Personal Finance

Table of Contents and Preface
	Halftilte
	Introduction
	Titlepage
	Copyright
	Brief Contents
		1 Planning Your Personal Finances
		2 Managing Your Personal Finances
		3 Making Your Purchasing Decisions
		4 Insuring Your Resources
		5 Investing Your Financial Resources
		6 Controlling Your Financial Future
	Dedication
	About the authors
		Jack R. Kapoor, EdD
		Les R. Dlabay, EdD
		Robert J. Hughes, EdD
		Melissa M. Hart, CPA
	Preface
		What’s Next?
		Text and Digital Package
		Our Focus on Students and Professors
		Acknowledgments
		ASSURANCE OF LEARNING
		STOCKTRAK’S PERSONAL FINANCE PRODUCT: U.S. INVESTING SIMULATION AND PERSONAL BUDGETING GAME
	Personal Finance Offers You Everything You Have Always Expected . . . and More!
		FINANCIAL LITERACY IN MY LIFE
	Guided Tour
		Learning Objectives
		Financial Literacy in Your Life
		My Life
		How To . . .
		Financial Literacy for My Life
		Financial Literacy Calculations
		Key Terms
		My Life Boxes
		Smart Money Minute
		Personal FinTech
		Highlighted Examples
		Practice Quiz
		Personal Finance Roadmap and Dashboard
		Financial Planning Problems
		Digital Financial Literacy
		Financial Planning Case
		Your Personal Financial Plan
		Continuing Case
		Daily Spending Diary
		Personal Financial Planner Sheets
	Connect
		Instructors: Student Success Starts with You
		Students: Get Learning that Fits You
	Contents
		1 Planning Your Personal Finances
		2 Managing Your Personal Finances
		3 Making Your Purchasing Decisions
		4 Insuring Your Resources
		5 Investing Your Financial Resources
		6 Controlling Your Financial Future
Chapter 1: Personal Finance Basics and the Time Value of Money
	Introduction
	The Financial Planning Process
		STEP 1: DETERMINE YOUR CURRENT FINANCIAL SITUATION
		STEP 2: DEVELOP FINANCIAL GOALS
		STEP 3: IDENTIFY ALTERNATIVE COURSES OF ACTION
		STEP 4: EVALUATE YOUR ALTERNATIVES
		STEP 5: CREATE AND IMPLEMENT YOUR FINANCIAL ACTION PLAN
		STEP 6: REVIEW AND REVISE YOUR PLAN
	Influences on Personal Financial Planning
		LIFE SITUATION AND PERSONAL VALUES
		THE FINANCIAL SYSTEM AND ECONOMIC FACTORS
	Developing Personal Financial Goals
		TYPES OF FINANCIAL GOALS
		GOAL-SETTING GUIDELINES
	Opportunity Costs and the Time Value of Money
		PERSONAL OPPORTUNITY COSTS
		FINANCIAL OPPORTUNITY COSTS
	Achieving Financial Goals
		COMPONENTS OF PERSONAL FINANCIAL PLANNING
		DEVELOPING A FLEXIBLE FINANCIAL PLAN
		IMPLEMENTING YOUR FINANCIAL PLAN
		STUDYING PERSONAL FINANCE
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
		Daily Spending Diary (Instructions and Sheets)
Chapter 1 Appendix: The Time Value of Money
	Chapter 1 Appendix: The Time Value of Money
		Interest Rate Basics
		Future Value of a Single Amount
		Future Value of a Series of Equal Amounts (an Annuity)
		Present Value of a Single Amount
		Present Value of a Series of Equal Amounts (an Annuity)
		Using Present Value to Determine Loan Payments
		Answers to Sample Problems (based on TVM tables)
		Time Value of Money Application Exercises
		Time Value of Money Calculation Methods: A Summary
Chapter 2: Financial Aspects of Career Planning
	Introduction
	Career Choice Factors
		TRADE-OFFS OF CAREER DECISIONS
		CAREER TRAINING AND SKILL DEVELOPMENT
		PERSONAL FACTORS
		CAREER DECISION-MAKING
	Career Opportunities: Now and in the Future
		SOCIAL INFLUENCES
		ECONOMIC CONDITIONS
		INDUSTRY TRENDS
	Employment Search Strategies
		OBTAINING EMPLOYMENT EXPERIENCE
		USING CAREER INFORMATION SOURCES
		IDENTIFYING JOB OPPORTUNITIES
		APPLYING FOR EMPLOYMENT
	Financial and Legal Aspects of Employment
		ACCEPTING AN EMPLOYMENT POSITION
		EVALUATING EMPLOYEE BENEFITS
		YOUR EMPLOYMENT RIGHTS
	Long-Term Career Development
		TRAINING OPPORTUNITIES
		CAREER PATHS AND ADVANCEMENT
		CHANGING CAREERS
	Summary of Learning Objectives
	Key Terms
	Key Formulas
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 2 Appendix: Résumés, Cover Letters, and Interviews
	Chapter 2 Appendix: Résumés, Cover Letters, and Interviews
		Developing a Résumé
		Creating a Cover Letter
		The Job Interview
		PREPARING FOR THE INTERVIEW
		THE INTERVIEW PROCESS
Chapter 3: Money Management Strategy: Financial Statements and Budgeting
	Introduction
	Successful Money Management
		OPPORTUNITY COST AND MONEY MANAGEMENT
		COMPONENTS OF MONEY MANAGEMENT
		A PERSONAL FINANCIAL RECORDS SYSTEM
	Personal Financial Statements
		THE PERSONAL BALANCE SHEET: WHERE ARE YOU NOW?
		EVALUATING YOUR FINANCIAL POSITION
		THE CASH FLOW STATEMENT: WHERE DID YOUR MONEY GO?
	Budgeting for Skilled Money Management
		THE BUDGETING PROCESS
		CHARACTERISTICS OF SUCCESSFUL BUDGETING
		TYPES OF BUDGETING SYSTEMS
	Money Management and Achieving Financial Goals
		IDENTIFYING SAVING GOALS
		SELECTING A SAVING TECHNIQUE
		CALCULATING SAVINGS AMOUNTS
	Summary of Learning Objectives
	Key Terms
	Key Formulas
	Self-Test Problems
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 3 Appendix: Financial Planners and Other Information Sources
	Introduction
	Online Resources
	Financial Institutions
	Courses and Seminars
	Personal Finance Software and Apps
	Financial Planning Specialists
		WHO ARE THE FINANCIAL PLANNERS?
		DO YOU NEED A FINANCIAL PLANNER?
		HOW SHOULD YOU SELECT A FINANCIAL PLANNER?
		HOW ARE FINANCIAL PLANNERS CERTIFIED?
Chapter 4: Planning Your Tax Strategy
	Introduction
	Taxes and Financial Planning
		TAXES ON PURCHASES
		TAXES ON PROPERTY
		TAXES ON WEALTH
		TAXES ON EARNINGS
	Income Tax Fundamentals
		STEP 1: DETERMINING ADJUSTED GROSS INCOME
		STEP 2: COMPUTING TAXABLE INCOME
		STEP 3: CALCULATING TAXES OWED
		MAKING TAX PAYMENTS
		DEADLINES AND PENALTIES
	Filing Your Federal Income Tax Return
		WHO MUST FILE?
		WHICH TAX FORMS AND SCHEDULES SHOULD YOU USE?
		COMPLETING THE FEDERAL INCOME TAX RETURN
		CORRECTING THE FEDERAL RETURN
		FILING STATE INCOME TAX RETURNS
	Tax Assistance and the Audit Process
		TAX INFORMATION SOURCES
		TAX PREPARATION SOFTWARE
		TAX PREPARATION SERVICES
		WHAT IF YOUR RETURN IS AUDITED?
	Tax Planning Strategies
		CONSUMER PURCHASING
		INVESTMENT DECISIONS
		RETIREMENT AND EDUCATION PLANS
		TAX-SAVINGS STRATEGIES: A SUMMARY
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 5: Financial Services: Savings Plans and Payment Methods
	Introduction
	Financial Services for Financial Planning
		MANAGING DAILY MONEY NEEDS
		TYPES OF FINANCIAL SERVICES
		ONLINE AND MOBILE BANKING
		BANKING APPS AND DIGITAL WALLETS
		PREPAID DEBIT CARDS
		FINANCIAL SERVICES AND ECONOMIC CONDITIONS
	Financial Service Providers
		DEPOSIT INSTITUTIONS
		OTHER FINANCIAL INSTITUTIONS
		COMPARING FINANCIAL-SERVICE PROVIDERS
	Savings Plans
		SAVINGS ACCOUNTS
		CERTIFICATES OF DEPOSIT
		MONEY MARKET ACCOUNTS AND FUNDS
		SAVINGS BONDS
	Evaluating Savings Plans
		RATE OF RETURN
		INFLATION
		TAX CONSIDERATIONS
		LIQUIDITY
		SAFETY
		RESTRICTIONS AND FEES
	Payment Methods
		Digital PAYMENTS
		TYPES OF CHECKING ACCOUNTS
		EVALUATING CHECKING ACCOUNTS
		MANAGING YOUR CHECKING ACCOUNT
		OTHER PAYMENT METHODS
	Summary of Learning Objectives
	Key Terms
	Key Formulas
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 6: Introduction to Consumer Credit
	Introduction
	What Is Consumer Credit?
		THE IMPORTANCE OF CONSUMER CREDIT IN OUR ECONOMY
		USES AND MISUSES OF CREDIT
		ADVANTAGES OF CREDIT
		DISADVANTAGES OF CREDIT
		SUMMARY: ADVANTAGES AND DISADVANTAGES OF CREDIT
	Types of Credit
		CLOSED-END (or installment) CREDIT
		OPEN-END (or Revolving) CREDIT
	Measuring Your Credit Capacity
		CAN YOU AFFORD A LOAN?
		GENERAL RULES OF CREDIT CAPACITY
		COSIGNING A LOAN
		BUILDING AND MAINTAINING YOUR CREDIT RATING
	Applying for Credit
		A SCENARIO FROM THE PAST
		WHAT CREDITORS LOOK FOR: THE FIVE Cs OF CREDIT MANAGEMENT
		WHAT IF YOUR APPLICATION IS DENIED?
	Avoiding and Correcting Credit Mistakes
		IN CASE OF A BILLING ERROR
		YOUR CREDIT RATING DURING THE DISPUTE
		DEFECTIVE GOODS OR SERVICES
		IDENTITY CRISIS: WHAT TO DO IF YOUR IDENTITY IS STOLEN
	Complaining about Consumer Credit
		COMPLAINTS ABOUT BANKS
		PROTECTION UNDER CONSUMER CREDIT LAWS
		YOUR RIGHTS UNDER CONSUMER CREDIT LAWS
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 7: Choosing a Source of Credit: The Costs of Credit Alternatives
	Introduction
	Sources of Consumer Credit
		WHAT KIND OF LOAN SHOULD YOU SEEK?
	The Cost of Credit
		FINANCE CHARGE AND ANNUAL PERCENTAGE RATE
		TACKLING THE TRADE-OFFS
		CALCULATING THE COST OF CREDIT
		WHEN THE REPAYMENT IS EARLY: THE RULE OF78s
		CREDIT INSURANCE
		COST OF CREDIT AND THE CREDIT CARD ACCOUNTABILITY, RESPONSIBILITY, AND DISCLOSURE ACT OF 2009 (THE CREDIT CARD ACT)
	Managing Your Debts
		DEBT COLLECTION PRACTICES
		WARNING SIGNS OF DEBT PROBLEMS
		THE SERIOUS CONSEQUENCES OF DEBT
	Consumer Credit Counseling Services
		WHAT THE CCCS DOES
		ALTERNATIVE COUNSELING SERVICES
	Declaring Personal Bankruptcy
		THE BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005
		EFFECT OF BANKRUPTCY ON YOUR JOB AND YOUR FUTURE CREDIT
		SHOULD A LAWYER REPRESENT YOU IN A BANKRUPTCY CASE?
	Summary of Learning Objectives
	Key Terms
	Key Formulas
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 7 Appendix: Education Financing, Loans, and Scholarships
	Introduction
	Return on Investment
		Increasing Costs of Education
	FAFSA (Free Application for Federal Student Aid)
		SCHOLARSHIPS
		GRANTS
		LOANS
		REPAYING YOUR LOANS
		WORK-STUDY PROGRAMS
	Your Future and Financial Aid
Chapter 8: Consumer Purchasing Strategies and Legal Protection
	Introduction
	Consumer Buying Activities
		FINANCIAL IMPLICATIONS OF CONSUMER DECISIONS
		WISE PURCHASING STRATEGIES
		WARRANTIES
	Major Consumer Purchases: Buying Motor Vehicles
		PHASE 1—PRESHOPPING ACTIVITIES
		PHASE 2—EVALUATING ALTERNATIVES
		PHASE 3—DETERMINING PURCHASE PRICE
		PHASE 4—POSTPURCHASE ACTIVITIES
	Resolving Consumer Complaints
		STEP 1: INITIAL COMMUNICATION
		STEP 2: COMMUNICATION WITH THE COMPANY
		STEP 3: CONSUMER AGENCY ASSISTANCE
		STEP 4: LEGAL ACTION
	Legal Options for Consumers
		SMALL CLAIMS COURT
		CLASS-ACTION SUITS
		USING A LAWYER
		OTHER LEGAL ALTERNATIVES
		PERSONAL CONSUMER PROTECTION
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 8 Appendix: Consumer Agencies and Organizations
	Chapter 8 Appendix: Consumer Protection Agencies and Organizations
	Section 1
	Section 2
Chapter 9: The Housing Decision: Factors and Finances
	Introduction
	Housing Alternatives
		YOUR CHOICE OF HOUSING
		OPPORTUNITY COSTS OF HOUSING CHOICES
		Renting versus Buying Housing
		Housing Information Sources
	Renting Your Residence
		SELECTING A RENTAL UNIT
		ADVANTAGES OF RENTING
		DISADVANTAGES OF RENTING
		COSTS OF RENTING
	The Home-Buying Process
		STEP 1: DETERMINE HOME OWNERSHIP NEEDS
		STEP 2: FIND AND EVALUATE A PROPERTY TO PURCHASE
		STEP 3: PRICE THE PROPERTY
	The Finances of Home Buying
		STEP 4: OBTAIN FINANCING
		STEP 5: CLOSE THE PURCHASE TRANSACTION
		HOME BUYING: A SUMMARY
	Selling Your Home
		PREPARING YOUR HOME FOR SELLING
		DETERMINING THE SELLING PRICE
		SALE BY OWNER
		LISTING WITH A REAL ESTATE AGENT
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 10: Property and Motor Vehicle Insurance
	Introduction
	Insurance and Risk Management: An Introduction
		WHAT IS INSURANCE?
		TYPES OF RISKS
		RISK MANAGEMENT METHODS
		PLANNING AN INSURANCE PROGRAM
	Property and Liability Insurance
		POTENTIAL PROPERTY LOSSES
		LIABILITY PROTECTION
	Home and Property Insurance
		HOMEOWNER’S INSURANCE COVERAGES
		RENTER’S INSURANCE
		HOME INSURANCE POLICY FORMS
	Home Insurance Cost Factors
		HOW MUCH COVERAGE DO YOU NEED?
		FACTORS THAT AFFECT HOME INSURANCE COSTS
		REDUCING HOME INSURANCE COSTS
	Automobile Insurance Coverages
		MOTOR VEHICLE BODILY INJURY COVERAGES
		MOTOR VEHICLE PROPERTY DAMAGE COVERAGES
		OTHER AUTOMOBILE INSURANCE COVERAGES
	Automobile Insurance Costs
		AMOUNT OF COVERAGE
		AUTOMOBILE INSURANCE PREMIUM FACTORS
		REDUCING AUTOMOBILE INSURANCE PREMIUMS
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 11: Health, Disability, and Long-Term Care Insurance
	Introduction
	Health Care Costs
		HIGH MEDICAL COSTS
		WHY DOES HEALTH CARE COST SO MUCH?
		WHAT IS BEING DONE ABOUT THE HIGH COSTS OF HEALTH CARE?
		WHAT CAN YOU DO TO REDUCE PERSONAL HEALTH CARE COSTS?
	Health Insurance and Financial Planning
		WHAT IS HEALTH INSURANCE?
		MEDICAL COVERAGE AND DIVORCE
	Types of Health Insurance Coverage
		TYPES OF MEDICAL COVERAGE
		LONG-TERM CARE INSURANCE
		MAJOR PROVISIONS IN A HEALTH INSURANCE POLICY
		HEALTH INSURANCE TRADE-OFFS
		WHICH COVERAGE SHOULD YOU CHOOSE?
	Private Sources of Health Insurance and Health Care
		PRIVATE INSURANCE COMPANIES
		HOSPITAL AND MEDICAL SERVICE PLANS
		HEALTH MAINTENANCE ORGANIZATIONS
		PREFERRED PROVIDER ORGANIZATIONS
		HOME HEALTH CARE AGENCIES
		EMPLOYER SELF-FUNDED HEALTH PLANS
		NEW HEALTH CARE ACCOUNTS
	Government Health Care Programs
		MEDICARE
		MEDICAID
		HEALTH INSURANCE AND THE PATIENT PROTECTION AND AFFORDABLE CARE ACT OF 2010
		The Affordable Care Act and the Individual Shared Responsibility Provision
		FIGHT AGAINST MEDICARE/MEDICAID FRAUD AND ABUSE
		GOVERNMENT AND PRIVATE CONSUMER HEALTH INFORMATION WEBSITES
	Disability Income Insurance
		DEFINITION OF DISABILITY
		DISABILITY INSURANCE TRADE-OFFS
		SOURCES OF DISABILITY INCOME
		DETERMINING YOUR DISABILITY INCOME INSURANCE REQUIREMENTS
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 12: Life Insurance
	Introduction
	Life Insurance: An Introduction
		WHAT IS LIFE INSURANCE?
		THE PURPOSE OF LIFE INSURANCE
		THE PRINCIPLE OF LIFE INSURANCE
		HOW LONG WILL YOU LIVE?
	Determining Your Life Insurance Needs
		Evaluating your NEED for LIFE INSURANCE
		DETERMINING YOUR LIFE INSURANCE OBJECTIVES
		ESTIMATING YOUR LIFE INSURANCE REQUIREMENTS
		ONLINE CALCULATORS AND APPS
	Types of Life Insurance Companies and Policies
		TYPES OF LIFE INSURANCE COMPANIES
		TYPES OF LIFE INSURANCE POLICIES
		TERM LIFE INSURANCE
		WHOLE LIFE INSURANCE
		OTHER TYPES OF LIFE INSURANCE POLICIES
	Important Provisions in a Life Insurance Contract
		PAYMENTS TO LIFE INSURANCE POLICIES
		CLAUSES IN LIFE INSURANCE POLICIES
		PAYMENTS FROM LIFE INSURANCE POLICIES
		RIDERS TO LIFE INSURANCE POLICIES
	Buying Life Insurance
		FROM WHOM TO BUY?
		COMPARING POLICY COSTS
		OBTAINING A POLICY
		EXAMINING A POLICY
	Life Insurance Proceeds
		DEATH (OR SURVIVOR) BENEFITS
		INCOME FROM LIFE INSURANCE POLICIES
		SWITCHING POLICIES
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Personal Financial Planner In Action
	Continuing Case
	Daily Spending Diary
Chapter 13: Investing Fundamentals
	Introduction
	Preparing for an Investment Program
		ESTABLISHING INVESTMENT GOALS
		PERFORMING A FINANCIAL CHECKUP
		ECONOMIC FACTORS THAT CAN AFFECT YOUR PERSONAL FINANCES
		GETTING THE MONEY NEEDED TO START AN INVESTMENT PROGRAM
		HOW THE TIME VALUE OF MONEY AFFECTS YOUR INVESTMENTS
	Factors Affecting the Choice of Investments
		SAFETY AND RISK
		THE RISK–RETURN TRADE-OFF
		COMPONENTS OF THE RISK FACTOR
		INVESTMENT INCOME
		INVESTMENT GROWTH
		INVESTMENT LIQUIDITY
	Asset Allocation and Investment Alternatives
		ASSET ALLOCATION AND DIVERSIFICATION
		AN OVERVIEW OF INVESTMENT ALTERNATIVES
		A PERSONAL PLAN FOR INVESTING
	Factors That Reduce Investment Risk
		YOUR ROLE IN THE INVESTMENT PROCESS
		OTHER FACTORS THAT IMPROVE INVESTMENT DECISIONS
	Sources of Investment Information
		THE INTERNET
		NEWSPAPERS AND NEWS PROGRAMS
		BUSINESS PERIODICALS AND GOVERNMENT PUBLICATIONS
		CORPORATE REPORTS
		INVESTOR SERVICES AND NEWSLETTERS
	Summary of Learning Objectives
	Key Terms
	Key Formulas
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 14: Investing in Stocks
	Introduction
	Common and Preferred Stocks
		WHY CORPORATIONS ISSUE COMMON STOCK
		WHY INVESTORS PURCHASE COMMON STOCK
		PREFERRED STOCK
	Evaluating a Stock Issue
		CLASSIFICATION OF STOCK INVESTMENTS
		THE INTERNET
		STOCK ADVISORY SERVICES
		NEWSPAPER COVERAGE AND CORPORATE NEWS
	Numerical Measures That Influence Investment Decisions
		WHY CORPORATE EARNINGS ARE IMPORTANT
		PROJECTED EARNINGS
		DIVIDEND AND TOTAL RETURN CALCULATIONS
		OTHER FACTORS THAT INFLUENCE THE PRICE OF A STOCK
		INVESTMENT THEORIES
	Buying and Selling Stocks
		SECONDARY MARKETS FOR STOCKS
		BROKERAGE FIRMS AND ACCOUNT EXECUTIVES
		SHOULD YOU USE A FULL-SERVICE, DISCOUNT, OR ONLINE BROKERAGE FIRM?
		COMMISSION CHARGES
		COMPLETING STOCK TRANSACTIONS
	Long-Term and Short-Term Investment Strategies
		LONG-TERM TECHNIQUES
		SHORT-TERM TECHNIQUES
	Summary of Learning Objectives
	Key Terms
	Key Formulas
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 15: Investing in Bonds
	Introduction
	Characteristics of Corporate Bonds
	Why Corporations Sell Corporate Bonds
		TYPES OF BONDS
		PROVISIONS FOR REPAYMENT
	Why Investors Purchase Corporate Bonds
		THE PSYCHOLOGY OF INVESTING IN BONDS
		INTEREST INCOME
		DOLLAR APPRECIATION OF BOND VALUE
		BOND REPAYMENT AT MATURITY
		A TYPICAL BOND TRANSACTION
		THE MECHANICS OF A BOND TRANSACTION
	Government Bonds and Debt Securities
		U.S. TREASURY BILLS, NOTES, AND BONDS
		FEDERAL AGENCY DEBT ISSUES
		STATE AND LOCAL GOVERNMENT SECURITIES
	The Decision to Buy or Sell Bonds
		THE INTERNET
		FINANCIAL COVERAGE FOR BOND TRANSACTIONS
		ANNUAL REPORTS
		BOND RATINGS
		BOND YIELD CALCULATIONS
		OTHER SOURCES OF INFORMATION
	Summary of Learning Objectives
	Key Terms
	Key Formulas
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 16: Investing in Mutual Funds
	Introduction
	Why Investors Purchase Mutual Funds
		THE PSYCHOLOGY OF INVESTING IN FUNDS
		CHARACTERISTICS OF MUTUAL FUNDS
	Classifications of Mutual Funds
		STOCK FUNDS
		BOND FUNDS
		OTHER FUNDS
		The Benefits of Portfolio Construction
	How to Decide to Buy or Sell Mutual Funds
		MANAGED FUNDS VERSUS INDEXED FUNDS
		THE INTERNET
		PROFESSIONAL ADVISORY SERVICES
		MUTUAL FUND PROSPECTUS AND ANNUAL REPORT
		NEWSPAPERS AND FINANCIAL PUBLICATIONS
	The Mechanics of a Mutual Fund Transaction
		RETURN ON INVESTMENT
		TAXES AND MUTUAL FUNDS
		PURCHASE OPTIONS
		WITHDRAWAL OPTIONS
	Summary of Learning Objectives
	Key Terms
	Key Formulas
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 17: Investing in Real Estate and Other Investment Alternatives
	Introduction
	Investing in Real Estate
		DIRECT REAL ESTATE INVESTMENTS
		INDIRECT REAL ESTATE INVESTMENTS
	Advantages of Real Estate Investments
		A POSSIBLE HEDGE AGAINST INFLATION
		EASY ENTRY
		LIMITED FINANCIAL LIABILITY
		NO MANAGEMENT CONCERNS
		FINANCIAL LEVERAGE
	Disadvantages of Real Estate Investments
		ILLIQUIDITY
		DECLINING PROPERTY VALUES
		LACK OF DIVERSIFICATION
		LACK OF A TAX SHELTER
		LONG DEPRECIATION PERIOD
		MANAGEMENT PROBLEMS
	Investing in Precious Metals, Gems, and Collectibles
		GOLD
		SILVER, PLATINUM, PALLADIUM, AND RHODIUM
		PRECIOUS STONES
		COLLECTIBLES
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 18: Starting Early: Retirement Planning
	Introduction
	Why Retirement Planning?
		TACKLING THE TRADE-OFFS
		THE IMPORTANCE OF STARTING EARLY
		THE POWER OF COMPOUNDING
		THE BASICS OF RETIREMENT PLANNING
	Conducting a Financial Analysis
		REVIEW YOUR ASSETS
		YOUR ASSETS AFTER DIVORCE
	Retirement Living Expenses
		ADJUST YOUR EXPENSES FOR INFLATION
	Planning Your Retirement Housing
		TYPE OF HOUSING
		AVOIDING RETIREMENT HOUSING TRAPS
	Planning Your Retirement Income
		SOCIAL SECURITY
		Other public pension plans
		EMPLOYER PENSION PLANS
		Personal Retirement Plans
		ANNUITIES
		WILL YOU HAVE ENOUGH MONEY DURING RETIREMENT?
	Living on Your Retirement Income
		TAX ADVANTAGES
		WORKING DURING RETIREMENT
		INVESTING FOR RETIREMENT
		DIPPING INTO YOUR NEST EGG
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Chapter 19: Estate Planning
	Introduction
	Why Estate Planning?
		WHAT IS ESTATE PLANNING?
		IF YOU ARE MARRIED
		IF YOU NEVER MARRIED
		NEW LIFESTYLES
		THE OPPORTUNITY COST OF RATIONALIZING
	Legal Aspects of Estate Planning
		WILLS
	Types and Formats of Wills
		TYPES OF WILLS
		FORMATS OF WILLS
		WRITING YOUR WILL
		ALTERING OR REWRITING YOUR WILL
		LIVING WILL AND ADVANCE DIRECTIVES
		ETHICAL WILL
		SOCIAL MEDIA WILL
		POWER OF ATTORNEY
		LETTER OF LAST INSTRUCTION
	Types of Trusts and Estates
		BENEFITS OF ESTABLISHING TRUSTS
		TYPES OF TRUSTS
		ESTATES
		SETTLING YOUR ESTATE
	Federal and State Estate Taxes
		TYPES OF TAXES
		TAX AVOIDANCE AND TAX EVASION
		CALCULATING THE TAX
		PAYING THE TAX
	Summary of Learning Objectives
	Key Terms
	Self-Test Problems
		Self-Test Solutions
	Financial Planning Problems
	Digital Financial Literacy
	Financial Planning Case
	Your Personal Financial Plan
	Continuing Case
	Daily Spending Diary
Personal Financial Planner
	Personal Financial Planner
		Preface
		Table of Contents
		1 Personal Data
		2 Financial Institutions and Advisors
		3 Personal Financial Goals
		4 Current Economic Conditions
		5 Time Value of Money
		6 Career Research Sheet
		7 Career Contacts
		8 Résumé Planning
		9 Cover Letter Planning
		10 Prospective Employer Research
		11 Interview Preparation
		12 Employee Benefits Comparison
		13 Career Development and Advancement
		14 Financial Documents and Records
		15 Personal Balance Sheet
		16 Personal Cash Flow Statement
		17 Cash Budget
		18 Annual Budget Summary
		19 College Education Savings Plan
		20 Income Tax Estimate
		21 Tax Preparer Comparison
		22 Tax Planning Activities
		23 Financial Services Planning
		24 Saving to Achieve Financial Goals
		25 Savings Plan Comparison
		26 Payment Account Comparison
		27 Payment Account Cost Analysis
		28 Checking Account Reconciliation
		29 Consumer Credit Usage
		30 Credit Card Comparison
		31 Consumer Loan Comparison
		32 Unit Pricing Worksheet
		33 Consumer Purchase Comparison
		34 Transportation Needs
		35 Used-Car Comparison
		36 Buying or Leasing a Motor Vehicle
		37 Comparing Cash and Credit Purchases
		38 Auto Operation Costs
		39 Legal Services Comparison
		40 Housing Needs
		41 Renting or Buying Housing
		42 Apartment Rental Comparison
		43 Housing Mortgage Affordability
		44 Mortgage Comparison
		45 Mortgage Refinance Analysis
		46 Insurance Policies and Needs
		47 Home Inventory
		48 Property Insurance
		49 Apartment/Home Insurance Comparison
		50 Automobile Insurance Comparison
		51 Health Care Insurance
		52 Disability Income Insurance
		53 Life Insurance
		54 Life Insurance Comparison
		55 Investment Goals
		56 Investment Risk
		57 Investment Information Sources
		58 Corporate Stock Evaluation
		59Brokerage and Account Executive Comparison
		60 Corporate Bond Evaluation
		61 Mutual Fund Investment Information
		62 Mutual Fund Evaluation
		63 Retirement Planning
		64 Retirement Plan Comparison
		65 Retirement Income Forecast
		66 Estate Planning
		67 Will Planning
		68 Trust Comparison
		69 Estate Tax Estimate
		70 Financial Data Summary
		71 Savings/Investment Portfolio Summary
		72 Progress Check—Major Financial Goals and Activities
		73 Money Management, Budgeting, and Tax Planning—Summary
		74 Banking Services and Consumer Credit—Summary
		75 Consumer Buying and Housing—Summary
		76 Insurance—Summary
		77 Investments—Summary
		78 Retirement and Estate Planning—Summary
Endnotes
	Endnotes
Index
	Index
		A
		B
		C
		D
		E
		F
		G
		H
		I
		J
		K
		L
		M
		N
		O
		P
		Q
		R
		S
		T
		U
		V
		W
		X
		Y
		Z
Additional Student Resources
	Additional Student Resources
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