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Ways in Which Couples can Seek to Reduce Taxation Liabilities on Investments and Savings. - Essay Example
Finance & Accounting
Pages 11 (2761 words)
The need for financial security and independence are a predominant concern for most citizens globally. In its very definition the ability to earn and willfully spend one’s income is at the core of maturity as defined by social norms…
This is also the case for governments and institutions. So the question is therefore how such a financial stability can be achieved? The most obvious answer to this is by investing. Investing refers to the deliberate and calculated directing of funds into revenue generating activities. Almost invariably not all individuals are born into financial security. As a result they must therefore find ways to channel their finances such that they can grow significantly unto the future. Usually investments are made directly out of savings; savings out of personal income. The economic model for this relationship is given as i 0 f (s); s f (y). This therefore means that investments are a consequence of foregone present consumption of personal income. This may perhaps be the elusive point to most young people eyeing for immediate financial prosperity without the sacrifice of and discipline regarding present consumption. After the establishing the origin of investments, a need arises to examine what the deciding and influencing factors for investments are. Economists present a direct relationship between investments and the interest rates for the underlined security i.e. i f (r). Both households and institutions will make their investment decisions based on the expected rate of returns as expressed in relation to the prevailing interest rates in the market. ...
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