AAEC 2104 Lecture Notes - Lecture 2: Personal Finance, Compound Interest, Opportunity Cost
30 Aug 2016
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The best protection is knowledge: keep up to date on financial matters, ask read observe, lots of sources of information c. i. Nothing happens without a plan: people spend money without thinking, but you can"t save without thinking about it, saving must be planned b. i. Start off with a modest uncomplicated plan b. ii. Later modify and expand your plan: time c. i. The time value of money: money has a time value a. i. Taxes affect personal finance decisions: taxes influence your actual earnings, goal- maximize your after-tax return, compare investment alternatives on an after tax basis, don"t make decisions strictly based on taxes. Importance of liquidity: have funds available for the unexpected, without liquid funds b. i. Results in lower price, tax consequences, or missed opportunities: with nothing to sell c. i. Smart spending matters: fastest way to improve your financial situation-reduce your spending, wants vs needs, be a smart consumer, comparison shop.
