Introducing Personal Finance

Walt Woerheide

Chapter 1

Learning Objectives (part 1 of 2)

Define the six steps of the personal financial planning process

Describe the five strategies to managing one's finances

Identify the various types of financial planners and how they are compensated

Define what is meant by human capital

Learning Objectives (part 2 of 2)

Describe how to select a job or a career

Find a job using the Internet Decide among two or more job

offers based on both salary and location

The Six Steps of the Personal Financial Planning Process (part 1 of 2)

Define your current situation Define where you want to go Identify the barriers to getting

where you want to go

The Six Steps of the Personal Financial Planning Process (part 2 of 2)

Develop a written plan Implement the plan Regularly review and revise the

plan

Examples of the Miscues of Life (part 1 of 2)

Premature Death Divorce Health Problems Unemployment

Examples of the Miscues of Life (part 2 of 2)

Casualty and Theft Losses Being Sued Significant Investment Losses

Five Strategies of Financial Planning Annual Saver Lifetime Saver Annual Balanced Lifetime Balanced Lifetime Spending

Who is a Financial Planner? (part 1 of 2)

Certified Financial Planner ™ (CFP) Chartered Financial Consultant

(ChFC) Certified Public Account with a

specialization in financial planning (CPA)

Who is a Financial Planner? (part 2 of 2)

Lawyer Insurance Agent (Chartered Life

Underwriter (CLU)) Stockbroker

How are financial planners paid? Fee based Commission based Combination fee & commission

What questions should one ask a financial planner? (part 1 of 2)

What experience do you have? What are your qualifications? What services do you offer? What is your approach to financial

planning? Will you be the only person

working with me?

What questions should one ask a financial planner? (part 2 of 2)

How will I pay for your services? How much do you typically charge? Could anyone besides me benefit

from your recommendations? Have you ever been publicly

disciplined for any unlawful or unethical actions in your professional career?

Can I have it in writing?

What is human capital? The ability of the individual to

generate income from work-related activities.

For many people, and particularly college students and recent graduates, it is their largest single asset.

It is expensive to acquire (in most cases), and has unusually high rates of return.

Using the Internet for Career Information and Job Opportunities (part 1 of 2)

Key trends in employment Checking out salaries Locating career fairs

Using the Internet for Career Information and Job Opportunities (part 2 of 2)

Advertising one’s self Cost-of-Living Comparisons Internships and Coops

How to find things on the Internet Guess at the address

(.org, .edu, .com, .gov) If full address is defective, may have

rearranged site (Lop off links one by one)

Search engines (www.altavista.com, www.yahoo.com)

Tricks to use with search engines (quotations, plus signs & minus signs)