Finance 3060

Fundamentals of Financial Planning

Fall 2013

Instructor:Robert Woosley

Office:Finance Dept. - TBD

E-mail: & **Email both**

Cell Phone:225-235-1039

Office Hours:By appointment

Text and Supplies:

  1. Personal Finance, Garman & Forgue, 11th Edition.
  2. Obtain a copy of your free credit report by using
  3. Obtain a copy of an actual insurance policy and the most recent statement containing coverage and cost for the following:
  • Auto Insurance
  • Homeowner’s or Rental insurance
  • Life Insurance
  • Health Insurance
  1. Documents from the document check list – To be used for Financial Plan

Course Objectives:

Development of bases for decision making related to family income, saving, and spending.

Student Learning Objectives

  1. Effective Communication
  2. Effectively communicate information and knowledge in a professional manner, especially via writing, speaking, and visuals.
  3. Financial Planning Process
  4. Diagram the personal financial planning process as defined by the CFP Board’s Job Task Domains and Financial Planning Practice Standards.
  5. Recognize unethical practices in the financial planning profession based on the CFP Board Standards of Professional Conduct.
  6. Financial Statements
  7. Complete a personal financial profile form similar to one that a client is likely to be requested to fill out.
  8. Construct financial statements such as a net worth statement and a cash flow statement.
  9. Evaluate financial statements using ratios by comparing them to relevant norms.
  10. Cash Flow Management
  11. Communicate the need for liquid assets and emergency funds and recommend strategies for accumulating the appropriate levels of funds.
  12. Calculate savings required to meet financial goals and recommend how to incorporate planned savings into the cash flow plan.
  13. Financing Strategies
  14. Analyze the various sources of borrowing available to a client and communicate the advantages and disadvantages of each for meeting a client’s financial goal.
  15. Explain and compare appropriate financing strategies for purchasing a home.
  16. Economic Concepts
  17. Apply the following economic concepts and measures in making financial planning recommendations: opportunity cost, marginal utility/cost, economies of scale, fiscal policy, and monetary policy.
  18. Time Value of Money
  19. Calculate present value and future value of single amounts and serial payments.
  20. Calculate amortization payments and annual savings required to meet a goal.
  21. Consumer Protection Laws
  22. Describe consumer laws that impact clients, including bankruptcy, banking, credit, privacy regulations, and other relevant laws.
  23. Principles of Risk and Insurance
  24. Explain the risk management process.
  25. Provide examples of the primary risk management techniques available to clients.
  26. Describe how insurers use risk pooling to pay for losses incurred by policyholders.
  27. Explain the factors that affect policyholder premiums and recommend strategies for reducing household insurance costs.
  28. Analysis and Evaluation of Risk Exposures
  29. Using a copy of an actual policy, evaluate the coverage provided by each of the following: automobile insurance policy, property insurance policy, health insurance policy and life insurance policy.
  30. Health Insurance and Health Care Cost Management (individual)
  31. Compare and contrast group and individual health insurance alternatives, including fee for service and managed care health plans.
  32. Explain alternatives for acquiring health coverage including COBRA and Medicaid.
  33. Disability Income Insurance (individual)
  34. Describe differences between short-term and long-term disability plans and identify the policy provisions that should be included in privately-purchased disability policies.
  35. Life Insurance (individual)
  36. Explain the underwriting factors commonly used in the life underwriting process.
  37. Differentiate between term, whole life, variable, universal, and VUL policies and select the most appropriate type of coverage to match a client's specific circumstances.
  38. Types of Investment Risk
  39. Identify, measure, and differentiate between types of investments risks.
  40. Income Tax Law Fundamentals
  41. Compare and contrast the fundamental components of the income tax system including filing forms, filing status, income, exemptions, exclusions, deductions, adjustments, credits and tax rates.
  42. Explain how a progressive income tax system works and contrast it with other tax systems.
  43. Compute marginal and average tax brackets and explain the appropriate use of each.
  44. Social Security (OASDI)
  45. Provide an overview of the Social Security system, including the payroll taxes and benefits structure and advising clients in consideration of proposed program reforms.
  46. Explain qualification requirements for Social Security benefits.
  47. Explain the computation of the Average Indexed Monthly Earnings (AIME), the Primary Insurance Amount (PIA), disability, survivor and maximum family benefits.
  48. Methods of Property Transfer at Death
  49. Describe the probate process.
  50. Describe the advantages of having a will.
  51. Identify where one’s possessions will go if one dies intestate.
  52. Client and Planner Attitudes, Values, Biases and Behavioral Characteristics and the Impact on Financial Planning.
  53. Evaluate how a client’s values, including cultural and religious values and attitudes will affect his/her goals and a planner’s recommendations.
  54. Describe how behavioral psychology, such as a client’s comfort zone impacts a client’s objectives, goals, understanding, decision making and actions.
  55. Networking with Financial Planners
  56. Attend professional meetings such as the Financial Planning Association, Society of Financial Service Professionals, etc.
  57. Visit a CFP’s office.

Course Structure:

  1. Review the text book chapter prior to class
  2. Lecture – highlights of the text topic
  3. Developing Financial Plan
  4. Assignments
  5. Interviewing client / Data Collection
  6. Presenting financial plan
  7. Guest Speakers –
  8. Mandatory attendance
  9. Reflections posted Digital Learning Portfolio (by due date)
  10. Exams – text, assignments, lecture, speakers
  11. Build toolbox –
  12. Post articles Digital Learning Portfolio
  13. Present articles in class
  14. Communication:
  15. This is a certified Communication-Intensive (C-I) course which meets all of the requirements set forth by LSU’s Communication across the Curriculum program, including
  16. instruction and assignments emphasizing informal and formal writing and visual
  17. teaching of discipline-specific communication techniques
  18. use of draft-feedback-revision process for learning
  19. practice of ethical and professional work standards
  20. 40% of the course grade rooted in communication-based work
  21. student/faculty ratio no greater than 35:1.
  22. Students interested in pursuing the LSU Distinguished Communicators certification may use this C-I course for credit. For more information about this student recognition program, visit

Assignments:

  • All assignments are to be posted to the Digital Learning Portfolio!!!
  • Reflections Diary – You are to keep a journal after each week of class. Each entry should be 300 – 400 words reviewing the discussion in class or speaker. These are due by Sunday following the week of class.
  • Building a Financial Toolbox – It is imperative that you build a library on financial topics that you can draw upon as you face various personal and business issues. Along with your reflections diary entry, please upload an article that you found and read to your Digital Learning Portfolio. Please bullet 3 or 4 points that the article references. You need 2 articles per week at a minimum. Please be prepared to discuss the articles in class. These are due by Sunday following the week of class.
  • Creating a Financial Plan – We will be developing a financial plan in class. This includes interviewing a client, data gathering, reviewing his or her documents, and presenting a plan. We will start with a career plan for each of you. We will create a budget and financial statements for the client. We will review insurance policies, estate documents, and financial statements. From these, we will make recommendations.

Course Regulations and Policies:

  1. The grading and evaluation policy is very strict and will be determined by simple mathematics. The grade that is given will be the grade that is earned!!! The grading distribution and scale for this class is as follows:

Weight Grading Scale Grade

Exam I 25% 90-100 A

Exam II 25% 80-89 B

Exam III 25% 70-79 C

Class, Assignments, Financial Plan, Portfolio 25% 60-69 D

100% 0-59 F

  1. Attendance: Students are expected to attend classes regularly and actively participate in discussion. Exams will be taken as scheduled. Exams are given only on the scheduled date. Unless there is a documented emergency medical reason, a documented family emergency, or a documented civil responsibility, and the professor is notified before the exams, make-up exams will not be given. Make-up exams may be different in format from the regularly scheduled exam (and considerably more difficult). Exams could consist of: Multiple Choice, Problems, Cases and Discussion.
  2. Academic Integrity: Cheating or violating any academic policies in the LSU Code of Student Conduct will result in an automatic F.
  3. Use of Moodle: Each student is required to check Moodle on a regular basis. I will use Moodle to post the course syllabus and revisions when changes are made, post additional readings, post assignments, and post grades.
  4. Changes in Course Content or Schedule: Changes in course content or schedule may occur.
  5. Student Responsibilities:
  6. Read the relevant material before coming to class.
  7. Respect your fellow students and the professor by being in class on time and having your cell phone turned off.
  8. Obtain any information, notes, handouts, etc. that you miss due to an absence from class.
  9. Maintain your Digital Learning Portfolio. While this will serve as a comprehensive product of your learning throughout this semester, it will also be useful to you as a platform in which you can continue to evolve as a professional portfolio to market yourself as a skilled graduate.
  10. Ask questions when you are uncertain about assignment or course materials. If you don’t understand, it is likely that others in the class are confused as well.
  11. Seek help from CxC Business Studio (Business Education Complex, Room 2019) and CxC Studio 151 (Coates Hall, Room 151) if you need help with communication-intensive assignments (writing, speaking, visuals, etc.).
  12. See the Professor immediately if there is a question about grades (each grade and the semester grade that you earn will be final unless there was an error in calculation or recording).
  13. Check Moodle to make sure that the grade recorded is your correct grade.
  14. Students may be charged with misconduct for any of the following: Intentional disruption of, obstruction of, or interference with any teaching, research, administrative, disciplinary, public service, learning, programmatic or other authorized University activity; failure to comply with official regulation, order or instruction of duly designated authority, agency, or agent of the University (taken from the LSU Student Code of Conduct-

Date / Class Topic / Text Chap. / Financial Plan / Assignment
Aug. 27 /

Introduction

29 / Introduction to Wealth Mgt., / Read “What are the Four LifeValue?”; Take Quiz
Sept. 3 / Understanding Personal Finance; Career Planning / 1, 2
5 / Financial Statements, Tools, and Budgets; Time Value of Money / 3;
Appendix A / Career Plan / Reflections Diary;
Toolbox entry
Due 9/8 by 11:59pm
10 / Financial Planning Process / Article Day
12 / Guest Speaker: Rebecca Burdette, Associate Director, LSU Communication across the Curriculum Program
Discussion Topic: Introduction to CxC /
Set-up Digital Learning Portfolios
Please bring your laptop to class / Reflections Diary;
Toolbox entry
Due 9/15 by 11:59pm
17 / Managing Income Taxes / 4 / Bring Tax Return / GO
19 / Managing Checking and Savings; Building a Reserve; Cash Management / 5 / Goals; Objectives; Concerns / Reflections Diary;
Toolbox entry
Due 9/22 by 11:59pm
24 / Discussion Topic: Money Habitudes / Budget & Financial Statements
26 / Guest Speaker: Claire Loup, Economic & Financial Education Specialist, Federal Reserve Bank of Atlanta

Building and Maintaining Good Credit; Credit Cards and Consumer Loans

/ 6, 7 / Reflections Diary;
Toolbox entry
Due 9/29 by 11:59pm
Oct. 1 / Vehicle and Other Major Purchases; Obtaining Affordable Housing; / 8, 9 / Article Day
3 / Exam I / Reflections Diary;
Toolbox entry
Due 10/6 by 11:59pm
8 / Guest Speaker: Emily Hester, Coordinator, LSU Student Financial Management Center
Discussion Topic: Financial Assistance on College Campuses Focusing on LSU
Check out the Student Financial Management Center website to class / Debt analysis & Ratios
10 / Managing Property and Liability Risk; Managing Health Expenses / 10, 11 / Reflections Diary;
Toolbox entry
Due 10/13 by 11:59pm
15 / Life Insurance Planning / 12
17 / Guest Speaker: Guest Speaker: Jim Boyd, E. J. Ourso College of Business, Department of Finance
Discussion Topic: Property and Liability Risk: Automobile Insurance,
*Bring printout of Auto Insurance Policy & Coverage Statement to class / Life Insurance Review / Reflections Diary;
Toolbox entry
Due 10/20 by 11:59pm
22 /

Review

/ Article Day
24 / Exam II
29 / Investment Fundamentals, Investing in Stocks and Bonds, / 13, 14
31 /

Investing Through Mutual Funds

/ 15 / Reflections Diary;
Toolbox entry
Due 11/3 by 11:59pm
Nov. 5 / Real Estate and High-Risk Investments / 16
7 / Off – Fall Break / Reflections Diary;
Toolbox entry
Due 11/10 by 11:59pm
12 / Retirement Planning, Social Security (OASDI) / 17
14 / Guest Speaker – Joseph Ferguson, Public Affairs, Social Security Administration
Discussion Topic:Social Security Tax (OASDI) / Retirement Plan and Social Security Analysis / Reflections Diary;
Toolbox entry
Due 11/17 by 11:59pm
19 / Estate Planning
21 / Review / 18 / Article Day / Reflections Diary;
Toolbox entry
Due 11/24 by 11:59pm
26 / Guest Speaker: Paul Thompson, Portfolio Manager, & Rachel Cattelino, Financial Advisor, Morgan Stanley
Discussion Topic: Understanding Risk and the Markets; Developing a properly allocated portfolio. / Estate Plan
28 /

Off - Thanksgiving

/ Reflections Diary;
Toolbox entry
Due 12/1 by 11:59pm
Dec. 3 / Financial Plan - Presentation
5 /

Financial Plan - Presentation

9 - 13 /

Exam III – Date TBD

**Exam dates and material are tentative and subject to change.**

Building Your Toolbox

Topic / Suggested Articles Reading
Financial Independence:
Personal Finance /
  • “What are the Four LifeValues” – Lois Vitt
  • Take “LifeValue” Quiz;
  • Behavior Finance
  • Money Habitudes

Financial Planning:
Financial Goals
Cash Management
Investment Management
Asset Allocation
Tax Planning /
  • Creating Financial Goals;
  • FDIC, SPIC, Regulatory Bodies (Government & Industry);
  • Creating a Budget;
  • Why do I need a financial plan?;
  • Investment Policy Statements;
  • Value of Asset Allocation;
  • Evaluating risk for investments;
  • Risk Tolerance
  • Taxable vs. Tax Free
  • Tax Strategies and Reduction Planning

Liability Issues:
Goal Protection
Income Protection
Liability Insurance
Long-term Care /
  • Bankruptcy;
  • Consumer Protection Laws;
  • Indentify Theft;
  • Evaluating Insurance;
  • Understanding Health Insurance;
  • Disability Insurance;
  • Long-term Care Insurance;
  • Umbrella Coverage

Family Planning:
College Planning
Child Living Expenses
Parents
Career Planning /
  • What do you need to know when buying a house?
  • Education Plans: 529s, Education IRAs, Coverdale IRAs;
  • Cost of Raising a child;
  • Children with Special Needs
  • Generational Planning – Sandwich generation;
  • Financial Aide Process
  • (Loans, grants, scholarship)
  • Value of a College degree; Value of Graduate degree (MBA, JD, etc.)
  • Evaluating a Job Offer
  • Cost of Moving
  • Requirements of becoming a CFP

Retirement Planning:
Retirement Plans
Social Security
Health Care/Medicare /
  • Corporate Plans: 401k, SIMPLE, SEP;
  • IRAs;
  • Defined Benefit vs. Defined Contributions
  • Qualified vs. Non-Qualified Plans
  • Retirement Gap for Executives
  • Social Security – Old Age
  • Social Security – Disability
  • Health Insurance
  • Medicare

Estate Planning:
Wills
Trusts
Heirs
Charitable Giving /
  • Wills
  • Health POA
  • Living Will
  • Durable POA
  • Trusts
  • Beneficiary Planning
  • Estate and Gift Taxes
  • Asset Titling
  • Charitable Trust
  • Donor Advised Funds
  • Legacy Planning