BUS-F 260 Lecture Notes - Lecture 1: Opportunity Cost, Vehicle Insurance, Federal Funds Rate
Document Summary
Financial planning: process of managing your money to achieve personal economic satisfaction. Financial plan: formalized report that summarizes your current financial situation, analyzes your financial needs, and recommends future financial activities. Advantages of financial planning: the financial planning process 6 steps. 6months living expenses for immediate access: accumulation: pay yourself first, income: Taxes drag your ability to reach your goal. What do you want to do with the wealth you accumulate: 6 steps. Develop your financial goals identify alternative courses of action. Economic factors implement your plan review and revise your plan: goal setting guidelines, goals should be smart. Action oriented realistic time based: develop personal financial goals, opportunity cost is what you give up when you do. Short, intermediate, long term goals something (trade off) Personal: time, effort, health, interest liquidity, safety. Financial: home car college education investments: inflation risk rising or falling prices cause changes in buying power.
