Being a financial student wasn't my first option.

I've always been attracted to arts

and psychology, but due to financial deprivation, I pursued the course, which will be a
great demand in the future. During my time at the University of Mindanao, most subjects
concerned the management of financial resources, where to get sources of funds, and
how to maximize your current money. In the Financial Management subject, handled by
professor Romeo G. Pajigal, we've discussed a few things that I've been meaning to retain
in my mind and apply in my daily life. Financial Management is essential in any
organization concerning investment, economic, and dividend decisions. According to
Prachi Juneja, an activity that involves planning, organizing, directing, and controlling
financial activities, such as the acquisition and use of an organization's funds, is known
as financial management.
In finance management, its primary goal would be maximizing the owner's,
shareholders and the company's wealth. With this, there are lots of factors that can help
contribute to the maximization of a company's wealth, such as investment and debt
financing. Investment is one of the best alternatives for the maximization of funds.
Although, this should apply diversification to protect your business from leaning toward
bankruptcy. Chris Lutz once said that the purpose of diversification is so that when one
investment goes down or not doing so well, you are insulated from the result because of
the others you have in place. It's like not putting all your eggs in one basket because once
it falls, everything in it will be gone all at once. To support my thoughts, Warren Buffet
said that when investing, "Do not put all eggs in one basket." In terms of debt financing,
I've been wondering how making loans could help you grow your money where it would
be another payable that needs to cash out funds from the company. However, I realized
that debt isn't bad when Stuart Wide said, "Knowledge is power. The more knowledge,
expertise, and connection you have, the easier it is for you to make a profit at the game
of your choice." It means that if you know what you're doing and you can foresee every
decision you make, it will lead you to success. The same as companies who have been
loaning in the bank to fund their projects and operations when the equity capital is not
enough to conduct the said activities. Especially when in need of expanding operations,
replacing or upgrading equipment, purchasing inventory, and hiring and training new staff
instead of sucking out all the owner's money. It's better to ask for the public's funds
through debt when you're confident to pay it back in time, even if interest rates get in the
way (Carlson, 2022). Rich people borrow money because the interest is low compared to
the company's profit. The bank also allows them loans since their business is doing well
and they're confident to pay their debt.
More so, the value of money today will differ the following day due to inflation and
the exchange of currency, as well as interest. Hence, money loses its value over time.
This context may sound alarming, as we live in an unstable economic state where
inflations have caused much trouble to middle and low-income families. However, the
time value of money changed my perspective as it gives us hope that we can still do
something to prevent being deprived. As mentioned by Abinaha in her blog about the
importance and concepts of the Time Value of Money, it is one of the fundamental ideas
in capital budgeting. Managers of businesses find it simpler to adjust their cash flows over
time, and discounting on the current value is the term used for this. The article explains
why earning money today is preferable to receiving it tomorrow. As such, it's brilliant to
compromise with the current situation by investing our cash today, knowing its value will
increase over time. It will be a sure win for us then, only if we learn how to allocate and
use our money effectively.
Another thing about the lesson I'm interested in is the Opportunity Cost and Sunk
Cost. Jason Fernando (2022) defined Opportunity Cost as the forgone benefit that a
business, an investor, or an individual misses when selecting one alternative over
another. It implies the idea that you can't have everything. There will always be a scenario
where you'll have to choose the best alternative even if there are some good things from
the other option you would have to derive if desired. It is because every organization,
even individuals, will have to weigh their choices. With the value of opportunity cost, we
are guided to make profitable and sound decisions that will determine the future of your
welfare. Meanwhile, Sunk Cost is the money already spent but can no longer be
recovered (Tuovila, 2022). While sunk costs are often not taken into account by
companies since they seem unrelated to present and future budgetary concerns, it helps
me understand how important it is to know where you spend your money.
There are still a lot of topics that I'm grateful to have learned of, but I'll be focusing
on the things that have significantly impacted my perception of finance. These things
astonished me so much that I had to take a risk if I wanted greater returns. Also, while
making my reaction paper, I read about Warren Buffet, and he instantly became an
inspiration to me. He always gives the most meaningful advice regarding earnings,
spending, savings, investment, expectations, and taking a risk. He once said, "Never test
the depth of a river with both feet." It made me realize that you'll never know how far you'll
go if you won't take the risk of pushing yourself off your limits. Many may say that money
is the root of all evil, but it can only be harsh when appropriately used. In this era of
survival, we should all learn how to conserve, allocate, manage, and utilize our financial
resources for sustainability and growth.
References

Financial Management - Meaning, Scope, Objectives & Functions (managementstudyguide.com)

5 Reasons You Might Want To Take Out a Business Loan (thebalancemoney.com)

Importance of Time Value of Money | Time to Understand TVM (openeducationportal.com)

Stuart Wilde Quote: “Knowledge is power. The more knowledge, expertise, and connections you have,
the easier it is for you to make a profit a...” (quotefancy.com)

Investment Diversification Quotes: top 7 quotes about Investment Diversification from famous authors
(morefamousquotes.com)

Sunk Cost (investopedia.com)

Opportunity Cost Formula, Calculation, and What It Can Tell You (investopedia.com)

Warren Buffett Quotes On Leadership. QuotesGram