个人理财英文版第二章

Liquidity Ratio
Monthly credit How much of earnings Debt-payments payments divided by goes to sevice debt; less Ratio take-home pay than 20% recommended Savings Ratio Monthly savings divided by gross income 5-10% recommended
Step 1 - Record Income
– Net income from employment (Net Pay) – Savings and investment income – Other sources
Step 2 - Record cash outflows
– Fixed and variable expenses
Total cash received during the time period
-
Cash outlays during the time period
=
Cash surplus or deficit
2-18
The Cash Flow Statement
Inflows and Outflows
Items of Value (what you own)
-
Amounts owed (what you owe)
=
Net Worth (your wealth)
2-12
Components of a Balance Sheet
• Step 1 – List itemsபைடு நூலகம்of value
Liquid assets – Real estate – Personal possessions – Investment assets • Step 2 – Determine amounts owed – Current liabilities (< 1 year) – Long term liabilities • Step 3 - Compute your net worth.
2-7
What to Keep in a Safe Deposit Box
• Records and items that would be hard to replace:
– Birth, marriage and death certificates – List of checking, savings and financial institution account numbers – Citizenship and military papers – Adoption and custody papers – Serial numbers and photos of valuables – CDs and credit and banking account numbers – Mortgage papers and titles – List of insurance policy numbers – Stock and bond certificates – Coins and other collectibles – Copy of will
2-16
Evaluating Financial Progress Ratios
RATIO Debt Ratio Curent Ratio Calculation Interpretation Liabilities divided by Low debt is best net worth Liquid assets divided High is desirable by current liabilties Number of months Liquid assets divided expenses canbe paid in by monthly expenses an emergency; high is desirable
2-13
–
Net Worth
• •
•
•
Assets - Liabilities = Net Worth Measurement of current financial position Net worth ≠ cash available Insolvency:
–
Inability to pay debts when due – Liabilities far exceed assets
2-11
Balance Sheet
A financial statement that reports what an individual or family owns and owes as of a specific date: • Also called: – Net worth statement – Statement of financial position
* Keep a backup!
2-9
How Long to Keep Records
Records Birth certificates, wills and social security information Personal property and investments Documents re: purchase and sale of real estate Copies of tax returns and supporting data Retention Period Indefinitely As long as you own them Indefinitely 7 years minimum 10 years better
2-6
Records in Your Home File
• Items you refer to often
– – – – – – – – – – Personal and employment records Money management records Tax records Financial services records Credit records Consumer purchase and auto records Housing records Insurance records Investment records Estate planning and retirement records
2-14
Sample Balance Sheet
2-15
Ways to Increase Net Worth
Increase your savings Reduce spending Increase the value of investments and other possessions Reduce amounts owed
2-10
Create a Personal Balance Sheet and Cash Flow Statement
Objective 2
Benefits
1. Recap your current financial position in
relation to the value of items you own and amounts you owe 2. Measure progress toward financial goals 3. Maintain information on financial activities 4. Provide information for preparing tax forms or applying for credit
2-5
An Organized Personal Financial Records System
Provides a basis for:
• Handling daily business affairs, such as
• • •
•
bill paying Planning and measuring financial progress Completing required tax reports Making effective investment decisions Determining available resources for current and future buying
2-2
Objective 1
Identify the Main Components of Wise Money Management
• Money management = day-to-day financial activities necessary to manage current personal economic resources, while working toward long-term financial security • Daily spending and saving decisions = central to financial planning
2-8
Records on Your Personal Computer*
•
•
• •
•
Current and past budgets Summary of checks written and other banking transactions Past income tax returns prepared with tax preparation software Account summaries and investment performance results Computerized versions of wills, estate plans, and other documents
2-17
The Cash Flow Statement
Inflows and Outflows
• •
Cash flow statement = personal income and expenditure statement Summary of cash receipts and payments for a given period
– Must be coordinated with needs, goals, and personal situations
2-3
Components of Money Management
2-4
Money Management Troubles & Debt
• Getting out of debt: – Evaluate your credit situation – Track your spending – Plan to make payments on time – Consider other income sources – If appropriate, seek assistance
Chapter 2
Money Management Skills
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Money Management Skills
Chapter Objectives 1. Identify the main components of wise money management 2. Create a personal balance sheet and cash flow statement 3. Develop and implement a personal budget 4. Connect money management activities with saving for personal financial goals