Course Outline and Notes

Course outline and notes

Personal Finance

Bob Donchez

CUBIC

May 2015

Course Objectives

This course introduces the student to the concepts, tools, and applications of personal finance and investments. It assumes little or no prior knowledge of the subject and focuses on helping the student understand the key elements of the financial planning process. This includes:

• Basic concepts and terminology of personal finance;

• The planning process--assessing your current financial position, defining financial goals, developing a plan of action, implementing the plan, reviewing and revising the plan;

• Retirement planning as a special topic;

• Key concepts and practices in investments, including a review of securities;

• The role of insurance in financial planning.

Methods of student involvement

•  Soliciting and addressing individual student questions, problems, and situations--questions always welcome.

•  Questions

– Introduce topics and concepts

– Solicit opinions for discussion

– To work simple problems

•  Team and individual exercises highlighting key topics and concepts

•  On-line resources

– In class demonstrations

–  Provide key on-line links

Outline of Topics

1) Personal finance and the financial planning process

•  The case for learning personal finance

•  Personal finance topics

•  Soliciting student issues

•  Basic approach to personal finance

2) Assessing current financial position

•  Rationale for establishing financial position

•  Personal income statement and budget

•  Personal balance sheet

•  Current investment asset allocation

Case 1: Complete a budget

3) Basics of personal taxes

•  Taxes we pay and income tax structure

•  Deductions and exemptions

•  Capital gains/losses

•  Determination of taxable income

•  Filing taxes

4) Protecting your financial plans and goals: the use of insurance

•  Rationale for insurance

•  A review of insurance vehicles

•  Emergency cash

•  Auto/homeowner/rental insurance

•  Disability insurance

•  Health insurance

•  Life insurance

Case 2A: Review health insurance policies on-line

5) The role of debt and managing personal debt

•  Types and forms of personal debt

•  Use and role of personal debt

•  Debt examples and time value of money

•  Credit reporting and options managing debt problems

Case 2B: Conduct a personal credit check

6) Setting and achieving personal financial goals

•  Typical financial goals

•  How to achieve financial goals

•  Time value of money

7) Planning for retirement

•  Introduction/approach to retirement

•  Retirement tax shelters

•  Social security and Medicare

•  Retirement cash flow models

Case 3: McMurtrey financial planning

8) Investment concepts, principles, and tools

•  General approach to investing

•  Investing terms and concepts

•  Overview of securities

•  Investment styles

•  Active versus passive styles

•  A review of on-line resources

Case 4A: Determining asset allocation and investing a $200,000 portfolio

9) Wrap-up

•  Putting it all together

•  A look at financial planning software

•  Resources

Case 4B: set up a Mint account