Textbook Notes (368,330)
Canada (161,803)
Finance (362)
FIN 502 (69)
Joan Lobo (33)
Chapter 1

CFIN502- Chapter 1- Introduction .docx

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FIN 502
Joan Lobo

CFIN502- Chapter 1- Introduction A SIMPLE MODEL OF FINANCIAL PLANNING  Financial planning process—series of decisions on how much money you need at some future time in order to meet your goals, and how you will get that money  Goals monetary terms and have some date attached to them in order to plan for them o 2 sources—Have some money now invest over time —Earn money by working consume some money as well with net amount (savings)  Financial goal (at time n) = existing savings + investment for n years on the existing savings + (earnings – consumption each year) + Investment income on the annual savings THE CONTENTS OF THE BOOK  Chapters 2-7 present the fundamental tools or mechanics of personal financial management o Chapter 2- time value of money o Chapter 3- setting goals and the financial planning process o Chapter 4- measuring and controlling personal finance o Chapter 5- family law o Chapter 6- the life cycle and financial intermediation o Chapter 7- personal income tax o Chapter 8- Income tax planning  Chapters 8-16 elements combined to form the financial plan o Chapter 9- risk management o Chapter 10- life, health, and disability insurance o Chapter 11- property, home, and automobile insurance o Chapter 12- credit and debt management o Chapter 13- buying a home and mortgage financing o Chapter 14- principles of investment o Chapter 15- types of insurance o Chapter 16- mutual funds  Chapters 17-18 retirement planning—specific goal of a comfortable retirement o Chapter 17- retirement planning o Chapter 18- maturation of the retirement plan GOING BEYOND THIS BOOK  Concentrate on finance principles—environment which you make decisions change o Level of interest rate and inflation rate, trends in consumer spending, expectations about future incomes, personal financial planning  Personal financial planner’s manual reference source with a great deal of technical knowledge—family law, income tax law, retirement planning o Produced and updated as necessary—twice a year  Internet—largest source of recent information  Daily newspaper—record important economics events and provide statistics in their business pages  Professional accountants o Chartered accounts (CA) o Certified general accountants (CGA) o Certified management accountants (CMAs) GETTING EXPERT HELP  Choosing an advisor o Honest and a commitment to serve our personal finance needs o Help us before selling us the most profitable product or servic
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