FIN2106 Lecture Notes - Lecture 1: Capital Market, Microeconomics, Futures Contract
FIN2106 – Module One
-Personal Financial Planning (PFP) is a holistic process whereby a client’s total position, both financial and
non-financial, is examined and a set of actions or a plan is put in place which, once implemented, will
assist in meeting the client’s ultimate goals and objectives
-Financial Planning Association (FPA) describes PFP as the process of meeting your life goals through the
proper management of your finances
-The FPA identifies six basic steps in the financial planning process:
oCollection personal and financial information from clients
oIdentifying client’s short-term and long-term goals
oAnalyzing the client’s financial position and identifying the financial issues that will affect
attaining these goals
oPreparing written recommendations
oImplementing the agreed upon financial plan
oReviewing and revising the financial plan
-Main areas covered by PFP
oInvestment planning
oBudgeting
oDebt management
oTaxation planning
oSuperannuation and retirement planning
oInsurance and risk management
oAccess to social security
oEstate planning
-There are several factors driving the growth in importance of the PFP industry
oAustralia’s low savings rate
oLower employment security
oAgeing population
oPush for self-funded retirement
oSuperannuation legislation
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oPersonal investing
-Participants in and the structure of the PFP industry
oRegulatory and professional bodies
oFinancial planning groups
oProduct providers
oStockbrokers
oDeposit taking and lending businesses
oResearch houses
oTechnology providers
oLegal and accounting professionals
oEducation and training providers
oMedia
oOther business suppliers
-Macroeconomic is the study of the whole economy, it is distinct from microeconomics which is the study
of specific markets, firms and individuals.
-Main macroeconomic policy objectives include:
oMaintaining a high yet steady rate of economic growth
oMaintaining low unemployment
oMaintaining low inflation
oKeeping the foreign exchange rate stable
oMaintaining a healthy balance of payments
-Gross Domestic Product (GDP) is the primary indicator of the size of the economy.
-GDP consists of four components:
oConsumption spending by households on goods and services
oInvestment spending by firms on capital goods
oGovernment spending on goods and services
oIncome generated by exports minus expenditure on imports
-There are two main policy instruments that the government or its agencies can deploy to manage the
economic system. These include:
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Financial planning association (fpa) describes pfp as the process of meeting your life goals through the proper management of your finances. Main areas covered by pfp: investment planning, budgeting, debt management, taxation planning, superannuation and retirement planning, insurance and risk management, access to social security, estate planning. There are several factors driving the growth in importance of the pfp industry: australia"s low savings rate, lower employment security, ageing population, push for self-funded retirement, superannuation legislation, personal investing. Macroeconomic is the study of the whole economy, it is distinct from microeconomics which is the study of specific markets, firms and individuals. Main macroeconomic policy objectives include: maintaining a high yet steady rate of economic growth, maintaining low unemployment, maintaining low inflation, keeping the foreign exchange rate stable, maintaining a healthy balance of payments. Gross domestic product (gdp) is the primary indicator of the size of the economy.
