The most important lesson I learned this week is the importance of finance statement and how
to use them to evaluate companys financial or individuals stand and how profitable investment in the
company might be. I also learned about the importance of acco
systematic risk determines volatility
asset beta takes debt out of the equation
use when our target debt equity ratio is going to change
assume that asset beta is styaing the same
apply new d/e ratio to determine new equity ratio
\financial risk exists be
Youth of This Generation
Plato quoting Socrates "The children now love luxury; they have bad manners,
contempt for authority; they show disrespect for elders and love chatter in
place of exercise. Children are now tyrants, not the servants of their
Wealth of Great Health
What is Health Insurance?
$100,000 Heart Surgery Who pays for it?
Monthly Premiums Monthly Payments to your Insurance Company
(Average family medical premium is $1,300 per month)
Deductible The first amount that you have to
The Science of Personal Prosperity
1. Behavioral Intelligence
a. High Impact Motivators
2. Financial Intelligence
a. Critical Information
3. Community Intelligence
a. More than Ourselves
Finding the common area of these three intelligences is what we are
The Science of Personal Prosperity Part II
Liquidity (or liquid) An asset is considered liquid in an institutional sense if it can
be converted to cash within one year WITHOUT losing significant value (or selling
much lower than mar
The Millionaire Next Door
What Percentage of All Millionaires Are First Generation
Portrait of a Milllionaire
-Age X Pre-taxed income/10
Facts about Millionaires
Table 3-1 - Dr North and
Prosperous Career Building
What does Google look for when hiring?
1. General cognitive ability
a. Learning ability
b. Ability to process on the fly
c. Pull together disparate bits of information
2. Emergent Leadership
a. Member of a team
b. At the appropr
Prosperous Planning Partners
Elder Ashton Who is going to manage money in your marriage?
Questions to Ask before marriage
How much money do you earn?
Can I see a copy of your credit report/score and tax returns?
Have you ever filed for bankruptcy and are
Purchasing shares of a company and are an owner. Company with a Million
Shares sells you 100,000 Shares, then you own 10% of the company.
Company makes money and the value of your shares go up, so you make
money (called a capital gain).
More Money Than Youll Ever Need
Build, Learn and Dream as if youll be here forever!
Rule of 72
Divide 72 by the yield (i.e., % of return).
The amount of time it takes for your investment to double.
Investment with a 6% return. 72/6 = 12. It would take 12
The Millionaire Next Door
1. Inconspicuous Lifestyle
a. Not spending lavishly on nonessentials
a. Have a mentor. Someone to report to and be accountable to.
b. Example of success.
c. No commission of profit from advice.
d. Tax advisors preferred
Million Dollar Choices
X 10% 401(k)
I 1% Accelerated Debt Reduction
I Do 1 Million Dollar Choice-A one-time choice that will increase your POC assets
by multi-millions. (Make 1 MDC per year, equivalent to about 1% of your yearly
Hit for the Cycle
First Base: SUFFICIENT
o Income is sufficient for expenses
o No meaningful investments
o 95% of all Americans are here
Second Base: HXII
A believable achievable formula
Point of Choice
Less than 5% of Americans
Third Base- Exponential
Where did Insurance start?
In the British bar, Lloyds of London. Sailors pooled together money to insure
against loss of their ships (piracy, wreak, etc)
What are we insuring against?
It is not possible to insure against all risk
1. Elder Ballard: Face the future with optimism. I believe we are standing on
the threshold of a new era of growth, prosperity, and abundance. Barring a
calamity or unexpected international crisis, I think the next few years will
1. Pay by Credit Card
a. Builds your credit score
i. Your credit is used by
3. Insurance companies
4. Mobile phone companies
5. Government Departments
6. Utility companies
7. Dating partners
b. Can receiv
3 Stages of Point of Choice
1. Pre-Point of Choice
2. Point of Choice
o Reverse Mortgage
o 401(K) Distributions
o Pension Benefits (possibly obsolete when we retire)
o Social Security (DO NOT RELY ON THIS)
o Real Estate Inc
Americas Financial Future
Ponzi Scheme When someone uses new investors money to pay off an old investor.
TOTALLY ILLEGAL DO NOT DO THIS Dont Be Bernie Madoff.
-33% of University Presidents said that Higher Education is going in the wrong
direction and 50%
1. Which of the following statements is correct?
a. An ordinary annuity has payments at the end of each period continues
b. An annuity due has payments at the beginning of each period continues f
1. Bonds will sell at par when their coupon rate is _ the discount rate.
a. Higher than
b. Equal to
c. Lower than
d. Not enough information
2. Which of the following S&P ratings applies to the most
Topic 2 Practice Exam
1. By definition, the change in cash must equal:
a. Cash flow from operations plus the change in total assets.
b. Cash flow from financing less the change in gross fixed assets.
c. Cash flow
Topic 4 Practice Exam
1. What is the sustainable growth rate if a firm has a net margin of 15%, a total asset
turnover of 2, a debt-to-equity ratio of 1.5 and a retention ratio of 40%?
Topic 3 Practice Exam
1. Firm A has a current ratio of 2.00 and a quick ratio of 1.50. Corresponding industry
average ratios are 1.80 and 1.40. Which of the following comparisons most
accurately describes Firm
1. In bankruptcy, claimants are paid in the following order:
a. Common stockholders first, debt holders next, and preferred stockholders
b. Preferred stockholders first, common stockholders next, and debt
Use the following information and the percent-of-sales method to answer questions 5-7.
Below is the 2008 year-end balance sheet for Banner, Inc. Sales for 2008 were $1,200,000 and are
expected to be $1,600,000 during 2009. In addition, we know that Banner
The following balance sheet and income statement should be used for questions #1 through #3:
2005 Income Statement
Less: Cost of goods sold
Earnings before interest and taxes
Nail It then Scale It covers several key points that are crucial for any entrepreneur to understand.
My hypothetical business revolves around an app, designed to show the specific location of goods in a
grocery store, eliminating time spent wandering aiml