Trust and Household Finance Term Paper Example | Topics and Well Written Essays - 1000 words

Trust and Household Finance - Term Paper Example Research has it that the enhancing of individual trust to the right amount can improve the well-being of household finance. 1.0 Introduction Recent statistics have brought it to light that more than a third of the American adults who are approaching their 50’s have no retirement plan. They have also shown that more than half of the households in the country do not own any stock. It is very important to know the determinants of decisions in household finance. This is essential in the management of debt. This paper shows that trust is a major factor that affects the management of household finance. Trust is the fundamental confidence that is found in an individual towards others in return for something that was promised. A casual impact on trust is inflicted by an individual’s cultural background and early life experiences on the value of the trust. A trusting individual is many times more likely to put up investment in the financial markets in the belief that they will o btain a fair return on investment, and this encourages the individual to invest. Trust should thus promote investments. Trust also promotes responsible borrowing since when an individual is trusting then he or she is also taken to be trustworthy. Trusting individuals are thus expected to make more real and financial investments, they are also expected to comply with the financial contracts that they enter and avoid on taking excess debts. Because of this, an individual will save more and have better management of debt and their net worth will increase. Negative financial outcomes can greatly affect an individual’s level of trust. Trust has dynamic dimensions that arise from cultural influences and experiences in life. The extent, to which an individual trusts another, embodies in the core values that are inherited from family, religion, cultural and ethnic backgrounds, and are influenced by the individual’s life experiences and the characteristics of the community memb ers whom the individual interacts with in life. This are called the non-economic factors of trust. Prior literature has had it that these non-economic aspects of trust play major roles in financial decision making, in households. 2.0 Motivation and Hypotheses 2.1 Trust and Economic and Financial Decisions: Individual Level Evidence Research has shown that trust has appositive effect on the aggregate political and economic phenomena. It has shown that a higher level of trust in a region or nation is correlated with more economic investments and growth, less corruption and higher tax compliance among many other issues. Few studies have been carried out on the effect that trust has on the outcomes of the economy at the individual level (Jiang & Lim 1). Though these studies show that trust has a positive effect on the monetary and economic well-being of an individual, they fail to offer a comprehensive analysis of the effect that trust has on household finance. None of these studies ana lyzes the effect of trust on debt management (Jiang & Lim 8). 2.2 Hypothesis Development Trust is very likely to play a role in economic activities where transactions take place over a given period and an individual need to rely on the future and the observable actions of other people, such as their saving and investment decisions (Jiang & Lim 2012). Prior studies have shown that individuals who have the aspect of trust participate more in the

Puerto Rico History Essay Example | Topics and Well Written Essays - 500 words

Puerto Rico History - Essay Example The most significant among such encounters were the wars fought between Spanish territorial invaders and Americans (History). The continual aggression of these forces resulted in the slow elimination of Tainos culture by the end of 16th century. By the end of 19th century, the continually fought Spanish-American wars concluded with Americans claiming the control of Puerto Rico (Puerto Rico). The control of Puerto Rico by Americans started bringing considerable changes to the socio-economic and political conditions of Puerto Ricans. The stage was set for modernization and started creating a congenial atmosphere of American commercial growth plans. The initial step in this direction was rationalization of currency of Puerto Rico(Puerto Rico). The development and implementation of uniform polices for the government employees which included stipulated working hours of eight hours a day, along with the enforcement of freedom of assembly, speech, press and religion. In addition, steps to improve the educational system was initiated by starting public school and extended the US postal service to this island (Puerto Rico). The better transportation was planned, highways extended and bridges constructed across major rivers and canals to enhance the development. The better health care systems started reducing the child mortality rates and controlled various endemic diseases. The period also showed creation of new political parties - Republican Party and American Federal party (Puerto Rico). In order to get more democratic rights a new political party called Nationalist party was founded in the year 1922 (History). Being more politically aggressive, Nationalist party started intensifying its protests by boycotting the various collective political exercises. This resulted in distancing the party from the existing authorities. This led to the incident