Week 9 Investment Basics Assignment Review

The Perfect Investment

In this week’s assignment, you’ll learn a few important basics about investing, including asset classes. Over the next two weeks, you’ll learn the 4 Investment Strategies designed to maximize returns in your portfolio while minimizing risk.

Retirement Analysis

You will incorporate what you learn in the investment section of this course by using your financial plan (Retirement Analysis) to highlight your probability of success before and after applying what you learn about investing into your plan.

The Perfect Investment

Well, there may not actually be a “perfect” investment, but matching funds in your 401k comes as close as anything I’ve ever seen.

401K Match

Many companies offer to match money we put into retirement accounts, and that’s free money! It doubles your income immediately, and it will multiply your savings over time.

Sadly, I’ve known a number of people who didn’t take advantage of this incredible opportunity. If your employer offers it, do whatever you need to do to get the maximum you can get. You might not be able to afford the latest gadget for your computer, the newest iPhone every time a new one comes along, but you’ll have something far more valuable: peace of mind that your future is looking good!

How it Works

- Get The Match!

- Tax Deduction

- 15% Baby Step

- $100k Example

Planning Portal

Login to your Planning Portal and take a quick look at your Retirement Analysis.

- Take a Screenshot showing your Probability of Success

- Before Moving Forward

- Grab a screenshot of your Probability of Success

- Include the Action Items dropdown list

- Grab a screenshot of your Income Data Cards

- Grab a screenshot of your Savings Data Cards

- Grab a screenshot of your Expenses Data Cards

Add your 401k to your plan

Based on your Dream Job, be sure to include…

- How much will you be investing in your 401K?

- What is your company “Match”?

- What is your goal for Retirement?

- Age?

- Monthly Income?

- How are you feeling about reaching that goal?

Take a closer look at your Plan

- List Three Options can you consider to improve the probability of success in your plan.

- Grab a new Screenshot for your Retirement Analysis

- How did your options “move the needle” on your probability of success?

Include a screenshot for this week’s Quiz

Insurance 101 Assignment: Add Home and Auto Insurance to Your Plan

Insurance (Risk Management) is an essential element of Personal Finance. You’ll spend a lot of money buying insurance in your lifetime. So, a little insurance knowledge can help you Make Your Money Count.

This week, we’re focusing on Property and Casualty insurance. In this assignment, you will add insurance to your financial plan. The following information will help you understand Homeowners and Auto Insurance so that you can add the coverage you need to protect your investment (your new home and car).

Part One: Get Auto Insurance Quote

Obtain One Auto Insurance Quote online (or in a local insurance agency).

You can use your actual car, a family car, or a friend’s car to obtain the quote. Or, feel free to use the car you “pretended” to buy in your credit crush assignment for the auto quote.

Save the quote (PDF) along with your comments related to each coverage you selected - see below, Part Three.

Be sure to address the following coverages in your comments:

— Collision and Deductible (Earn 5 extra points by getting a quote for more than one deductible. How much will you save if you take a $1,000 deductible? Is it worth it? Or, how much more will you pay if you take a $250 deductible?)

— Comprehensive and Deductible

- Consider getting a quote for more than one deductible.

- How much will you save if you take a $1,000 deductible?

- Is it worth it? Or,

- How much more will you pay if you take a $250 deductible?)

— Liability 100/500/100 (address each of these three numbers and what they mean)

— Rental

— Emergency Road Service

— Personal Injury Protection 2500/5000/10000

— Medical Payments Coverage 2500/5000/10000

If you’re employed, you will want PIP (Personal Injury Protection); if you’re unemployed, you will want MPC (Medical Payments Coverage).

— Uninsured

— Underinsured

Also discuss any other coverage offered by the agent you meet with or talk to online. In order to receive full credit for this assignment, you will need to convince me that you understand each of the coverages listed above.

— What is a deductible? How does it work? Explain that, too.

Part Two: Add Auto and Homeowners Insurance to Your Plan

Link to this post:

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Bargaining and Negotiating Assignment

October 5, 2021 Zoom Meeting for Personal Finance at the Bauer College of Business at University of Houston. Watch it on YouTube

Bargaining and Negotiating Skills with Ramit Sethi

Based on what you learned this week about bargaining — and negotiation skills -- tell me your story:

Bargaining and Negotiating Resources

• Spend 30 minutes or so and do some research *on Bargaining and Negotiating*
• Share 2 YouTube Video Links and 2 articles *About Bargaining and Negotiating* that you found helpful
• Briefly Summarize each video and each article
• Tell me why you chose these resources to include in this assignment
• Post Your Comments and at least one helpful link
• This is your weekly "Class Collaboration Assignment"
• Post in MoneyStudyGroup.com or
• On our Facebook Page or
• On LinkedIn or
• On YouTube
• Tell me what you learned from Ramit Sethi about Salary Negotiation and why it matters.

List and Summarize Your Top 7 Bargaining Tips, Skills, Ideas

Share what you learned this week. I’m especially interested in knowing how you will put these tips, tools, skills, and ideas into practice in your own life based on the big idea of this week’s lesson.

Who do you know Who is a Master Negotiator?

Why is this person good at Bargaining and Negotiating? What makes them good at bargaining and/or negotiating?

Tell Me More

• If you love to bargain and negotiate
• If you hate to bargain and negotiate
• If it feels like a fun game for you
• If feels awkward and painful

About Your Expericene

• What have you "negotiated" lately?
• What was that like for you?
• What did you learn in the process?
• Will you be negotiating more in the future?
• *What will you be negotiating* more of in the future?
• Make a list of 10 things you plan to negotiate in the future:
• In the next 24 hours...
• In the next week...
• In the next month...
• In the next year...

Your Article should be about 800 — 1000 words (50 points).

As always, please format your article with a title, an introduction, and feel free to use images if you like. Upload either a Word or PDF file to BB.

7 Rules, Boundaries, and Opportunities for Bargaining and Negotiating

This is my list 7 principles related to Bargaining and Negotiating, this is not so much a list of skills as it is a list of things to think about as you work on developing your Bargaining and Negotiating Skills.

• Negotiate Anything and Everything
• Exercise Your Walk-Away-Muscle
• Practice the Daily Discipline of Patience
• Comparison Shopping Builds 3 Kinds of...

Student Comments from Week 1

YouTube Comments

Lance Fontenot

I have been managing my finances well and I feel confident in my money managing skills currently, but I do worry about how that will change once I take on more expenses. I always feel like I could be saving more, and I anticipate that saving will only be more difficult in the next couple of years. I hope to gain skills in managing my expenses to be able to optimize my savings for the future.

Hela Ali

I feel anxious thinking about financial freedom and how to manage my finances right now and after graduating college. I took this class because I know there is so much more to saving money. I'm excited to learn about all these different ways I can grow my income and feel confident spending money.

Averie Beaty

The thought of having to manage my money seems overwhelming but I honestly believe that once I get the hang of it, it won't be as difficult of a task to manage. I think that people get overwhelmed when they feel as if they have no direction or guidance, but after completing educational courses such as this one, I think it'll give more people peace of mind. The challenge I anticipate being faced with is the discipline that comes with having to save my money and keeping myself within a budget because it is not something that comes easy for me, but it will definitely be rewarding to see the benefits of me doing so.

Jazmin Miralda

I've improved my spending habits significantly, but I always worry if I've saved enough money for the future. I'm looking forward to learning how to better save and what channels I can use to invest my money into.

sophie robertson

Hello Professor! Managing money as an adult can weigh very heavy mentally on the head but it is important to make good choices when it comes to financials and if you are smart 90% of the time, everything will be okay! Currently my troubles of saving just come from mindless spending on dinners and nights out, which add up pretty fast. In order to accomplish my goals I need to start budgeting myself and cut down on the mindless spending and start investing in my future.

Part Two: 3 Laws of Personal Finance

The 3 laws of personal finance are:

• Personal Finance Law #1
• Personal Finance Law #2
• Personal Finance Law #3

Some people think this is a very bold claim; every college graduate can be a millionaire by age 50.

When you obey these 3 laws of personal finance, you discover the truth. Saving a million dollars in 30 years is really not mission impossible.

Part Three Week 2 Assignment: Budget

Summer School 2021

Capstone Review

4 Goals for Your Capstone Assignment

- Earn 250 of the 950 Points Needed for an “A” (50 Points Extra Credit)

- Define and Describe the Essential Elements of Your Financial Plan

- Create a Capstone Report to Illustrate Your Financial Plan

- Demonstrate Your Understanding of Cash Flows in Your Plan

• - Detailed Expenses Pre-Retirement
• - Investment Distributions
• - Other Inflows and Outflows Impacting Probability of Success

The Capstone Report

The Essential Elements

- Watch The Capstone Assignment Video (https://youtu.be/x2VYDschix8) in Money Study Group

- Review the Course Material Posted in Money Study Group

- Create Your Final Report and Upload in BB

- For each of the Essential Elements listed below, include the following:

— Include Screen Shots

— Tell me What Changes You Made, if any, Before and After each element.

— Address the specific questions listed next to each element.

Balance Sheet

- Assets

- Liabilities

- Net Worth

Budget

- Be sure to include your detailed budget in the screenshot.

- If you did not link your credit/debit card, explain why and be sure you’ve added the detailed budget items manually (25 points).

Debt and Debt Strategy

- Refer back to your Credit Crush Assignment if you need a refresher.

- Describe your Debt Payment Strategy.

- Tell me how you plan to use what you learned about Credit Cards (and debt in general) after you graduate.

Asset Allocation

- Tell me what you learned about Asset Allocation in this course.

- How did you apply this new information in your financial plan?

- What Asset Allocation will you use in your 401k after you graduate?

- How much did Asset Allocation change your Probability of Success?

Tax Allocation

- In general, what did you learn this semester about Tax Allocation? — What is Tax Allocation?

- How will you use what you learned about Tax Allocation after you graduate?

- Will you fund a Roth IRA?

Holdings

- Discuss the actual holdings you selected for your portfolio.

- Explain the difference between a holding and an asset class.

- Explain the difference between a holding and Type of Account.

- Explain the difference between a holding and Type of Investment.

Retirement Analysis

- Which elements in a financial plan can “move the needle” the most in terms of Probability of Success?

Cash Flow Summary Screen

- In reviewing your Cash Flow Summary Screen, was there anything you saw that would raise a question when I review it?

- Spend a few minutes trying to figure out how to answer the question I’m going to ask about your Cash Flow Summary.

- If it all looks great, move on to the next screen.

Net Worth

- In reviewing your Net Worth Summary Screen, was there anything you saw that would raise a question when I review it?

- Spend a few minutes trying to figure out how to answer the question I’m going to ask about your Net WorthSummary.

- If it all looks great, move on to the next screen.

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The Perfect Investment

4 Investment Strategies

Watch on YouTube

These are the most common and most powerful investment strategies available to young and old investors alike, designed to help you maximize returns and minimize risk so that you build more wealth over time:

• Diversification
• Asset Allocation
• Dollar-Cost-Averaging
• Portfolio Rebalancing

Asset Classes

In order to implement the 4 Investment Strategies outlined in today’s lesson, it is very important that you understand the differences between asset classes. There are many many different asset classes, sometimes referred to as “styles”:

• US Large Cap
• US Mid Cap
• US Small Cap
• International
• US Government Bonds
• US Corporate Bonds
• Municipal Bonds
• International Bonds
• And the list goes on and on…

Three Big Factors

Three factors determine the performance of your portfolio: 

• Asset Allocation, 
• The Selection of Assets (Stock Picking), and
• Market Timing

In a ten-year study of ninety-one large corporate pension plans in the United States, the authors of an article in Financial Analysts Journal found that…

94% Of Performance Was Determined By Asset Allocation.

Many of us are tempted to wait for a windfall—winning the lottery or a big inheritance from Aunt Phoebe—before we even start to invest. Our hopes are high because we’ve heard stories of people who hit it big, but those stories are in the news because they’re so rare, not because they’re commonplace. 

The best way to develop a substantial nest egg is to develop the discipline of putting money into a fund every month—no excuses. The market will go up or down, but our funds continue to grow slowly and steadily. I know people who began putting as little as $25 a month into an investment, and over time, they’ve accumulated a substantial amount of money. 

When they were young, they had every reason to put off investing because they could easily use that $25 for dinner and a movie. But they were committed to save and invest, even if it was a small amount. When they got promotions and raises, they increased the amount they put away each month. 

To explain the benefit of regular investing, I use the illustration of a farmer who invests each month in his favorite commodity: Cows.

Portfolio Rebalancing 

Portfolio Rebalancing is Like Balancing a Tire, it’s the process of realigning the weightings of assets in your investment portfolio. Rebalancing involves periodically buying or selling securities to maintain an original or desired or risk level.

Capstone Assignment

Summer School Capstone Pre-Review

- Watch it on YouTube (https://youtu.be/9MraNWFLXE4)

3 Goals for Your Capstone Assignment

- Earn 200 of the 950 Points Needed for an “A”

- Define and Describe the Essential Elements of a Financial Plan

- Create a Capstone Report to Illustrate Your Financial Plan

The Capstone Report

The Essential Elements

- Watch The Capstone Assignment Video (https://youtu.be/_1_Lk7WIhqc) in Money Study Group

- Review the Course Material Posted in Money Study Group

- Create Your Final Report and Upload in BB

- For each of the Essential Elements listed below, include the following:

— Include Screen Shots

— Tell me What Changes You Made, if any, Before and After each element.

— Address the specific questions listed next to each element.

Balance Sheet

- Assets

- Liabilities

- Net Worth

Budget

- Be sure to include your detailed budget in the screenshot.

- If you did not link your credit/debit card, explain why and be sure you’ve added the detailed budget items manually (25 points).

Debt and Debt Strategy

- Refer back to your Credit Crush Assignment if you need a refresher.

- Describe your Debt Payment Strategy.

- Tell me how you plan to use what you learned about Credit Cards (and debt in general) after you graduate.

Asset Allocation

- Tell me what you learned about Asset Allocation in this course.

- How did you apply this new information in your financial plan?

- What Asset Allocation will you use in your 401k after you graduate?

- How much did Asset Allocation change your Probability of Success?

Tax Allocation

- In general, what did you learn this semester about Tax Allocation? — What is Tax Allocation?

- How will you use what you learned about Tax Allocation after you graduate?

- Will you fund a Roth IRA?

Holdings

- Discuss the actual holdings you selected for your portfolio.

- Explain the difference between a holding and an asset class.

- Explain the difference between a holding and Type of Account.

- Explain the difference between a holding and Type of Investment.

Retirement Analysis

- Which elements in a financial plan can “move the needle” the most in terms of Probability of Success?

Cash Flow Summary Screen

- In reviewing your Cash Flow Summary Screen, was there anything you saw that would raise a question when I review it?

- Spend a few minutes trying to figure out how to answer the question I’m going to ask about your Cash Flow Summary.

- If it all looks great, move on to the next screen.

Net Worth

- In reviewing your Net Worth Summary Screen, was there anything you saw that would raise a question when I review it?

- Spend a few minutes trying to figure out how to answer the question I’m going to ask about your Net WorthSummary.

- If it all looks great, move on to the next screen.

Invested Assets

- In reviewing your Invested Assets Summary Screen, was there anything you saw that would raise a question when I review it?

- Spend a few minutes trying to figure out how to answer the question I’m going to ask about your Invested Assets Summary.

- If it all looks great, move on to the next screen.

Accounts

- In reviewing your Accounts Summary Screen, was there anything you saw that would raise a question when I review it?

- Spend a few minutes trying to figure out how to answer the question I’m going to ask about your Accounts Summary.

- If it all looks great, move on to the next screen.

Insurance

In each of the insurance categories listed below, briefly explain…

- What insurance did you add to your plan and why?

- After you graduate, what insurance...

7 Tips for Bargaining and Negotiating with YourSelf

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Consumerism

What it is

How it works

Why Consumerism is the #1 Threat to...

• Your Future
• Your Family
• Your Financial Plan

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Summer School 2021 | UH Personal Finance

Money Study Group Online

Summer School Week 2

Welcome to Money Study Group Summer Session at the Bauer College of Business at University of Houston.

Introducing First Memories of Money - #Video

https://youtu.be/xaR_iW4Glag

Full Zoom Meeting #Video

https://youtu.be/-4EN3tvcOIc

In this Zoom Meeting, we discuss Week 1 Assignments and preview the next two Assignments.

• First Memories of Money
• Parental Interview
• Free Credit Report
• List of Creditors

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