FIN 502 Chapter Notes - Chapter 3: Financial Plan, Goal Setting, Contin

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7 Feb 2014
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Chapter 3: setting goals and the financial planning process. Learn process of fin planning to achieve goals. Financial goals: goals outcome can be measured in dollars, deadline for completion. How to set financial goals: brainstorm write desires and goals, goals = s-t (vacation), l-t (buy house in 5 yrs, convert desire to fin goal. The fundamental financial goals goal of early retirement accum savings, pension support level of consumption after retirement goal of early retirement: pv of desired level of consumption f/ date of retirement to expected death. Formal model for analysis t = future yr n = yr goal met. Wn = financial goal. amt money trying to accumulate by certain yr. W0 = amt of money have today dedicated for future. Ct = money consume/spend in yr t other than that used to purch investments k = rate of return earn on savings. Expressed 1 + k b/c have orig amt invested and earnings.

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