Question

You are offered the following option:

You can have the government save or create your job at cost of $200,000 or the government will give you a lump-sum of $100,000.

Which option would you take? Why did you choose this option?

Answer 1

ANSWER: I will prefer to accept an offer for lump-sum of $100,000. Receiving a lump sum payout can be very exciting because it’s rare for me to have the opportunity to invest or spend a large amount of money at one time. Although for many figuring out what to do with a lump sum payout can also be very stressful, especially for those who aren’t comfortable in making financial decisions. Majority of people do not have the expertise or the wherewithal to track and predict the movements of the market but since I have good expertise on how much and where to invest thus will prefer a lump sum so that I can invest and earn more money. Indeed, financial literacy is strongly linked with good outcomes of an investment. A lump sum investment will be helpful for me when markets have fallen sharply due to technical factors, and it is expected that share prices will rise. I will diversify my investments into several sectors to ensure a regular steady income.