Options in Today's EconomyWhen dealing with finances, people can sometimes become too obsessed with making sure they make the perfect decision. This is completely understandable as no one wants to be the individual who makes the wrong decision. However, when working with finances, there are more variables to consider than just numbers. Of these variables, time is the most important one because it has a great influence on the growth of money. The other is flexibility, sometimes known as comfort level or risk tolerance. Considering all of these values ​​will help you make the best financial decision to raise business capital. There are basically two ways to raise business capital; using equity and using debt. Starting a business using equity capital means that you, the owner, have the financial capital/cash or resources to start the business or you can sell ownership interests (stocks) in the business to raise funds/capital. There are several ways to start a business using equity, but the disadvantages are:1. Financing entirely out of pocket means you assume the total loss if the business fails.2. If you are looking for investors, it is difficult to find the right people willing to invest.3. If you sell an ownership stake, you may lose some ownership of your business, and new partial owners can also contribute to decisions made in your business. Ultimately, equity financing can offer benefits to the entrepreneur such as:1. The freedom to run your own business debt-free, which has the added benefit of not paying interest on the cost of a loan or using credit to start the business.2. The risk of using stocks can be rewarded with immediately higher returns. Just as the time factor was mentioned every... middle of paper... eggs in one basket”. A person can reduce the risk of their investment being affected by a single event by ensuring they are not related to the same factors. Placing your money in different investment vehicles such as savings, stocks, bonds and mutual funds helps reduce the chance of a catastrophic event creating serious damage to your investments. In the textbook written by Ronald Melicher (2011), Introduction to Finance, it is stated that “The benefits of diversification are greatest when asset returns have negative correlations” (p. 233). The data shows the advantage of the negative correlation between stocks and Treasuries compared to the positive correlation of common stocks. This simply means that receiving a loss in one asset is potentially offset by a gain in another. Works Cited Melicher, R. W., & Norton, E. (2011). Introduction to Finance (14th ed.). Chichester: Wiley.