Course Title: Personal Financial Planning Instructor: Contact: Course Description: Course Objectives Intellectual Development: Required Materials:

Transcription

1 Course Title: Personal Financial Planning Human Development and Family Studies 483 Instructor: Jeanna Hennick 1337 Palmer (office) Contact: Tuesday/Thursday 9:30-10:45 88 LeBaron Course Description: Managerial approaches to achievement of short- or long-term financial goals for households. Investigation of different forms of investments and investment risks management in financing current and future consumption. Analyses of tax, estate, and retirement planning needs of the family. Course Objectives: The student should: Demonstrate an understanding of the importance of the time value of money in financial planning. Examine the economic, social, political, and technological environment and be able to determine how financial plans should accommodate those environments. Identify the potential goals a client may have, help them enunciate their goals and evaluate strategies to help clients achieve their goals. Construct personal financial statements and use ratios and other techniques to analyze these statements. Evaluate the use of credit and planned borrowing to meet household consumption, asset acquisition and other financing needs. Identify strengths and weaknesses in a client s initial situation and determine opportunities for problem solving. Intellectual Development: In addition to developing technical expertise in the course subject matter, this course develops and fosters: Communication skills, both written and oral Critical thinking Decision-making Team work Self-reflection Intellectual curiosity and lifelong learning Required Materials: Personal Finance Turning Money Into Wealth. Keown, Arthur J. 5th Edition Financial calculator Your computer must support WebCT capabilities. For more information please visit Comprehensive Financial Plan: You will develop a personal financial plan worth 20% of your total grade. This plan could include but is not limited to a budget, investments, retirement plan, insurance, etc. This project will be covered in more detail as it is presented throughout the class. Homework: There will be four assignments making up 20% of your total grade. These assignments will be covered in more detail as the topics are presented throughout the semester.

2 Exams: There will be three exams making up 50% of your total grade. These examinations may include multiple choice, true/false, short answer, and short case analysis. You will receive more details about focus areas in the form of study guides and/or classroom review. There will be no make-up exams. Class Discussion & Participation: You will be expected to actively and respectively participate in classroom discussions throughout the semester. Your class participation is worth 10% of your total grade. Extra Credit: Extra credit will be given for current events. Current events may consist of recent journal articles, newspaper articles, electronic news clips, etc. that pertain to the content of this course. Each current event will count as ½ point of extra credit. A maximum of 20 points extra credit can be accumulated. Course Policies: All coursework must be typed. Students must notify the instructor in advance for late work. The only exceptions for late work will be for medical and other types of emergencies. Grading Assessment of Student Mastery of Course Content: Grades are not curved. Final grades will be assigned on the basis of weighted points earned as a percentage of total weighted points available: A 94%+ A % B % B 82-85% B % C % C 72-75% C % D % D 62-65% D % F 59% and Below Intellectual Honesty: Students enrolled in this course are expected to maintain the highest standards of academic integrity. Suspected cases of academic misconduct will be pursued fully in accordance with ISU policies. Students are strongly urged to consult the Iowa State University's policy on academic dishonesty which can be found at Other University Policies: Please address any special needs or special accommodations with me at the beginning of the semester or as soon as you become aware of your needs. Those seeking accommodations based on disabilities should obtain a Student Academic Accommodation Request (SAAR) form from the Student Disability Resource (SDR) office (phone ). SDR is located on the main floor of the Student Services Building, Room *Syllabus is always subject to change*

3 Course Outline the professor retains the right to modify this outline: Week Content; Assignments; Tests Reading and Preparation 1 Introduction to financial planning Chapter 1 a. Financial planning process and introduction to CFP Board s Financial Planning Practice Standards b. Economic, social, political, and technological environmental impacts to financial planning c. Evolution of financial planning d. Content of a comprehensive plan a. Certification, designations, licenses, and key participants b. Role of the planner 2 Client attitudes, behavioral characteristics, household characteristics and client communications a. Principles of communication b. Counseling techniques trust building c. Client idiosyncrasies (e.g., compulsive spending, gambling, addictions) d. Subjective risk preference and client psychology (includes culture) e. Household composition and its impact on financial status Chapter 1 f. Role of economy when developing a financial plan g. Establishing client objectives and goals h. Mechanics of data gathering 3 Time value of money and applications a. Review of basics (financial calculator, spreadsheets) b. Uneven cash flows c. Sensitivity of interest rates and time d. Growing annuities (geometric varying annuities) e. APR Chapter 3 f. Real vs. nominal g. Structured and legal settlements h. Monetary windfalls i. Business valuation (DCF) 4 Personal financial statements a. Statement of financial position 1. Treatment of retirement resources 2. Treatment of taxation and liquidation costs on net worth b. Cash flow statements c. Interpretation of statements (e.g. financial ratios) Chapter 2

4 5 Budgeting and emergency fund a. Income projection and purchasing power b. Discretionary and non-discretionary c. Budgeting techniques d. Planning discretionary cash flow e. Emergency fund adequacy f. Liquidity vs. marketability g. Liquidity substitutes 6 a. Submission 1-Comprehensive Financial Plan (Financial Statement Analysis) b. Review c. Exam 1 7 Credit and debt management (depository/lending institutions) a. Financing strategies b. Credit reports and FICO c. Types of credit d. Bankruptcy Consumer protection laws Financing asset acquisitions a. Buying vs. leasing 1. Computation of lease payment 2. Impact on financial statements b. Mathematics of installment loans c. Mortgage types and selection d. How much home is affordable? e. Mortgage math (e.g., amortization) e. Refinancing 8 Educational funding a. Needs analysis b. Financing education 1. Financial aid process and determinants of financial aid 2. Sources of financial aid (e.g., loans, grants, scholarships) Plans, Coverdell ESAs 4. UTMA/UGMA 5. Treasury bonds 6. Retirement plans 7. Strategies c. Taxes and education (credits, deductions) d. Education planning policy statement Chapter 2 Chapter 6

5 9 Risk management a. Introductory topics 1. Protecting standard of living (disability, life insurance, long-term care) 2. Protecting wealth and property (auto, homeowners, liability, umbrella, disaster) 3. Health Care coverage (HMOs, PPOs) b. Applications 1. Introduction to insurance needs analysis 2. Policy selection (group, government, and private) 10 Retirement a. Sources of income 1. Pensions 2. Social Security and other government plans 3. Personal savings 4. Reverse annuity mortgages b. Retirement needs analysis c. Tax-advantaged accounts d. Techniques for retirement projections 11 a. Submission 2-Comprehensive Financial Plan (Educational funding, insurance, retirement) b. Review c. Exam 2 12 Investments a. Introductory topics 1. Review of investment vehicles 2. Difference between insurance risk and investment risk 3. Risk and return 4. Types of investment risk 5. Measurement of risk 6. Efficient Market Theory b. Applications 1. Objective risk tolerance 2. Matching goals and risk tolerance to portfolio allocation 3. Passive vs. active management 13 Tax overview and analysis a. Review the interrelationship between taxes and financial planning recommendations b. Determine possible tax planning opportunities and threats to a client within the context of the financial planning topic areas Chapter 9 Chapter 10 Chapter 16 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 4

6 14 Financial services regulation a. Registration and licensing b. State securities and insurance laws c. Investment advisors act Estate planning a. Documents b. Types of ownership c. Trusts d. Gifting strategies e. Estate tax Chapter 17 f. Probate 15 a. Case Study Presentations b. Final Case Study Submission 16 a. Final Exam as shown on university schedule Cumulative