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  • Chapter 1

    Încărcat de

    abc123buddykoko
    11 vizualizări17 pagini
    The document outlines 10 principles of personal finance: 1) Knowledge is power - understand your financial situation and have a plan. 2) Put a plan together to reach your goals rather than hoping for success. 3) The time value of money is a powerful concept for long-term planning. 4) Taxes affect decisions so consider them for investments. 5) Plan for unexpected emergencies. 6) Differentiate needs from wants for smart spending. 7) Insure against major catastrophes you can't afford. 8) Risk and return go hand in hand over the long run. 9) Manage emotions to avoid big financial mistakes. 10) Start your financial plan

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    The document outlines 10 principles of personal finance: 1) Knowledge is power - understand your financial situation and have a plan. 2) Put a plan together to reach your goals rather than hoping for success. 3) The time value of money is a powerful concept for long-term planning. 4) Taxes affect decisions so consider them for investments. 5) Plan for unexpected emergencies. 6) Differentiate needs from wants for smart spending. 7) Insure against major catastrophes you can't afford. 8) Risk and return go hand in hand over the long run. 9) Manage emotions to avoid big financial mistakes. 10) Start your financial plan

    Drepturi de autor:

    © All Rights Reserved
    Descărcați ca PPTX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    11 vizualizări17 pagini

    Chapter 1

    Încărcat de

    abc123buddykoko
    The document outlines 10 principles of personal finance: 1) Knowledge is power - understand your financial situation and have a plan. 2) Put a plan together to reach your goals rather than hoping for success. 3) The time value of money is a powerful concept for long-term planning. 4) Taxes affect decisions so consider them for investments. 5) Plan for unexpected emergencies. 6) Differentiate needs from wants for smart spending. 7) Insure against major catastrophes you can't afford. 8) Risk and return go hand in hand over the long run. 9) Manage emotions to avoid big financial mistakes. 10) Start your financial plan

    Drepturi de autor:

    © All Rights Reserved
    Descărcați ca PPTX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    din 17

    1

    Chapter 1

    Chapter 1
    THE FINANCIAL PLANNING PROCESS

    Pieces of your financial pie

    Emergency Savings Goals


    Knowing
    Estate
    yourplanning
    current state (Net worth and cash flow)
    Financi
    plan
    Plann for the long term financial al
    independence
    Credit
    Investment

    Taxes

    Insurance

    3
    Chapter 1

    Ten Principles
    of Personal
    Finance

    Principle 1:
    The best Protection is Knowledge
    is power

    Chapter 1

    Knowledge

    Principle 2:
    Nothing Happens Without a Plan

    5
    Chapter 1

    Wonder

    in the fog and hope for success

    Or
    Put

    a plan together on getting to your location

    Principle 3:
    The Time Value of Money
    concept

    Einstein

    is purported to have said it is

    The most powerful force in the universe

    Chapter 1

    Key

    Know

    the effect of taxes on the rate of


    return of investments.

    Compare

    investment alternatives on an
    after-tax basis.

    Understand

    tax laws.

    7
    Chapter 1

    Principle 4:
    Taxes Affect Personal Finance
    Decisions

    Principle 5: Stuff will happen!

    8
    Chapter 1

    Plan

    for unexpected events and emergencies

    Chapter 1

    Principle 6:
    9
    Waste Not, Want Not- Smart Spending
    Matters

    Differentiate needs vs wants

    Principle 7:

    Chapter 1

    1
    0
    Protect Yourself Against Major Catastrophes

    Insurance

    is there to pay when you cannot


    afford to do so

    Principle 8:
    1
    Risk and Return Go Hand in Hand 1
    is on your side

    Chapter 1

    Time

    Chapter 1

    1
    Principle 9:
    2
    Mind Games Your Financial Personality,
    and Your Money
    Fear

    and greed = Big financial mistakes

    Principle 10: Just Do It!

    Really

    now will make a big difference

    Chapter 1

    Starting

    1
    3

    worry about such things now?

    Age

    happens. It is likely many of you will live to


    age 100 or more

    Maybe

    you will not want to, or be able to work


    until then

    Financial independence 2050 style


    Self funded!!
    Personal assets will be the primary source of income

    Personal Assets

    Employment income

    20 . . . . . . . . . . . . . . . . . . . . . . .. . . .
    . . . . . 60

    Earning years

    $
    Pension income
    Social ?
    Security
    ? ? ?Income
    ?

    Employment
    Income

    60 . . . . . . . . . . . . . . . . . . . . . . . . .
    . . .100+

    Retirement years

    The Planning Process

    1
    5
    Chapter 1

    Your personal plan

    Establish

    your financial goals


    (Worksheet 1)

    Short-term- Within 1 year

    Intermediate-term- 1-10 Years

    Long-term- More than 10 years

    Prioritize

    your financial objective


    (Worksheet 2)

    Chapter 1

    Step 1-

    1
    6

    Worksheet
    1

    1
    7
    Chapter 1

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