个人理财英文版第一章

1-3
Advantages of Financial Planning
• Increased effectiveness in obtaining, using, and protecting financial resources • Increased control of your financial affairs • Improved personal relationships • Sense of freedom from financial worries
1-4
Identify Social and Economic Influences on Personal Financial Goals and Decisions • Life situation and personal values • Financial planning in our economy
1-8
Financial Planning in Our Economy Inflation
Inflation = in the general level of prices
•Reduces buying power of the dollar •Most harmful to those on fixed incomes •Inflation rates vary •“Hidden inflation” •CPI = a measure of inflation
– Major impact on financial planning
1-10
8 Basic Financial Planning Activities
• Obtaining • Planning • Saving • Borrowing • Spending • Managing Risk • Investing • Retirement/Estate Planning Chapter 1 Chapters 2, 3 Chapter 4 Chapter 5 Chapter 6, 7 Chapter 8-10 Chapter 11-13 Chapter 14
Financial
Opportunity Costs (Interest, liquidity, safety )
1-15
Time Value of Money
• Increase in an amount of money as a result of interest earned
– Saving today = more money tomorrow – Spending today = lost interest
$500
X
6%
X
1/2
=
$15
1-18
Future Value
• The increased value of money from interest earned • Amount to which current savings will increase
• Total amount available in the future
1-14
Opportunity Costs and Financial Trade-Offs
Personal
Opportunity Costs (time, effort, health)
Financial Acquisitions
(car, home, college education, investments, insurance, retirement fund)
Chapter 1
Personal Financial Planning in Action
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Personal Financial Planning Objectives 1. Identify social and economic influences on personal financial goals and decisions 2. Develop personal financial goals 3. Assess personal and financial opportunity costs associated with financial decisions 4. Implement a plan for these decisions
1-2
Financial Planning
• Process of managing your money to achieve personal economic satisfaction • Financial Plan:
– Formalized report – Summarizes current financial situation – Analyzes financial needs – Recommends future financial activities
Time Period
=
Interest
1-17
Time Value of Money
Interest Calculation Example
$500 on deposit at 6% annual interest for 6 months: Principal = $500 Interest rate = 6% Time period = ½ (6/12 months)
– Domestic economic influences – Global Influences – Inflation – Interest rates
Objective 1
1-5
Life Situation and Personal Values
• Adult life cycle • Life Situation Factors:
– http://www.federalreserve.gov/
1-7
Financial Planning in Our Economy Global Factors
• U.S economy affected by foreign investors and competition from foreign companies • Level of imports/exports affects available supply of dollars • Level of foreign investment affects domestic money supply • Money supply affects consumer interest rates
• “Compounding”
1-19
Future Value
Example
Future Value Original Amount in Savings
=
+
Interest Earned
$100 deposited for 1 year at 6% per year Future Value = $100 + ($100 X .06 X 1) Future Value = $100 + $6 = $106
– Principal = amount of savings – Annual interest rate – Length of time money on deposit (in years)
• Simple interest:
Amt in Svgs
X
Annual Interest Rate
X
• Opportunity cost = what you give up making a choice
Objective 3
– The trade-off of a decision
– Not always measurable in dollars; may be time – Consider lost opportunities resulting from your decisions
1-11
Develop Personal Financial Goals
• Time Frames for Achieving Financial Goals:
– Short-term goals . . . . . . . . . . . – Intermediate goals . . . . . . . . . – Long-term goals . . . . . . . . . . . w/in 1 year 2-5 years > 5 years
• Saving and spending decisions involve considering the trade-offs
– Current needs can make spending worthwhile
1-16
Time Value of Money
Interest Calculations • Calculating interest earned:
1-12
Goal-Setting Guidelines Effective Goals should be:
– Realistic – Stated
in specific, measurable
terms – Based on a time frame – Action-oriented
1-13
Assess Personal and Financial Opportunity Costs of Financial Decisions
– Business, labor & government
• The Federal Reserve
– “.. Sets the nation’s monetary policy to promote the objectives of maximum employment, stable prices and moderate long-term interest rates.”
– Marital status, household size, employment – Exhibit 1-1 (page 5)
• Major events:
– Graduation, marriage, divorce – Birth or adoption of child – Career or health changes
Objective 2
•
Financial Needs Goals:
– Consumable-product goals. . . – Durable-product goals . . . . . . appliances – Intangible-purchase goals . . . health Food, clothing Car, Education,
• Values:
– The ideas and principles you consider correct, desirable, and important
1-6
Financial Planning in Our Economy
Domestic Influences
• Economy’s influence on financial planning
1-9
Financial Planning in Our Economy Interest Rates Interest Rate = the cost of money – Affected by supply and demand – Risk premium:
• Length of time funds in use • Expected inflation • Uncertainty
1-20
Fห้องสมุดไป่ตู้ture Value Tables
• Exhibit 1-3A = FV of a Single Amount