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Personal Finance

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Personal Finance

  1. 1. Bonus Chapter D
  2. 2.  Financial Planning Begins with Making Money Six Steps to Controlling your assets  Take an Inventory of Your Financial Assets  Keep Track of All Your Expenses  Prepare a Budget  Pay Off Your Debts  Start a Savings Plan  Borrow Only to Buy Assets that Increase in Value or Generate Income
  3. 3.  Real Estate: Historically, a Relatively Secure Investment  real estate bust of 2008-2009  history shows that home prices are likely to rise again and will continue to provide several investment benefits Tax Deductions and Homeownership  Benefits  How the Government Helps
  4. 4.  Learning to Manage Credit  Credit cards are an important element in your personal financial system, even if you rarely use them  Advantages and Disadvantages Where to Put Your Savings  Contrarian Approach – buying stock when everyone else is selling or vice versa
  5. 5. TYPES OF INSURANCE HEALTH INSURANCE Term Insurance- is the simplest and  Health Maintenance least expensive form of insurance. It is pure insurance for a given number of years. Organizations (HMOs)- are less Whole Life Insurance- is a expensive than other health insurance providers, combination of a pure insurance plan and a but the members can not choose their own savings plan. This type of insurance is great doctors. for people who find it hard to save money. With a universal policy, you can choose how  Preferred Provider much of the money you pay goes to insurance and how much goes toward Organizations (PPOs)- are little more investments. costly, and members are required to pay a co- Variable Life Insurance- is a form pay. The members of PPOs are allowed to of whole life insurance that invests the cash value choose their own doctors. of the policy in stocks or other high-yielding securities. Insurance companies began selling  Disability Insurance -is a annuities because they realized, people wanted to supplement for health insurance policies. Disability protect themselves from running out of money before they die. insurance pays part of the cost of a long-term sickness or an accident. The cost is low when you think about the benefits it supplies.
  6. 6. Homeowner’s or Renter’s InsuranceGuarenteed replacement cost – theinsurance company with give you whatever it costs to buyreplacement items newDepriciated cost - the current value of the item isreturned to you Other InsuranceAutoUmbrella policy - a broadly based insurance policy thatsaves you money because you buy all your insurance from onecompany
  7. 7.  Social Security  the term used to describe the Old-Age, Survivors, and Disability Insurance Program established by the Social Security Act of 1935  62 years old Individual Retirement Accounts (IRAs)  59.5 years old+  Roth  Traditional ▪ tax deferred contributions – retirement account deposits for which you pay no current taxes, but the earnings gained are taxed as regular income when they are withdrawn at retirement
  8. 8. 401 K Plans – a savings plan that allows you to deposit pretaxdollars and whose earnings compound tax free until withdrawal,when the money is taxed at ordinary income tax rates - Keogh Plans - Financial Planners - Estate Planning - will: a document that names the guardian for your children, states how you want your assets distributed, and names the executor for your estate - executor: a person who assembles and values your estate, files income and other taxes, and distributes assets