Download Introduction to Financial Management

Personal Finance
Bill Klinger
Personal Finance
• Introductions
– Me
– You
• Syllabus
• Class procedures
• Class expectations
– A study showed that 83% of people who lost their job,
lost it because of attendance or attitude.
• Check out
– money.cnn.com Personal Finance tab
– investor.vanguard.com
Financial Decisions
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Should I buy a car or pay off my credit card first?
How big of a house can I afford?
What should I invest in?
Do I have enough insurance?
Will I be able to retire early?
Should I take the cash value or the annuity in the lottery?
Financial Planning
• Why bother?
• What is it?
• Do you need a financial advisor?
Financial Plan
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Budgeting and tax planning
Managing liquidity
Financing large purchases
Insurance
Investing
Retirement and estate
Budgeting
• Start with after-tax income
• Identify expenses
• Remainder is saving
• Opportunity cost
– What you give up as a result of a decision
• What are the opportunity costs of
– Buying an expensive car?
– An unlimited data plan for your phone?
– Buying Starbucks coffee every day?
• How much do you save?
Cash Flow
Income
saving
spending
“Cash”
Expenses
investments
deposits
credit
Retirement & Estate
Liquidity
loans
Financing
premiums
Insurance
investments
Investing
Financial Plan
• Goals
– Short
– Intermediate
– Long-term
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Current financial position
Alternatives / Options
Establish plan
Track your finances
• Revise as conditions change