Chapter 5 outline - Personal Finance Chapter 5 Monetary...

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Personal Finance Chapter 5 Monetary Asset (Cash) Management - encompasses how you handle all of your monetary assets, including cash on hand, checking accounts, savings accounts, money market accounts, other short-term investment vehicles, and longer-term savings instruments. The goal is to maximize interest earnings and to minimize fees while keeping funds safe and readily available for living expenses, emergencies, and saving and investment opportunities. 4 tools of Monetary Asset Management - 1. You need a low-cost, interest-earning checking account from which to pay monthly living expenses. 2. Maintain a small savings account in a local financial institution. 3. When income begins to exceed expenses regularly, you can consider opening a money market account which pays higher interest rates. 4. Your plan is complete when you transfer some funds into longer-term savings instruments because you want to earn even higher returns and still maintain safety. Financial Services Industry - providers of monetary asset management services such as checking’s, savings, credit, travelers checks, insurance, stocks, bonds, real estate, and more. Depository Institutions - organizations licensed to take deposits from and make loans to consumers, firms, or governments. They can offer some form of government account insurance on their customers’ deposits and are government regulated. Commercial Banks
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This note was uploaded on 03/19/2008 for the course FCE 238 taught by Professor Boyce during the Fall '07 term at Michigan State University.

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Chapter 5 outline - Personal Finance Chapter 5 Monetary...

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