COMMERCE 4FP3 Lecture Notes - Lecture 1: List Of Fables Characters, Opportunity Cost, Tax Avoidance

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25 Sep 2016
Department
Professor
Personal Finance Lecture 1 (1)
Definitions
Personal Finance
The process of planning your spending, financing, and investing activities,
while taking into account uncontrollable events.
Personal Finance Plan
A plan that specifies your financial goals and describes the spending.
The earlier you start, the better off you are as you go along
Benefits of Understanding Personal Finance –
Opportunity Cost
- What to give up to get things done
- What to prioritize first
Types of Financial Planners
- Salaried employees of financial institutions
- Commission planners receive fees from sellers of the products, usually
investments and insurance
- Fee-based – combine commissions with fee from client
- Fee-for-service – client pays hourly fee for advice, planner receives no
commissions
Components of a Financial Plan
- Budgeting and tax planning
- Managing your liquidity
- Financing your large purchases
- Protecting your assets and income (insurance)
- Investing your money
- Planning your retirement and estate
Do not want all the ‘eggs’ in your network to have a relative relationship (not to go
up or down at the same time)
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