald.com

MC Dejaco, FR Cecconi, S Maltese. (2017). Key performance indicators for building condition assessment: Journal of Building Engineering – Elsevier

MZ Tauni, HX Fang, A Iqbal. (2017). Personality and Individual Differences – Elsevier

P Chandra. (2020). Fundamental of financial management- McGraw-Hill Education

 


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