Cents Ability

I came back to Centability this week after a little hiatus. Two weeks ago, the teacher was absent and last week I had to host an event at Hunter. The material  I covered today was on advanced investments. Specifically, I spoke about asset allocation and why we diversify our assets. But before I dived into the complex details, I tried to ask the students why we need to invest in the first place. In line with what we had taught them in previous classes, they suggested that we needed to invest to meet our goals. While this was certainly true, I imparted that there was an even more basic reason behind investing. Quite simply, we are just not going to be able to work for the rest of our lives. Many of us wont work passed when we can start receiving social security at sixty-five. So without an income, the question then becomes do you want to live off your social security or do you want to live a comfortable life? If you answered the latter, then chances are that you are going to need to invest because just keeping your money under your bed isn’t going to do the trick. I also spoke about how diversification allows you to lower your investment risks. Say you only invested in Microsoft stock and then one day it was revealed that Microsoft had been cooking the books and the company went under? There goes your life’s savings. Wouldn’t it have been smarter to invest different companies, foreign markets or in different types of assets? Yes. While I went into greater depth about these two topics, this was the gist of what I spoke abut. And for the first time since I started working with Centsability, I felt that the students were really engaged. I am excited for next week’s lesson on the stock market.