1. Bonus Chapter D

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.  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.  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. 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 (HMO's)- 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 (PPO's)- are little more
investments. costly, and members are required to pay a co-
 Variable Life Insurance- is a form pay. The members of PPO's 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. Homeowner’s or Renter’s Insurance
Guarenteed replacement cost – the
insurance company with give you whatever it costs to buy
replacement items new
Depriciated cost - the current value of the item is
returned to you
Other Insurance
Auto
Umbrella policy - a broadly based insurance policy that
saves you money because you buy all your insurance from one
company

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. 401 K Plans – a savings plan that allows you to deposit pretax
dollars 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