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Chapter 14: Personal Finances

Chapter 14: Personal Finances. Where Does Your Money Go? Financial Planning Time is Money The Financial Planning Process A House is Not a Piggy Bank: A Few Lessons From the Subprime Crisis (cases and problems). 1. Where Does Your Money Go?.

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Chapter 14: Personal Finances

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  1. Chapter 14: Personal Finances Where Does Your Money Go? Financial Planning Time is Money The Financial Planning Process A House is Not a Piggy Bank: A Few Lessons From the Subprime Crisis (cases and problems)

  2. 1. Where Does Your Money Go? • What is a FICO score and how is it used in personal finance? • Who are the three credit bureaus that compile numerical credit scores and what five criteria do they use to determine the score? • Discuss the five additional charges associated with personal credit cards

  3. 2. Financial Planning • Define personal finances and financial planning • What are the three stages of the financial planning life cycle • Discuss the financial advantages of a college education • Explain factors, other than wage, to be considered in a new job as part of your financial life cycle

  4. 3. Time is Money • Explain the principles of compound interest and time value of money and their effect on your financial planning cycle

  5. 4. The Financial Planning Process • Discuss the three stages of the personal-finances planning process • Explain the workings of a personal net-worth statement, Include definitions of liquid and tangible assets and current and non-current liabilities • What is a personal cash-flow statement and what does it show? • In addition to inflows and outflows what are the other three things tracked in a personal budget? • Explain the two types of variance

  6. 5. A House is Not a Piggy Bank: A Few Lessons From the Subprime Crisis • Discuss the changes in the rates of disposable income devoted to savings in the US over the past 10 years • What is the definition of a subprime mortgage loan and what are some of the lessons learned from the subprime crisis? • Explain the differences (advantages and disadvantages) between a adjustable rate mortgage and a fixed rate mortgage • What are the three types of risks that make cash flows variable based on organizations involved in the financial transaction?

  7. Cases and Problems Each person will choose one of the cases and problems sections (learning on the Web, Ethics Angle, Team-Building Skills or Global View) In the next session of class, students will break up into groups based on their section choice. Be prepared to discuss in your group the outcomes of your research.

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