FIN 6400: 332-001Dr. Karen Eilers Lahey
Personal Financial PlanningCharles Herberich Professor
3:15-4:30 T, TH, 146 CBAof Real Estate
Spring, 2007 217 CBA PHONE: (330) 972-5436
Office Hours: 1:00 - 3:00 THFAX: (330) 972-5970
7:00 - 8:00T
And by Appointment
Course Prerequisite: 6400: 301 (371) and 6200: 250 or 255.
Course Description: This is an elective survey course designed to provide you with a fundamental understanding of the major topical areas in personal financial planning. These include the personal financial planning process, personal balance sheets and cash flow statements, goal setting, career planning, and budgeting, tax planning, cash management, credit cards, consumer loans, home and automobile decisions, property and liability insurance planning, analyzing jobs and employee benefits, fundamental concepts in investing, investing in stocks, bonds and preferred stocks, mutual funds, investment real estate and other investment alternatives, retirement and education funding, life insurance and long-term care planning, and estate planning.
This is one of eight courses needed to meet the educational requirements for the Certified Financial Planner (CFP) designation. The other seven courses are:
1. 6200:410 Taxation for Financial Planning
2. 6200:430 Taxation I
3. 6400:301 Business Finance
4. 6400: 343Investments
5. 6400: 415Risk Management and Insurance
6. 6400: 417 Retirement Planning
7. 6400: 432Seminar in Financial Planning
The website for the CFP is (
Textbook: Vickie Bajtelsmit. Personal Finance, John Wiley & Sons, Inc., 2006.
Textbook Website:
UA Computer Account: My class rooster includes you university e-mail address. I will be sending you assignments and messages about the class using the university e-mail, and you will need to communicate with your classmates and me by e-mail. I expect you to become familiar with websites relating to personal financial planning and your textbook provides numerous sites for you to explore.
Calculator: It is assumed that you have a business analyst calculator which can perform NPV, IRR, and mortgage calculations.
Objectives of the Course: The objectives listed below are consistent with those of the Department of Finance and are stated so that you will understand the purpose and goals of the course.
1. Develop a working knowledge and understanding of the theory and practice of personal
financial planning, including terminology and concepts.
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2. Develop oral and written communication skills through oral presentations, written reports, class assignments, and participation in class discussions.
3. Develop analytic thinking, problem-solving, and decision making skills related to personal financial planning.
4. Develop a gestalt for assessing and resolving business ethics issues in personal financial
planning.
5. Understand the career opportunities available in personal financial planning.
6. Become proficient in the use of websites that provide personal financial planning
information.
7. Start a life-long understanding and practice of the fundamentals of personal financial
planning.
Final Grade Determinants: Your final grade will be based on the following weights:
1. First Midterm Exam 25%
2. Second Midterm Exam 25%
3. Final Exam 25%
4. Written Individual Financial Plan15%
5. Class Participation and Homework Assignments 10%
100%
If you miss either midterm, you will not be eligible for attendance points and you must double the final exam grade. You must take the final exam. I suggest very strongly that you make every effort to take all exams. The following grade scale will be used to determine a final letter grade in the course: A = 90 - 100, B = 80 - 89, C = 70 - 79, D = 60 - 69, and F = 59 and below. Pluses and minus will be determined at the end of the semester.
Attendance:
1. Class attendance will be taken at the start of each class.
2. It is your responsibility to let me know at the end of class if you came in late and missed the roll
call. No credit will be given after the actual class meeting date.
3. Extra points will be added to your final grade-point average on the following basis:
A. 3 points = attendance at all classes
B. 2 points = attendance at all but one class
C. 1 point = attendance at all but two classes
Individual Financial Plan:
1.You will be responsible for preparing a financial plan for an individual or married couple.
2. The report must be based on a real individual or married couple..
3. You must be able to obtain financial information to prepare a thorough report of present and future
financial status and goals, including financial status as of December 31, 2006, December 31,
2007, and December 31, 2012.
A. Cover sheet. The report will start with a cover sheet that contains a title that states it is a
financial plan for whomever the plan has been prepared on the top of the page. The bottom
will state your nameas the author, the course number, prepared for Dr. Karen Eilers Lahey,
and the date.
B. Table of Contents. The next page will be a Table of Contents with specific topic headings
and page numbers.
C. Introduction. The actual financial plan will start with an Introduction that describes the
demographics of the individual or couple for whom the plan has been written. Report on age,
martial status,schooling, and career path. Add any additional information you think would
behelpful.
D. Goals. Discuss short-term goals, intermediate goals, and long-term goals with specific dollar
amounts and time lines.
E. Personal balance sheets and personal cash flow statements. Discuss the personal balance
sheets that you estimated for 2006, 2007, and 2012 and thepersonal cash flow statements for
the same years. The actual balance sheets and cash flowstatements should appear in your
appendices along with ratio analysis. Discussion ofthese sheets, statements, and ratios are to
appear in the written portion of thereport.
F. Marginal income tax rate. Discuss both current and future marginal income tax rates and
their impact on the financial plan.
G. Cash management. Discuss the terms of the checking account and an other cash
management accounts now and in the future.
H. Credit cards. Discuss the terms of credit cards held, how many are held, and your
recommendations for present and future credit card balances.
I. Automobiles. Discuss current vehicles as well as future vehicles and their financing.
J. Housing. What is the current housing choice? When and what type of future housing choices
willbe made and how will they be financed.
K. Risk management. Discuss home and car insurance now and plans for the future.
L. Job and employee benefits. Discuss current and future health insurance benefits, disability
insurance, and retirement plans.
M. Portfolio asset allocation. Discuss current and/or future personal portfolio assets allocations
for stocks, bonds, investment mutual funds, investment real estate, and other investment
alternatives.
N. Life insurance. Discuss current and future life insurance policies in terms of type and dollar
amount.
O. Estate planning. Discuss living wills, power of attorney, and gift and estate taxes.
P. The final report will be at least 10 pages in length, double-spaced with standard one-
inch margins. The reference list must include at least 10 references.
Q. The individual financial plan is due Friday, May 4th, by 4 pm.
Individual Class Participation and Homework Assignments.
1. Specific individual assignments will be made throughout the semester in class and by e-mail.
They are due on thedate provide and they will be collected at the beginning of class.
2. For each assignment, you are to use a standard business memo format and the report should be
a minimum of one page in length. If the assignment includes a webpage, then you should
attach the appropriate pages from the website to your memo. Whatever the specific task, it
should be attached to the memo.
3. Each assignment will help you in preparing the financial plan due at the end of the semester and/or
become familiar with websites that you will be able to use now and in the future.
Course Outline
Jan. 16Course Introduction
Chapter 1The Financial Planning Process
Jan. 18Chapter 1Continued
Jan. 23Chapter 2Financial Planning: Tools: Personal Financial Statements and the
Time Value of Money
Jan. 25Chapter 2Continued
Jan. 30Chapter 3Goal Setting, Career Planning, and Budgeting
Feb. 1Chapter 3Continued
Feb. 6Chapter 4Income Tax Planning
Feb. 8Chapter 4Continued
Feb. 13Chapter 5Cash Management and Financial Institutions
Feb. 15 Chapter 6Purchasing Strategies and Credit Cards
Feb. 20No School – President’s Day Holiday
Feb. 22FIRST MIDTERM EXAM
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Feb. 27Chapter 7Consumer Loans and Credit Management
Mar. 1Chapter 8Automobile and Housing Decisions
Mar. 6Chapter 8Continued
Mar. 8Chapter 9Property and Liability Insurance Planning
Mar. 13Chapter 10 Analyzing Jobs and Employee Benefits: Health, Disability, and Retirement Plans
Mar. 15Chapter 10Continued
Mar. 20SPRING BREAK
Mar. 22SPRING BREAK
Mar. 27Chapter 11Fundamental Concepts in Investing
Mar. 29Chapter 12Investing in Stocks
Apr. 3Chapter 12Continued
Apr. 5SECOND MIDTERM EXAM
Apr. 10Chapter 13Investing in Bonds and Preferred Stocks
Apr. 12Chapter 13Continued
Apr. 17Chapter 14Mutual Funds, Investment Real Estate, and Other Investment
Alternatives
Apr. 19Chapter 14Continued
Apr. 24Chapter 15 Saving for Distant Goals: Retirement and Education Funding
Apr. 26Chapter 15Continued
May 1 Chapter 16 Life Insurance and Long-Term Care Planning
May 3Chapter 17Estate Planning
May ?TO BE ANNOUNCED FINAL EXAM DATE
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