Personal finance 7th edition pdf download keown

Be loyal and supportive of your boss 7. Acquire new skills, particularly skills that are hard to duplicate 8. Develop a strong network of contacts—for future opportunities 9. Uphold and maintain ethical standards—ethical violations end careers D. What Determines Your Income? Earnings determine standard of living 2. Education determines income level E.

Lessons from the Recent Economic Downturn A. Recessions can cause worry, stress, and concern for the future B. Avoid overspending, not saving, and acquiring too much debt C. Fund an emergency fund D. Start thinking about and funding retirement at an early age VI. Ten Principles of Personal Finance A. Principle Just Do It! Behavioral Insights A. Principle Just do it! Because the principles are introduced in this chapter, it is important that students become familiar with the concepts as a foundation for future study and application throughout the text.

Ask students to identify the most difficult step in the financial planning process. In other words, what causes the most uncertainty—getting started, taking action, or evaluating progress and taking the necessary corrective action?

Encourage students to defend their answers or use personal examples to justify their choices. How are procrastination and lack of time factors at any step in the process? Discuss how these goals might change in the future.

Why might they change? Relate the discussion to why people need and should want a financial plan. Interview three heads of household, each from a household representing a different stage of the life cycle or socioeconomic status. Inquire about their financial planning process and their strategies to identify and save for short-term, intermediate-term, and long-term goals.

Report your findings. Visit your campus career counseling office to learn about the services available to assist you with your career search and your job search. What career management services, if any, are available after you graduate?

As a foundation for your financial planning, visit the U. Department of Labor Career Guide to Industries at www. What educational requirements are necessary for entry and advancement in the field? Continue the exercise by asking students to identify one word they associate with money common examples include love, freedom, independence, security, anger, envy, etc. As a group project, have each member of the group visit a financial professional e. Present the list of ten principles that form the foundations of personal finance.

Ask the professional to pick the three to five principles that he or she considers to be most important to personal financial success. Share the results in your group and prepare an essay or oral report of your findings.

Which principles appear to be most important? Answers follow each question. Why is financial planning, or just plain money management, a challenge for most people? Financial planning, or just plain money management, is a problem for most people for several reasons. Classes may not be readily available in high school; good habits may not be taught, demonstrated, or even discussed at home; and financial management topics and vocabulary can be intimidating.

Your salary will not increase as a result of financial planning, but having a financial plan will help you better allocate the money you earn toward the financial goals that are really important to you both today and in the future.

Everyone needs to plan their finances by establishing, tracking, and achieving various financial and personal goals for their current and future situation. Step 5 focuses on a review of progress toward goal achievement, a reevaluation of the current financial situation and the need for new or different goals, and the revision of the plan in response to these changes.

What three characteristics are required to define financial goals? Once identified, why is it important to rank goals? As the foundation of your plan, financial goals should be specific, realistic, and a reflection of your financial and life situation.

To define financial goals ask yourself 1 what, 2 how much, and 3 when. In other words, formalize the goal by writing it down, calculating the cost, and determining when the money will be needed. Setting and ranking goals helps you to decide which ones are most important and if you are truly willing to make the commitment to achieve them. Explain the time horizon for short-term, intermediate-term, and long-term goals.

Give an example of each. Short-term, intermediate-term, and long-term goals are similar in that all represent important financial objectives to be accomplished in the future.

They differ in time horizon. Short-term goals, such as paying off a credit card, can be accomplished in less than one year. Intermediate-term goals require from 1 to 10 years, such as saving enough money for a down payment on a home. List and characterize the stages of the financial life cycle.

What three financial concerns are addressed across all three stages? It is the longest stage. Buying a home, managing debt, saving for future goals, investing, planning for taxes, purchasing insurance, and beginning an estate plan characterize this stage. Marrying at a later age than normal, divorce, or remarriage may complicate the financial tasks associated with Stage 1. Insurance protection and estate plans must be reviewed. Corporate downsizing, voluntary career changes, responsibility for aging parents, or death of a spouse could interrupt plans for accumulating a retirement nest egg or other wealth.

Insurance needs may change, with increasing concerns for medical or nursing home care. Estate planning efforts to reduce taxes and to protect assets for heirs may be important. Remarriage or postponed first marriage that resulted in children born later in life, responsibility for aging parents, or chronic health care needs could complicate wealth preservation after retirement or necessitate part-time employment.

Insurance planning, tax and estate planning, and saving for goals, including periodic reassessment of the retirement goals, are three financial concerns that span the life cycle. Define career planning. How is it related to financial planning? The objective of financial planning is to use the income generated from employment and investments e.

For most people, their lifestyle is based on their employment earnings. The job pays, and it pays to be happy in the job! What do you think will be the five most important strategies for success in your career field? Although individual student answers will vary, recommended strategies that are universally applicable include the following: VII.

Do your best work. Project the right image. Understand and work within the power structure. Gain visibility for your contributions. Expand your knowledge of the operation through new assignments. Research career alternatives to identify careers that value your skills, interests, and abilities 3. Learn more by talking to professionals or academic advisors or using the Internet 4. Getting a Job 1. Three reasons to start early 2. Be prepared for the interview, including the most common questions C.

Being Successful in Your Career 1. Do your best work 2. Project the right image 3. Understand and work within the power structure 4. Gain visibility for your contributions 5. Take new assignments to gain experience and organizational knowledge 6.

Be loyal and supportive of your boss 7. Acquire new skills, particularly skills that are hard to duplicate 8. Develop a strong network of contacts—for future opportunities 9. Uphold and maintain ethical standards—ethical violations end careers D. What Determines Your Income? Earnings determine standard of living 2.

Education determines income level E. Lessons from the Recent Economic Downturn A. Recessions can cause worry, stress, and concern for the future B. Avoid overspending, not saving, and acquiring too much debt C. Fund an emergency fund D. Start thinking about and funding retirement at an early age. Ten Principles of Personal Finance A. Principle Just Do It! Behavioral Insights A. Principle 9: Mind games, your financial personality, and your money Action Plan. Because the principles are introduced in this chapter, it is important that students become familiar with the concepts as a foundation for future study and application throughout the text.

Ask students to identify the most difficult step in the financial planning process. In other words, what causes the most uncertainty—getting started, taking action, or evaluating progress and taking the necessary corrective action? Encourage students to defend their answers or use personal examples to justify their choices. How are procrastination and lack of time factors at any step in the process? Discuss how these goals might change in the future. Why might they change? Relate the discussion to why people need and should want a financial plan.

Interview three heads of household, each from a household representing a different stage of the life cycle or socioeconomic status. Inquire about their financial planning process and their strategies to identify and save for short-term, intermediate-term, and long-term goals. Report your findings. Visit your campus career counseling office to learn about the services available to assist you with your career search and your job search.

What career management services, if any, are available after you graduate? As a foundation for your financial planning, visit the U. Department of Labor Career Guide to Industries at www. What educational requirements are necessary for entry and advancement in the field? Continue the exercise by asking students to identify one word they associate with money common examples include love, freedom, independence, security, anger, envy, etc.

As a group project, have each member of the group visit a financial professional e. Present the list of ten principles that form the foundations of personal finance. Ask the professional to pick the three to five principles that he or she considers to be most important to personal financial success. Share the results in your group and prepare an essay or oral report of your findings. Which principles appear to be most important?

Answers follow each question. Why is financial planning, or just plain money management, a challenge for most people?

Financial planning, or just plain money management, is a problem for most people for several reasons. Classes may not be readily available in high school; good habits may not be taught, demonstrated, or even discussed at home; and financial management topics and vocabulary can be intimidating.

Your salary will not increase as a result of financial planning, but having a financial plan will help you better allocate the money you earn toward the financial goals that are really important to you both today and in the future. Everyone needs to plan their finances by establishing, tracking, and achieving various financial and personal goals for their current and future situation.

Step 5 focuses on a review of progress toward goal achievement, a reevaluation of the current financial situation and the need for new or different goals, and the revision of the plan in. What three characteristics are required to define financial goals? Once identified, why is it important to rank goals? As the foundation of your plan, financial goals should be specific, realistic, and a reflection of your financial and life situation. To define financial goals ask yourself 1 what, 2 how much, and 3 when.

In other words, formalize the goal by writing it down, calculating the cost, and determining when the money will be needed. Setting and ranking goals helps you to decide which ones are most important and if you are truly willing to make the commitment to achieve them. Explain the time horizon for short-term, intermediate-term, and long-term goals. Give an example of each. Short-term, intermediate-term, and long-term goals are similar in that all represent important financial objectives to be accomplished in the future.

They differ in time horizon. Short-term goals, such as paying off a credit card, can be accomplished in less than one year. Intermediate-term goals require from 1 to 10 years, such as saving enough money for a down payment on a home. List and characterize the stages of the financial life cycle.

What three financial concerns are addressed across all three stages? Three stages make up the financial life cycle: Stage 1: The Early Years—A Time of Wealth Accumulation sets the stage for the family and financial lifestyle. It is the longest stage. Buying a home, managing debt, saving for future goals, investing, planning for taxes, purchasing insurance, and beginning an estate plan characterize this stage.

Marrying at a later age than normal, divorce, or remarriage may complicate the financial tasks associated with Stage 1. Stage 2: Approaching Retirement—The Golden Years focuses on final efforts to accomplish retirement plans and to create wealth. Insurance protection and estate plans must be reviewed.

Corporate downsizing, voluntary career changes, responsibility for aging parents, or death of a spouse could interrupt plans for accumulating a retirement nest egg or other wealth. Stage 3: The Retirement Years focuses on preserving wealth through management of savings and assets. Insurance needs may change, with increasing concerns for medical or nursing home care.

Estate planning efforts to reduce taxes and to protect assets for heirs may be important. Remarriage or postponed first marriage that resulted in children born. Insurance planning, tax and estate planning, and saving for goals, including periodic reassessment of the retirement goals, are three financial concerns that span the life cycle.

Define career planning. How is it related to financial planning? These boxes identify areas of concern and propose questions to ask when buying a car, getting insurance, investing in mutual funds, and performing other personal finance tasks.

MyFinanceLab is a fully integrated online homework and tutorial system that helps students complete problems and receive immediate feedback and help. Ten Financial Life Events are examined in Chapter 17 to tie together all of the concepts and tools presented in this book. Students will clearly see that in the course of a lifetime, they will experience many events that will change their goals, affect their financial resources, and create new financial obligations or opportunities.

End-of-chapter materials have been redesigned to more closely match learning objectives. In addition to a summary for the material covered under each learning objective, key terms are also defined within each learning objective. Dramatically expanded coverage of student loans and paying for college now covers almost half of Chapter 7. This chapter helps students understand the consequences of school choice and gives them an in-depth look at the world of student loans to help untangle the complexities and jargon associated with them.

The coverage of investing is simplified and completely revised by combining Investment Basics formerly Chapter 11 and Securities Markets formerly Chapter Continued coverage of lessons from the recent economic downturn and the uneven recovery is included throughout the book where appropriate, including Chapters 1, 5, 7, 8, 11, 12, and An increased emphasis on the use of the Internet and mobile apps is introduced and described when discussing various financial topics such as budgeting, record keeping, credit cards, investments, and retirement planning.

New to This Edition. Students will clearly see that in the course of their lifetime, they will experience many events that will change their goals, affect their financial resources, and create new financial obligations or opportunities. This chapter helps students understand the consequences school choice and gives the an in-depth look at the world of student loans to help untangle the complexities and jargon associated with them.

Table of Contents Preface. Part 1: Financial Planning. The Financial Planning Process. Understanding and Appreciating the Time Value of Money. Tax Planning and Strategies. Part 2: Managing Your Money. Cash or Liquid Asset Management. The Home and Automobile Decision. Part 3: Protecting Yourself with Insurance. Life and Health Insurance. Property and Liability Insurance. Part 4: Managing Your Investments. Investment Basics. Investing in Stocks. Investing in Bonds and Other Alternatives.

Part 5: Life Cycle Issues. Retirement Planning. Share a link to All Resources. Instructor Resources. Websites and online courses. Other Student Resources. Discipline Resources. About the Author s.