How do people like Warren Buffet and Howard Marks become famous because of money investments? How do people learn to save money, create accounts, and stay out of debt? What is the business cycle, and why is it so important to investors? The business cycle, is basically a graph of the economy as a whole, and has four stages. The four stages of the business cycle include: expansion, contraction, tough, and peak. In other words, the business cycle is like a producing cycle, and has a lot of different parts to complete before a good/product can be produced, manufactured, and sold to the public. The business cycle is not only important to investors, but to the public as well. The business cycle is essential to everyday life because it keeps an eye on the economy, but also lets the public know the current state of it. …show more content…
The business cycle is an essential part of economics, and also a huge factor of businesses, so what do investors have to do with it? Investors have paid major attention to the business cycle to let them know what state the economy is currently in, it also helps them use their money in a wise manner, so to speak. Investors and millionaires, such as Warren Buffet, Dave Ramsey, and others, learned to plan a budget to fit their needs. For example: if Dave had a savings account, and he saved $40,000 over a four year period specifically for a college fund in order to pay tuition. Instead of saving his money for tuition costs, he spent it on a new car. He is now $40,000 short on his tuition, which was due at the end of the month in order to get into the college of his choice. So how does someone like Dave, use the business cycle to his advantage? Dave then takes some classes on money management and learns to stay out of debt, saves the required amount of money within another four years and goes to the college of his choice, from this he can apply the business cycle into his