Overview of the financial professional (local loan lender)

Overview of the financial professional (local loan lender)

Who is XXXX, and does he do and which area he specialize in?

XXXX is a manager of the Smart Money bank who is dedicated to offering loans to young people as well as advising individuals on the saving, investment, credit cards, and retirement. I work with the schools, specifically the higher education institutions in the United States, specifically in Texas.

XXXX has the knowledge and ability to explain deeply on financial issues and thus thought to learn about the issues that most young people have while borrowing or paying loans.

1. Advice from their perspective

What are the biggest mistakes that college students/young adults make when borrowing or paying loans?

My interviewee stated three major problems with the young adults is that they rush to buy homes, borrow money to do a wedding and not to take a health insurance cover. He explained that among the United Stated generation, owning a home and doing a grand wedding is the pride and dream of every young person. Whenever they find a chance to do it, they will go for it irrespective of the strategies used. Likewise, he stated that the chances of the young adults t take health are very minimal since they fall ill rarely. And thus when they get old, attacked by serious diseases are get accidents, that is the time they rush for the health cover.

Consequently, young adults feel the concept of owning a home is important since it is generally an “American dream.” Besides, owning a home gives one an opportunity to build equity. In this case, the equity is the probable market value of the home deducted any liens against property, such as a mortgage. Also, owning a home saves money that would be used to rent a house monthly. Likewise, weeding holds great value to people of unites state us to signify lifetime commitment to another partner. The culture of the whites believes a white wedding is more blessed than other types of engagement. Unfortunately, the young adult does not cover their lives with health insurance since it is stressful to load the health cover with money which could be used to settle something “more meaningful.”

During the interview process, Mr. XXXX narrated a story to me to emphasize the importance of the above concepts. “On January 14th, 2016, there was this young man Caleb who came from a rich family that lived in New York City. On this fateful day, the family held a big engagement party for their son, who wanted to marry a girl from the neighbor family. At the cause of celebration, the house, which was merely a month old, collapsed, claiming the lives of half of the people while the rest sustained injuries. The hospital, as well as the family, had a difficult time since none of the family members had a health insurance cover. The resultant action waste the family had to sell almost all their properties to cover the hospital bills.”

Action steps/take away messages

At the end of the conversation, Mr XXXX asked me to think about two questions. First, what would have happened if the family did a simple engagement at dinner time without involving lots of friends? Secondly, do you think the family would have gone back to the state of poverty if they had a health insurance cover for every member? The finance professional believes that I should consider these questions since he believed that there is nothing more meaningful than a healthy life.

Reflection of the experience

From experience, I learned that before taking any action most specifically concerning money, one should consider the time required, money, and commitment to make a precise decision. Also, one should not mix emotion with money, especially taking a loan to fund a wedding ceremony. Thus, as a student, it is important to follow a good decision-making process, which consists of gathering more information about buying a house or holding a wedding and assessing alternative resolution such as opt to have a health cover insurance to avoid making mistakes that can cost a lot.

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PART B: Apply Solutions to Real Life Issues

Individual identification

Under this case, I will consider three individuals who are Mark, Virginia, and Emma. Mark was my father’s best friend until last year when their friendship fell off. Virginia was my roommate in the previous school and a friend during school days. Emma is my aunt, who lives in New York with her family of two boys and a nanny. She is working a single working mum and thus leaves her two boys under the care of the house manager.

Individual Stories

Mark, a former friend of my father, lived across the street to our house. He was a humble man with a humble family from a middle-class social status. Five years ago, his wife Karen was diagnosed with a brain tumor was admitted almost immediately to undergo head surgery, which she recovered successfully. However, the mark did not have health insurance to cover his family. The only option left for him is to take an unsecured loan from the local bank of New York. Now the deadline for loan repayment is near, and the bank has already warned mark to evacuate the house in the next two weeks’ time. Likewise, Virginia, my previous roommate had financial challenges way back from her humble background. She was in school under the scholarship of which only covered her education expenses. That is, her personal expenses were her responsibility. Nonetheless, Emma, my aunt, did not have any formal occupation she could rely on to get a salary monthly. Instead, she depended on daily jobs, which she was offered by the production company nearby. Her irregular financial flow challenged her living standards since what she got was as little as nothing was left to save after daily expenses.

Financial Solutions

One financial solution that mark could utilize to escape the loan debt is to increase the monthly salary from his place of work. Mark can ask his/her employer to allow him to work overtime for an increased salary. Paying a loan with minimum payment could lead to accumulation of the interest in which by the time he is paying the last installment, the mark will have paid triple or double the amount. Consequently, if Mark has more assets, he could surrender one of his house, car, or land, sell it, and pay the loan (Irby, 2019). Afterward, a mark should ensure that he register for the health insurance for his family.

Consequently, Virginia, my former roommate, could not afford to pay all her personal expenses. One technique that Virginia should take is to create a budget for the money she gets from her parents as well as from the work-study program. Virginia’s weakness is that she misuses the little she has by buying new clothes and shoes to match her friend’s standards. Through the creation of the budget, Virginia will be able to allocate the funds to use in expenses such as books, toiletries, entertainment, and food, among other bills (Krulick, 2020). The left balances, she should keep it safe for emergency purposes.

Nevertheless, my Aunt Emma can utilize the many financial tips, such as controlling the finances through minimization of the costs. First, Emma needs to reduce costs by firing a nanny whom she pays $50 per month. Secondly, Emma can take the two boys to her mum, who lives alone. Through the technique, Emma will have the chance to save the little she can until she becomes stable to take care of her two kids (Pinjisakikool, 2018).

Since we did not have a conversation with the individuals, I anticipate that the conversation would have gone well since everyone in such a situation desire advice on how to get themselves from the problems. If the individuals are willing to save their money and properties, they will find the solutions right. To the above solutions effective, personal contribution is a key element. I have learned from experience in financial management relies heavily on the decisions we make.