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Personal Finance

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Personal Finance

  1. 1. Personal Finance G181 (Distance Learning Course) 3 Credit Hours Atlanta Bible College David Krogh, Instructor Information for Course: The student will need a VCR and TV and a computer with Internet and e-mail capabilities in order to take this course. Instructions are given for each session below. Read the appropriate material, watch videos and fill in workbook sheets while watching the video and after watching the video. Use indicated websites to gain additional information and to complete assignments. E-mail answers to the instructor as indicated. The mid term and final exam will need to be taken at the college at the appropriate time, or someone can be designated as a proctor to administer the exam in your area, under the direction of the instructor. Session 1 – read the following material below to gain an overview of this course and then continue with the first assignment. TEXTBOOKS AND COURSE MATERIALS: ⋅ How Money Works; Primerica Financial Service, 2001 - Master Your Money by Ron Blue; Walk Thru the Bible Ministries, Inc., 1990 - Kiplinger’s Practical Guide to Your Money; The Kiplinger Washington Editors, Inc., 2002, by Ted Miller. ⋅ Readings from the following magazines: Kiplinger Personal Finance; Business Week; Money; Mutual Funds; Consumer Reports (available in your local library or they can be purchased at a book store.) ⋅ Websites – http://money.cnn.com – Money 101 section; and other sites mentioned below. ⋅ Supplemental material in notebook COURSE DESCRIPTION: This course centers on the basic concepts of personal financial planning. Special emphasis is placed upon Biblical principles of financial management. It includes topics of personal financial goal setting, taxes, money and credit management, insurance, home purchase, investments, spending priorities, and estate planning. There is a brief overview of issues related to church finances: budgeting, fund raising, risk management, IRS forms, and tax issues pertaining to a pastor. TIME INVESTMENT Each session will average from 90 to 120 minutes (a campus course would include classroom instruction for 50 minutes for each class period with 40 to 70 minutes of outside preparation. 1
  2. 2. TERMINAL COURSE OBJECTIVES: 1. To learn Biblical principles of managing personal finances. 2. To learn specifics of investments, spending priorities, use of credit, and coordination of financial planning. 3. To learn how to file a tax return to manage and minimize tax liabilities. 4. Become aware of resources which can be used to teach Biblical stewardship. 5. Learn how to use the Internet to secure financial information. 6. Become familiar with sources of financial information – newspapers, magazines, radio and TV. 7. Identify and evaluate insurance requirements, including life, health, disability, property, and liability insurance. 8. Based on financial planning tools encompassed in the course, prepare a personal financial plan. OVERVIEW OF ASSIGNMENTS 1. Readings from textbooks and handouts. 2. Workbook will be read and blanks filled in. 3. Papers a. A two or more page typewritten paper contrasting God’s financial principles with man’s financial principles. b. A one page typed report based on research of one product which the student may plan to buy in the next year using Consumer Reports or Kiplinger’s Personal Finance Magazine to determine which brand is the best buy. c. A two page typed paper on tithing, mentioning Bible texts that talk about tithing and discussing whether these passages apply to Christians today. d. A typed personal financial plan that will include worksheets prepared throughout the semester for daily assignments. The plan will include an assessment of your current financial situation; your budget; goals for the future; and recommendations on how to achieve the goals. If you prefer to keep your financial matters confidential, you may use fictitious numbers as you prepare the financial plan, provided that the numbers used are logical and contribute to a well developed plan. 4. Students will monitor radio and TV news, newspapers, and magazines, for current financial news, including the major stock indexes. A short paragraph of this information will be typed for the instructor – one for each session. 2
  3. 3. 5. Each week on Friday, students will look up the closing value from the previous day for the following: Dow-Jones Industrial Average Nasdaq S & P 500 Mutual Funds – American Funds – Washington Mutual A Mutual Funds – Janus Worldwide IBM This information will be for the close of the markets on Thursday afternoon. This information is found in the business section of the newspaper or on the Internet at http://money.cnn.com or at www.kiplinger.com. Record the results on a spread sheet and record this information each week while doing the course. Print out the spread sheet at the end of the course for the instructor. (For an example of the numbers to be selected, see the sample pages following Handout 1.) 6. Students will use the Internet to secure other financial information. A primary website is http://money.cnn.com You will be asked to use the Money 101 section for many lessons. As you use each section, read through each article. At the bottom of the article, click on the next article, and work your way through the end and take the test. Print out the test. 7. Students will read 15 articles over the time period of the course from Kiplinger’s Personal Finance, Business Week, Money, Mutual Funds, or other finance magazines. A two paragraph summary of the article (including the name of the magazine and the title of the article) will be word processed, printed out, and included in your notebook (see #10 below) and mailed to the instructor. 8. Several quizzes will be given in addition to the mid-term and final exams. 9. Answers to case studies will be type and printed. 10. At the mid point and end of the course, you will submit a notebook to the instructor containing all of your work up to that point to be graded. Instructions for All Written Assignments: On each written assignment, be sure to include your name, the session number that this assignment pertains to, and the date. As you file the assignments in your notebook, put them in order so the instructor can grade the papers in sequence. GRADING FACTORS: Reading/Reporting on Magazine Articles 15% 3
  4. 4. 4 Papers 20% Internet Assignments 15% Mid Term 25% Final Exam 25% Session 1 Introduction to Course (continued) Biblical Foundations Read the following scriptures and type a one or two sentence summary of each verse (number your summaries the same as the verses below): 1. Danger in riches and poverty: Proverbs 30:7-9 2. Proper attitudes toward wealth: a. 2 Peter 3:10, 11 b. Matt. 6:19-21 c. Prov. 11:28 d. Psalm 50:10 3. Message of Jesus: (type answers to all of the questions below) a. Luke 12:13-21 1.) What is the setting for this parable (v. 13)? 2.) What was Jesus’ reply? (v. 14)? 3.) What is the vital teaching of Jesus in v. 15? 4.) How do Jesus’ words contrast with the values of our world today? 5.) How would you characterize the man in the parable? 6.) How does James 4:13-16 relate to this man? 7.) How does Jesus summarize his parable? (v. 21) b. Matt. 13:22 c. 1 Tim. 6:17-19 – list all the things that rich people are not to do and the things they should do d. Malachi 3:7-12 Session 2 Look at Handout 1 to discover what the Dow, Nasdaq , S & P 500, and Wilshire 5000 Indexes are. Log on to http://money.cnn.com and click on “Markets and Stocks” and then click on “Dow 30” to see a list of the 30 4
  5. 5. stocks in the Dow. Are these companies familiar to you? Print out the list. Start your log (mentioned in #5 under “Overview of Assignments”). Look at Handout 2 to learn about inflation. Use the following website to look up and print out the consumer price index for 1970 to the present: http://special.kiplinger.com/kbftables/usecon/inflation/CPIbymonth.htm This table shows how much the cost of living has gone up each year. Write down the Dec. to Dec. increase for the following years: 1970, 1980, 1990, 2000, and 2002 Log on to http://woodrow.mpls.frb.fed.us/ Click on “inflation calculator.” Put in your year of birth and $1.00 and then enter the current year and see what $1.00 worth of goods and services that cost $1.00 when you were born, costs today. Write down the answer and e-mail it to your instructor. Read the rest of the page about the CPI. Then click on “Consumer Price Index and Inflation Rates, 1913-“ Write down your year of birth and then write down the rate of inflation for your year of birth. Write down the CPI for the current year and write down the rate of inflation for the current year. Look at Handout 3 to see how inflation (the increase in the cost of living) affects you over time. The Financial Pyramid – see Handout 4 Interest rates – Log on to http://woodrow.mpls.frb.fed.us/ Click on “interest rate charts.” Print out the short-term interest rate chart and e-mail it to your instructor. Session 3 Where Are You Now? – Assets, Liabilities, and Net Worth Master Your Money – Unit 1; Read Kiplinger’s Practical Guide to Your Money (KPGYM) pp. 3-18 Log on to: www.money.cnn.com Click on calculators; under “Savings and Spending” click on “What’s Your Net Worth?” Fill out and print out page. Be sure to memorize the chart on page 16 – including the 4 steps in the financial planning process: 1. Summarize Present Position 2. Establish Financial Goals 3. Increase Cash Flow Margin 4. Control Cash Flow 5
  6. 6. And the 5 ways you can use your income: 1. Giving 2. Taxes 3. Debt Repayment 4. Living Expenses 5. Cash Flow Margin (or savings) And the growth in net worth (savings and appreciation of assets) that enables you to reach long range objectives such as: 1. Financial Independence (able to support yourself in retirement) 2. College for your children or yourself 3. Giving – special major gifts 4. Lifestyle desires 5. Pay off debts 6. Start own business Session 4 Compounding Master Your Money – Unit 2 Log on to: www.money.cnn.com Click on calculators; under “Savings and Spending” click on “Quick Savings Calculator.” Plug in 0 for initial deposit; 7% interest per year; and $100 per month; put in the number of years until you reach age 66. Find out how much your savings will grow to. Print out this page. Log on to http://kiplinger.com Click on “Tools” on the left – at the bottom under “Your Finances” click on “More Your Finances Tools.” Under credit and banking, click on “How Much Will My Savings be Worth?” Do calculation using this information: amount invested 0; rate you can earn 8%; additional monthly deposits $100; years: 45; federal tax rate: 15; state tax rate 6%; inflation 3%. What will your investment be worth tax deferred?; how much if you pay taxes on the interest earned? Change the amount of monthly deposits to $200. What will your investment be worth tax deferred; how much if you pay taxes on interest? Log on to www.gefn.com Click on GE Credit Cards; list 5 or more benefits of getting this credit card; print out Log on to www.eyeoncredit.com List 2 low APR credit cards 6
  7. 7. List 2 cash credit cards Click on www.auto-buying- tips.com/credit_report/why_check_your_credit_report.htm Read – “Five Reasons to Check Your Credit Report Regularly.” List two of the five reasons given. Print out the article. Log on to www.crown.org Click on “links” and then on “online tools” and then on “Credit Card Minimum Payment Calculator.” Assume you owe $10,000 at 18% interest. How many payments will you need to make if you only make the minimum payment? What will your first month’s payment be? How much will you have to pay to pay off the $10,000 plus interest? If you were to keep paying the first month’s payment each month, how many payments would it take to pay off this loan? How much would you save in interest if you pay the same amount every month? Session 5 Planning for Your Financial Future – Goal Setting Master Your Money – Unit 3 Log on to http://money.cnn.com – click on Money 101 – select “Setting Priorities.” Read through all the pages including the links at the bottom of each page and do the exercise on setting your own long range goals and prioritizing them. Session 6 Finding Money You Never Knew You Had Master Your Money – Unit 4; Read KPGYM pp. 29-54 Log on to Money 101 website – click on “Controlling Debt.” At the bottom of each article, click to continue until you reach the calculator that shows how deep your debt is. Fill out the form and print it. Session 7 Managing Your Cash Flow Master Your Money – Unit 5 Log on to Money 101 – Making a Budget Handout 5 – Prepare a financial plan similar to handout, using computer disk containing an Excel spreadsheet provided by instructor Session 8 Don't Miss the Miracle Master Your Money – Unit 6 Session 9 Prepare Paper on Tithing – print out 7
  8. 8. Session 10 How to save on taxes Log on to Money 101 – Taxes IRA, 403(b), 401(k) – Read “How Money Works” pp. 28-32 Flexible Benefit Plan – read Handout 6 Schedule A deductions – read Handout 7 For pastors - Parsonage allowance - read Handout 8 - chapter 2 in Worth’s Income Tax for Ministers Session 11 Taxes – Log on to www.kiplinger.com Click on “Your Finances” on the left side of the screen; and then click on taxes in the drop down menu; read the following article: What the New Tax Cuts Mean to You After reading the above article go back one page and under “Getting Started” click on “More.” Under Taxes, read the following articles: Avoid These Tax Headaches Surviving an Audit Taking the Pain Out of Next Year’s Taxes Session 12 Read "How Money Works" pp. 1-26 Session 13 Read "How Money Works" pp. 33-44 Session 14 Prepare paper on a product; print out; review for mid term – see Handout 9 Session 15 Mid Term Exam Session 16 Banking – read KPGYM pp. 55-66 Log on to Money 101 – Basics of Banking Session 17 Housing – read KPGYM pp. 67-142 Log on to Money 101 – Buying a Home; and Home Insurance Log on to www.Kiplinger.com Click on Tools – Help for Home Buyers; find out how much your payments will be – plug in numbers that you think are appropriate; print out. Search for mortgage rates in our area; print out. Do the “How Much Can You Borrow” work sheet; print out. 8
  9. 9. To learn more about homeowners insurance, log on to www.Insure.com and on the right side of the home page near by the bottom, click on 12 ways to save on your homeowners insurance. Session 18 Cars and Insurance – read KPGYM pp 161-184 Log on to Money 101 – Buying a Car Session 19 Life Insurance - read KPGYM pp. 263-288 Log on to Money 101 – Life Insurance Log on to www.insure.com Find the following information: 1. The cost of $150,000 of life insurance on yourself 2. Print out the top 25 companies with the lowest cost insurance for the policy on yourself. Review Handout 10 – worksheet – determining the need for life insurance Session 20 Health Insurance and Insurance You Don’t Need - read KPGYM pp. 289-326; Log on to Money 101 – Health Insurance Session 21 Paper on God’s Financial Principles vs. Man’s Session 22 Investing - read KPGYM pp. 327-390 Log on to Money 101 – Basics of Investing Session 23 Investing - read KPGYM pp. 391-426 Log on to Money 101 – Asset Allocation Session 24 Retirement - read KPGYM pp. 449-492 Log on to Money 101 – Retirement Planning Session 25 Estate Planning and Wills - read KPGYM pp. 493-507 Log on to Money 101 – Estate Planning Review brochures regarding wills and being an executor Death of the Estate Tax – Handout 11 Session 26 Bankruptcy – Is It Biblical? – Handout 12 Session 27 Church Finances – Tax forms and filing requirements – Handout 13 Session 28 Church Finances – Budgeting – Handout 14 9
  10. 10. Session 29 Church Finances – Risk Management – Handout 15 – position description for a church treasurer. Handout 16 – Read “Stunned by an Inside Job.” Particularly notice the 6 steps the church took to insure financial integrity. Handout 17 – Additional Ideas on Managing Church Risk Review Handout 18 that gives information about the financial plan you are prepare for session 30 Session 30 Prepare and submit your Financial Plan; Handout 19 – a review for final exam. Session 31 Final Exam; also give a brief written comparison of the values of the Dow, Nasdaq, S & P 500, Washington Mutual A, Janus Worldwide, and IBM from the beginning of the course and the end of the course. Was the trend up or down? Did all of the numbers move in the same direction? About the Developer of the Course: David Krogh is a graduate of Oregon Bible College (now Atlanta Bible College). He also graduated from Davenport College of Business and then earned a Master of Business Administration degree from Keller Graduate School of Management. David served as a pastor in Grand Rapids, MI and as interim pastor of several churches: Flagg Center Community Church, Flagg Center, IL; Blessed Hope Bible Church, Rockford, IL; and East Oregon Chapel, East Oregon, IL. He became an employee of the Church of God General Conference and Oregon Bible College in 1972. He served in various administrative positions in the Conference and College. Eventually he was appointed President of the Bible College and the Conference, a position he held for 16 years. In 2001 he completed his work as President and now is Recruiter and Registrar for Atlanta Bible College. He also is a Financial Advisor for the General Conference offering financial and tax consultation for pastors and churches. He teaches several courses at the college and also conducts financial seminars around the country. He is active in a number of organizations. He is a member of the Board of Trustees of the Ministers Voluntary Retirement Association and Treasurer of the Investment Fund. He is the Treasurer for Proclaiming Christ, Inc., a religious charitable foundation. He is secretary of the Lord’s Harvest International Mission Board. He has visited several mission fields, including mission trips to Peru, Mexico, Haiti, and Thailand. He also serves as an occasional volunteer on weekends and during the summer at Camp Timber Ridge, a Girl Scout camp in Mableton, GA. He and his wife Lynne helped start the New Friends Bible Church in Morrow, Georgia in 1991. In 1994, they were part of the core group that started the Cornerstone Bible 10
  11. 11. Church in McDonough, GA. David is currently an elder and the Business Administrator for the Cornerstone Church. He is also a financial consultant to the Simple Teachings Bible Church that recently started in Hampton, GA. He is married to Lynne Knapp Krogh who is the full time director of Camp Timber Ridge, a Girl Scout Camp near Mableton, GA. David and Lynne have two children, Peter, an Atlanta attorney, and Carrie (Jerry) Briggs, a college student and restaurant employee. The instructor can be reached at dkrogh@abc-coggc.org or by phone at the office 404-362-0052 or his office direct line 678-553-4964, or home at 770-603-7506. Please contact him to clarify assignments or with questions about readings or other assignments. 11

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