BM 418 Financial Planning Syllabus

Financial Planning

Business Management 418 Sections 1 & 2

Winter Semester 2012

Professor: Bryan Sudweeks, Ph.D., CFA

Office: 666 TNRB Phone: 801-422-1764, E-mail:

Teaching Assistants: Joel Castro, Phone: 650-269-1736 (before 10 PM), E-mail: , Zachary Smith, Phone: 801-380-2321 (before 10 PM), E-mail: n.zacharysmith @gmail.com.

Class: Tuesdays and Thursdays:

Section 1: 8:00 to 9:15 a.m., 284 TNRB

Section 2: 12:30 to 1:45 a.m., 280 TNRB

For Majors Only, Prerequisite: BM 301 or instructor approval.

Office Hours: Office hours are Mondays and Wednesdays from 2:30-4:30 p.m. The first hour, from 2:30 to 3:30 p.m., is for scheduled appointments only . Please use the signup sheet outside my office or we can arrange a time via email. The second hour, from 3:30 to 4:30 p.m., is for walk-ins. Please note that I am happy to discuss any personal or family related personal finance issues or job related questions during regular office hours.

Required Text: Please purchase the BM418 packet from the Bookstore, which includes the e-book Personal Finance: A Complete College Course Manual, (Sudweeks, September 2011), Teaching Tools, and Required Readings. I encourage you to use Quicken, Mint.com, or other budgeting software. You can get a printed copy of the ebook at the BYU Bookstore for a nominal printing fee.

In addition to materials on the CD, the eBook, PowerPoint slides, readings, Learning Tools, and Class Summaries can also be found at the Marriott School Personal Finance website at .edu. Quizzes, grade reporting, and quiz answers are found only on Gradebook only.

Warning: This class requires more time than a normal 3 credit hour 400 level class because of my desire to help you prepare for your financial life ahead. Please plan your schedule and your time accordingly.

Catalogue Course Description:

BM 418 Financial Planning: Applying financial principles to household decision making, stressing integration between areas. Income tax and estate planning, retirement, investments, portfolio management and risk management.

Extended Course Description:

This class provides a hands-on opportunity to understand and apply the key concepts and ideas of financial planning as a precursor to getting your own financial house more in order and to help you as you prepare to help and teach others. We start with a gospel-centered perspective to this important topic. This adds a critical dimension to our understanding of personal financial management—it gives direction in certain key areas. We then discuss and evaluate the key areas in financial planning, including careers in the industry. We give you the opportunity to utilize this information by preparing your own Personal Financial Plan (PFP), as well as teaching others specific concepts of this important area.

Course Purpose:

The purpose of this course is to help you plan and prepare for not only a successful career, but a successful life as well. There is more to life than your career. You will be very disappointed in life if you achieve your financial goals at the expense of your personal and spiritual goals. Likewise, you will be disappointed in life if you fail to steward your resources to the extent you are not able to accomplish your personal goals due to the lack of financial resources. In this class we will show how the financial decisions you make impact your abilities to achieve your personal and spiritual goals. President Gordon B. Hinckley wrote: “Without preservation and cultivation of the things spiritual, our material success will be as ashes in our mouths” (Standing for Some thing, Times Books, New York, p. 112).

If you married, I strongly encourage you to work with your spouse as you learn the material and develop your personal Financial Plan (PFP). Encourage your spouse to participate in the learning of this material, and seek his/her help in the preparation of your personal Financial Plan (your spouse can help do the work and you get the credit!) A recommended reading schedule is available for spouses and friends at the end of your Class Schedule. Readings are all available free of charge on the internet. I also recommend you do the Service Teaching by teaching your spouse areas you think important.

Intended Learning Outcomes:

While we will cover a large amount of information in this class, my overall objectives for you are fourfold. Individually, I want you to:

1. K now what you want to accomplish in life . Write it down. You must individually set your own personal goals and objectives, and write them down. These are your future “yeses” in life so you can say “no” to the daily temptations to spend.

2. D evelop and live on a budget . Live below your means. Budgeting isn’t constraining—it is liberating. It helps you to spend your resources on what is important to you—your goals. Set and live by your budget.

3. P ay the Lord first and yourself second . Save and invest your money wisely. The key is to put your priorities in order—to always pay the Lord first and yourself second. But paying yourself is not sufficient—you must learn to save and invest your money wisely. To do this you must review the basics of investing, invest wisely, and then discipline yourself to set aside and invest a portion of your gross income every month from the day you graduate (and I recommend 20%).

4. L earn to giv e . If you cannot learn to give when you are poor (which is now), you will never learn to give when you are rich. Someone said “We make a living by what we get, but we build a life by what we give.” Giving is not determined by your checkbook, but by your heart.

The rest of the class is just to help you become a wiser financial steward by giving you the perspective and tools to help you make better financial decisions in regards to saving, investing, insurance, tax planning, home and auto purchases, etc. Then once you have developed your own Plan, you will have the framework to help you work with and help others. In this class we don’t “learn to teach,” but “teach to learn.”

Since this class is more than a just personal finance class, we need to add to these objectives as some are looking at possible careers in financial planning. In addition, you will:

1. D evelop and use a framework for financial planning. This framework, if followed, will help you not only make wise financial decisions and maintain control of your finances, but also give you a framework as you teach others. It’s not what you earn, but what you save after taxes and inflation that makes you wealthy.

2. U se this knowledge and information to create your own Personal Financial Plan. Your personal financial plan is your financial roadmap for life. The better and more thoughtful your Financial Plan and the more willing you are to follow it, the more likely you will be to achieve your personal and financial goals once you leave this class. This Plan, if done carefully and thoughtfully, will likely be one of the most important projects you will complete here at BYU.

3. Develop a methodology to help teach these principles to family and friends. Personal Financial Planning is a key area, not just for students, but also for everyone. My goal for you is not just learn the material, but to learn how to teach the material and to assess learning. I want this knowledge to extend beyond the classroom. You will hopefully become the financial experts for your future Wards and Stakes. As such, you will be responsible for contributing to the learning in this class, as well as the assignment to teach others through your Service Teaching.

Once you have a rough idea of your personal and career goals, we will then work to understand financial management and planning as it is applied to important household and personal topics. The general approach will be to help you to be better and more effective stewards over your resources. To do this we will examine important areas that affect household wealth such as:

1) Measuring financial health

2) Informed budgeting and debt reduction strategies

3) Income tax planning

4) Managing consumer credit

5) Acquisition of big-ticket items (home, automobiles, and education)

6) Insurance and risk management

7) Investment strategies and asset allocation (stocks, bonds, annuities, and mutual funds)

8) Retirement planning, and

9) Estate planning.

While your personal and financial goals will change over time, my purpose is to help you build a framework to help you as you go through your life so that you might attain your personal, family, career, and lifetime goals.

Learning Activities:

Classroom Activities. We will use a lecture and discussion format, supplemented by case studies and guest speakers as the major method of teaching in this class. This requires all of us to come to class prepared to discuss, request clarification, and answer questions of the assigned reading materials. My role will be to help you to understand, to expand upon, and put in perspective the assigned readings and class topics. Your role is to read the material, listen, ask questions, contribute, and apply it to your life. Unless you ask questions, I will assume you understand the material. I have found that students generally get out of this class what they put into it.

This approach requires a maturity and commitment on your part to regularly read your assignments before hand and be prepared for class discussion. You are responsible for everything done in class, as well as for all study assignments. If you miss a class, it is your responsibility to find out from a classmate what we did in class, any changes in schedule, etc. Keep current on your notes as we may find we need either more or less time on certain chapters and the reading assignments may have to be adjusted in class.

Your Personal Financial Plan. Each of you will create and develop your own personal Financial Plan—your financial roadmap for life—during the semester. At the end of the semester, you will turn in your PFP for grading. Templates and a grading key for this Plan can be found on the web site (TT1A-1F) and on the class CD. This Plan can be thought of as a summary of the major sections of the course, or as your own personal road map to financial and personal success. This is a critical part of this course, and failure to hand in this Plan will result in a grade no higher than a C. Two examples of complete financial plans are found on your CD and on the web site (TT2A, TT2B).

Key to your personal Financial Plan is your own personal and financial goals. Please note that I will not be grading your goals; rather, I will be grading the effort you have put into developing and articulating those goals. Since effort is subjective, you have the option to grade your goals before you hand them in, with the final grade being a weighted average of 30% your grade and 70% mine.

The format for the Plan should include your current situation, i.e., where you are now, and your action plan, where you should be and how you intend to get there for each section. For example, if the topic is life insurance, you would discuss in detail what life insurance you currently have, your company, limits, riders, etc. Your action plan would include what insurance you should have (if it is different from your current policy), and what you plan to do to get adequate life insurance coverage. The key is what you need to do, and that is covered in your action plan. Please note that there is a separate Table of Contents for international students.

The Plan should be typed, formatted as instructed, well organized, include applicable spreadsheets, and be helpful to you as you leave the Business School. A template for the format of each section and examples of completed financial plans is on your class CD and the Marriott School personal finance website, under the learning tools section (TT01 and TT02). There is no specified length for the Financial Plan. A Table of Contents (TT01) is at the back of this syllabus as well as on the Personal Finance website. I strongly encourage you to work on your Financial Plan with your spouse, parent, or trusted friend. In addition, I strongly encourage you to start working on it now and not put it off until the end of the semester.

Because of the detail and complexity of your Financial Plan, I have set up multiple due dates, as noted in the syllabus. Since my goal is to help you complete a Financial Plan we are both proud of, I encourage you to work on it every week. If you wait until the last minute, you will find it difficult and time consuming. Late PFP’s lose 20% per day.

Any sections handed in before the due date will be pre-graded and returned to you. One advantage of pre-grading is that if you did not get full credit, you can make the indicated changes and resubmit the section for full credit before it is due. Once a section is graded (it will not show on Gradebook), it still must be included in your Financial Plan, but it will not need to be re-graded once the Plan is handed in at the end of the semester. Items handed in after the due date, or items handed in for re-grading after the due date, can receive back 50% of the points missed. It is strongly recommended that you take advantage of this opportunity to have parts of your Plan pre-graded!

Service Teaching. Since my goal is for you to become better teachers, as part of this class you will find an opportunity where you can share a part of the things learned in this class with others. We “teach to learn” in this class, not “learn to teach.” You will develop an outline of what you are to teach, prepare using PowerPoint or other presentation software, present it to your friends/family, and then write up and hand in the results of that presentation. You will document what you taught, who you taught it to, the results of that teaching experience, any learning outcome that the individuals made from your presentation, and what you would do differently next time. Instructions on Service Teaching are available on your class CD.