Financial Planning Basics for Individuals (4 hrs)

Course No. A002
Format: Online pdf (67 pages). Printed book available.
Author: Walter G. Austin
Prerequisites: None
Advance Preparation: None
Level: Basic
CPE Credit: 4 hrs.
Field of Study: Finance
Course expiration:  You have one year from date of purchase to complete the course.
Course Revision Date: January 2022

After studying this course, you should be able to:

• Identify details of the data-gathering portion of the engagement.
•  Identify personal and financial goals.
•  Recognize the various kinds of risks associated with investing.
•  Identify other information to be used in the financial planning process.
• Identify the process of financial planning and the risks involved.
•  Recall the different kinds of life insurance available and the guidelines as to which may be appropriate.
• Recognize investment choices and the time frame involved.

Course Contents:

1. Data-Gathering and Determining Objectives
1.1 Overview
1.2 Basic Data Gathering Information Needed
1.3 The Data Gathering Session
1.4 Budget and Tax Returns
1.5 Balance Sheet
• Bonds
• Individual Stocks
• Mutual Funds
• Limited Partnerships
• Own Business
• Retirement Plans, IRAs, SEP, 401(k), 403(b), others
• Real Estate owned
• Automobiles
• Liabilities:
o Credit Card balances and payments
o Notes payable to Banks
o Other Liabilities
1.6 Overview of your goals
1.7 Your Personal Goals
1.8 Your Financial Goals
1.9 Your Objectives
1.10 Problems in Achieving Objectives
2. Investing and the Risks Involved
2.1 Ability to Evaluate
2.2 Determining Your Investment Attitude
2.3 Approaches to Investing
2.4 Risk Overview
2.5 Business and Market Risks
2.6 Interest Rate Risk
2.7 Interest Rate Risk as a Function of Time
2.8 Purchasing Power Risk (Inflation)
2.9 Measurement of Risk
2.10 Measurement of Performance
2.11 An Investment Approach to Risks
3. Other Information Needed
3.1 Overview
3.2 Your Ability to Handle Market Risks
3.3 Relationship between Time and Risks
3.4 Your Expectations
3.5 Guideline to be Used
3.6 Loss Tolerance
3.7 Downside Tolerance
3.8 Insurance Information Needed
3.9 Other Information Needed
3.10 Effective Communication
3.11 Can You Help Yourself?
3.12 Financial Statements
4. Determining the Financial Plan and Risk Management
4.1 Overview
4.2 Determining Recommendations:
4.3 If You Have No Insurance
4.4 Emergency Funds and Credit Cards
4.5 Incapacity of a Dependent
4.7 Do You Need Life Insurance?
4.8 Amount of Insurance Needed
4.9 Importance of Portfolio of Beneficiaries
5.1 Term Insurance
5.2 Permanent Insurance-Whole Life
5.3 Universal Life Insurance
5.4 Variable Life Insurance
5.5 Buying Term versus Variable Life
5.6 Importance of Strong Insurance Company
5.7 Disability Insurance
5.8 Long-term Care Insurance
5.9 Property Insurance
6. Investment Selection
6.1 Overview
Reasons Not To Invest
6.2 Basic Investment Objectives
6.3 Purchasing Power Problems
6.4 Choosing the Investment Portfolio
6.5 Diversification
6.6 Market Timing
6.7 Variable Annuities
6.8 Variable Life as an Investment Vehicle
6.9 Measures of Investment Returns
6.10 Taxation Concepts Relevant to Financial Planning
6.11 Asset Allocation
6.12 Education Funding
6.13 Retirement Funding
6.14 Managing Existing Portfolios
6.15 Implementing the Plan