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Personal Financial Planning 14th Edition By Randy Billingsley; Lawrence J. Gitman; Michael D. Joehnk $17.99   Add to cart

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Personal Financial Planning 14th Edition By Randy Billingsley; Lawrence J. Gitman; Michael D. Joehnk

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Personal Financial Planning 14th Edition By Randy Billingsley; Lawrence J. Gitman; Michael D. Joehnk

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  • September 14, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
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Test Bank For Personal Financial Planning 14th Edition By
Randy Billingsley; Lawrence J. Gitman; Michael D. Joehnk

Main Goals of personal finance planning - ANSWER: - the process of managing your
money to achieve personal economic satisfaction
- Increase effectiveness in obtaining, using, and protecting financial resources
- Increase control of one's financial affairs
- Improve personal relationships
- Gain a sense of freedom from financial worries

What is a financial plan? - ANSWER: An action plan that identifies ways to achieve
financial goals

Time value of money - ANSWER: - Every financial decision involves giving up
something to obtain something else

Personal opportunity costs - ANSWER: Time
Health
Leisure

Steps in the planning process - ANSWER: o Determine current financial situation
o Develop your financial goals
o Identify alternative courses of action
o Evaluate alternatives

Consider: - ANSWER: • Life situation
• Personal values
• Economic factors

Asess: - ANSWER: - Risk
- Time value of money
- Opportunity cost

Create and implement your ________ - ANSWER: financial action plan

_______ and revise the financial plan - ANSWER: Review

Sources for financial planning - ANSWER: o Books
o Magazines
o Etc

Steps in career planning - ANSWER: o Asses and research personal goals, abilities and
career fields

, o Research the employment market and identify specific employment opportunities
o Develop a resume and cover letter; apply for available positions
o Interview for available positions; asses your interview performance
o Evaluate financial and other factors of positions you are offered
o Plan and implement a program for career development

Tax deferred employee benefits - ANSWER: o Taxed at some future time
o IRA (tax deductible now, taxable later)

Calculate net worth - ANSWER: Assets - liabilities = Net worth

Define insolvent - ANSWER: o Can't pay bills
o Net worth negative

Gross salary: what's taken? - ANSWER: o Net salary = gross take-home pay
o Social Security
o Medicare
o Income Tax

Why do we have taxes? - ANSWER: For the government to use for government
funded programs

What types of taxes are there? - ANSWER: o Property
o Income
o Estate
o Inheritance
o Sales
o Excise

Marginal tax rate - ANSWER: Highest bracket that is paid

Itemized deductions - ANSWER: o Charitable contributions
o Mortgage interest
o Property taxes
o Some medical expenses- Medical equipment

Emergency fund - ANSWER: 3 - 6 months

Calculate return on investment - ANSWER: Current return / face value

- Capital gain for difference

Greatest return on investments - ANSWER: o Highest grow rate: stocks
o COMMON STOCKS

Least liquid investment - ANSWER: o Real estate
o 2-3% return/growth per year

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