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1
The greatest of evils and the worst of crimes
is poverty...our first duty-a duty to which
every other consideration should be
sacrificed...is not to be poor
-George Bernard Shaw
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2
everything is uncertain and that there
is nothing but uncertainty, is uncertain,
too
There is an age old saying that there
are only two certainties in life, one is
taxes, the other is death.
In life, as in investing, accepting
uncertainty and growing beyond it is
something we all need to do. If it
weren’t, no child would walk, no one
would learn to drive, and there will be
no businesses providing goods and
services essential to our survival, needs
and wants.
everything is uncertain and that there
is nothing but uncertainty, is uncertain,
too
There is an age old saying that there
are only two certainties in life, one is
taxes, the other is death.
In life, as in investing, accepting
uncertainty and growing beyond it is
something we all need to do. If it
weren’t, no child would walk, no one
would learn to drive, and there will be
no businesses providing goods and
services essential to our survival, needs
and wants.
Data 100 orang diusia 65 tahun
Kaya
Mandiri secara keuangan
Masih harus bekerja
Meninggal dunia
Hidup tergantung pada
orang lain
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BAGAIMANA GAYA HIDUP ANDA ?
DSSA
Biokos
Biokos,
Dermacos
Belia, Cempaka,
Mirabela
Marta Tilaar Group
Demographic market
segmentation
>1,5jt
1jt—1,5jt
500rb—1jt
< 500rb
< 500rb
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FINANCIAL PRESS—SO TERRIBLE…
PRODUKTIVITAS VS USIA
Usia 22th Usia 65th
Pen
ghas
ilan
Pe
ngh
asila
n
Mo
bil
Mo
bil
Ru
mah
R
um
ah
Dep
osi
to
Dep
osi
to
Risiko:
1. Disability
2. Die too soon
3. Critical illness
4. Live too long
Risiko:
1. Disability
2. Die too soon
3. Critical illness
4. Live too long
Usia Produktif Usia Produktif Usia Pensiun
Usia 55th
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Personal financial planning is important because it
helps individuals to achieve financial
independence.
There is a trend to increased self-reliance.
Many employers are requiring that employees plan and
manage their own retirement accounts. Traditional
pension plans are less common today.
There is greater economic uncertainty associated
with job stability and investments. Therefore,
financial planning is increasingly important.
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Helps you achieve goals and objectives
Reduces fear, anxiety, and frustration
Helps you honor God
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Many people study personal finance in order to
achieve financial success.
Financial success may not have the same
meaning to everyone.
› Some people think financial success is accumulating a
lot of money.
› Some people may define financial success by their
ability to purchase goods and services.
In this course, financial success is defined as
obtaining the maximum benefits from limited
financial resources.
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Nellie Mae reports that the
percentage of students with credit
cards rose from 67% in 1998 to 78%
in 2001.
The average college student carries a
credit card debt of $2,748 (Nellie
Mae)
According to the National
Foundation for Credit Counseling,
the number of Americans entering
debt management programs has risen
sharply over the last ten years.
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1. How to Balance a Checkbook
2. How to Read a Credit Report
3. The Difference Between a Credit
Card and a Debit Card
4. Ways to Save Money
5. How to Create a Monthly
Budget
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When you go grocery shopping do you? a) Create a list and stick to the items on that list?
b) Go down the aisles and grab what you like?
When eating out do you? a) Split an appetizer, order the most reasonable
entrée, drink water and skip dessert?
b) Order something from each menu item – drinks, appetizer, entrée, etc?
When going out on the weekend do you? a) Pick up the tab for your friends?
b) Split everything right down the middle?
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Nonfinancial goals › Family, children, education, religious, social, etc. › Finances can affect your ability to attain these
goals.
Financial goals › Financial independence is an important goal for
many people. Financial independence is defined as having enough income or resources to be self-reliant.
› One of the financial choices that we make is between consumption today versus consumption in the future.
› Researchers have found that most people, regardless of their income level, feel that they need 20% more wealth than they currently have.
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Economists suggest that satisfaction from current consumption increases but at a decreasing rate.
Stated simply, people enjoy their current purchases but as they purchase more and more, their satisfaction decreases. › For example, the enjoyment that an individual experiences
with the purchase of their first DVD is greater than the enjoyment that the individual experiences upon the purchase of their 100th DVD.
At a certain income level, this explains why individuals are willing to postpone current consumption and save money.
Saving money facilitates the attainment of financial and nonfinancial goals.
1-20
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The economic environment affects our ability to achieve our financial goals.
Continuing Inflation › Price levels over the long-run tend to increase 1–3%
annually. Inflation must be considered in financial goals.
Persistent Business Cycles › Instability in the economy creates uncertainty that must
be considered in financial goals (job stability, emergency reserves, etc.).
Continued Instability in Financial Markets
A High and Selectively Rewarding Tax System › The tax system rewards and punishes certain behaviors.
We will review these in greater detail in Chapter 4.
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Planning is the key to achieving all goals especially financial goals.
Life-cycle planning is the phrase that suggests that financial planning is a lifelong process. › People experience different phases in their life such
as career development and family formation, retirement, etc.
Major financial planning areas › The different phases of life impact the importance
of the various components of financial planning. At different phases, different financial planning areas increase or decrease in importance.
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Financial planning is the process of
meeting your life goals through the
proper management of your finances.
Life goals can include buying a home,
saving for your child’s education or
planning for retirement.
Consumption and Savings Planning
Debt Planning
Insurance Planning
Investment Planning
Retirement Planning
Estate Planning
Income Tax Planning
Career Planning
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Life-Cycle Phases Financial Planning Areas
Young adult (18–25) Consumption and savings;
career
Family formation (26–35) Consumption and savings;
career; debt; insurance;
income taxes
Family development (36–
49)
Investment; retirement;
income taxes
Family maturity (50–60) Investment; retirement; estate
Retirement (60–?) Estate; income taxes
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Decision making is a complex process because there are usually multiple choices with differing attributes.
There are two economic concepts that are helpful in financial decision making. 1 Marginal Analysis—involves the analysis of the changes in
important variables
Example: choosing between a public and private university; the public university costs $15,000 per year whereas the private university costs $40,000 per year. Does the private university provide benefits that compensate for the additional $25,000 ($40,000–$15,000)?
2 Opportunity Costs—the benefits given up when one alternative is chosen over another
Example: putting money in a savings account rather than investing in the stock market. The opportunity cost is the higher return that could potentially be earned in the stock market.
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First, build a supporting foundation. › Give time and attention to building a career,
buying adequate insurance, buying a house, and building cash reserves
Then invest in secure investments. › Long-term savings deposits, government
securities, and annuities
Gradually take greater risks. › High quality stocks and bonds, real estate
Avoid very risky investments until you are secure at the lower levels. › Growth stocks, gold, undeveloped land
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A financial planner is a professional who helps clients create, maintain, and execute a financial plan.
The best known credentials are the CFP.
Whether or not you need to hire a financial planner depends on the answers to the following questions: › How much time are you willing to spend managing your
finances?
› How complex is your financial situation?
› How much do you know about each of the aspects of financial planning?
Depending on your answers to the questions stated above, you may need to hire a financial planner to assist you with all or part of your financial management.
1-28
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The 2001 Jobs Rated Almanac's choice
of financial planner as the number one
career in America has awakened
people to the benefits of this rapidly
growing profession.
FINANCIAL PLANNING PROCESS
1. Establishing and
defining the client-
planner relationship
2. Gathering client
data, including goals.
3. Analyzing and
evaluating your
financial status
4. Developing and
presenting financial
planning
recommendations
and/or alternatives
5. Implementing the
financial planning
recommendations.
6. Monitoring the
financial planning
recommendations.
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In Indonesia: › Certified Financial Planner (CFP)
› Chartered Financial Consultant (ChFC)
› Registered Financial Planner - Indonesia (RFP - Indonesia), issued by FPAIndonesia
FPA Indonesia is a membership Association for professionals in financial services in Indonesia. FPA Indonesia is non-profit and independent.
The public is looking for a planner who has demonstrated a
commitment to competency, and financial professionals
want an established certification that sets them apart in a
globally expanding financial planning profession
As a CERTIFIED FINANCIAL PLANNER™ practitioner, you
can energize or revitalize your career, whether as an
entrepreneur or in a large firm, by leveraging the
knowledge and prestige associated with the world's most
recognized financial planning certification. You will be
equipped to provide truly personalized services to clients
and maintain high levels of financial planning
professionalism and expertise.
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Your Expertise and Credibility as a Financial Planner is Instantly Communicated.
Your Career and Professional Development Opportunities Are Enhanced
You Become a Coach and a Problem Solver
Your Clients Are More Satisfied
Your Earnings Reflect Your Personal Status
You Have Tested Yourself Against the Best, and Met the Challenge.