ARE 142 - ARE 142 1 18-34 median net work was 11k Assets...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ARE 142 1. 18-34 median net work was 11k Assets- liabilities= net worth 2. think about retirement: Roth IRA 3. Average propensity to consume APC: a. Income spent b. Ex. earn $100 and spend $100 i. APC= 100/100= 100% c. Ex2: earn $100 and spend $90 i. APC = 90/100 = 90% 4. Marginal Propensity to Consume- the cost of one more a. How much do you spend for each additional dollar earned. b. That’s better than earning 100 and spending 101, like most Americans. c. If APC is 100%, MPC is likely to spend all additional dollars. 5. Where you can save: a. Short term (less than 1 year) i. Cash ii. Savings account iii. Money market deposit accounts iv. Money market funds b. Mid term (1-3 years) i. CDs ii. Bonds w/relatively short maturity c. Long term (3- years) i. Stocks ii. Real estate iii. Bond with longer maturity d. Retirement (depends on age but 20-40 years i. Tax free/ tax deferred accounts 1. IRE/ROTH IRE/401k/403b/Pension 6. Types of assets a. Financial i. Stocks/bonds/papers b. Tangible assets i. RE/cars 7. net work= assets-liabilities 8. Factors that determine income level a. Age i. Young, low income levels. Entry level jobs. 10 b. Married i. Married people generally have higher salaries than 2 single people. ii. Reasons: married people are older, marriage happens when they are financially stable. c. Location i. Nebraska vs California ii. SF vs Dixon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Education 9. Financial Planning 6 steps no need to memorize a. Define goals b. Develop plans c. Implement planes d. Periodically monitor budgets e. Evaluate results via financial statements f. Redefine goals and revise plans. 10. A complete financial plan considers a. Asset acquisition b. Liability and insurance c. Savings and investments d. Employee benefits e. Taxes f. Retirement/estate planning. 11. Inflation: a. Generally is below 5% b. Prevent values 12. Income a. Married couples 700k over lives with 2 incomes. i. Disparity increase bc smart rich people marry smart rich people. b. Many two income families that depend on second income to make ends meet. i. But there is higher expenses in taxes, child care and transport. 13. employee benefits. a. Health and life insurance, disability, long term care etc. 14. can use financial advisors if don’t want to do it yourself. a. Commission based i. Earn on each product they sell b. Fee based i. Hourly/complexity fee/hybrid c. Shit: vocab CFP and CPA i. CFP 1. certified financial planner 2. extensive edu but less than 1 year to complete at community colleges ii. CPA 1. certified public accountant 2. tax accounting 3. deals with more complicated financial issues and more specialized issues 4. real estate 5. investment options. iii. Cost of financial planners depends on type of planner and how complicated your plan is. 1.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page1 / 29

ARE 142 - ARE 142 1 18-34 median net work was 11k Assets...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online