Lecture 12

Personal Financial Plan

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

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Learning Objectives

• Understand the objectives of PFP & WM

• Identify the different planning areas of PFP

• Understand the 6-step financial planning process.

Copyright © 2009 by McGraw-Hill

Education (Asia)

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Objectives of PFP

Objectives:

PERSONAL FINANCIAL PLANNING (PFP)

TO PROVIDE PROFESSIONAL & VALUE ADDED SERVICES TO FULFILL NEEDS OF CLIENTS

ITS 3 MAJOR FUNCTIONS:

• improvement of living standards

• risk management

• transfer of assets to next generation.

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Objectives of WM

Objectives: WEALTH MANAGEMENT

IT IS CLOSELY RELATED TO THE CONCEPT OF PFP

GREATER FOCUS ON INVESTMENT MANAGEMENT

ITS MAIN FUNCTIONS: • Wealth Creation

• Wealth Accumulation

• Wealth Preservation

• Wealth Distribution.

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Personal Financial Planning (PFP)

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• PFP is a comprehensive process – It evaluates all aspects of a client’s

financial needs

– Such needs are:

• Consumption

• income & wealth

• insurance,

• investment

• retirement

• tax & estate planning

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Goal-oriented

Planning Pyramid

Cash flow management/tax planning

Risk management/insurance

planning

Short//medium-term

investment planning

Retirement

planning

退休与遗产

人寿及财产 Life & asset

protection

Retirement funds

Education & home

purchase

Consumption, tax,

& short-term

liability

Estate

planning Trust & will

Personal Financial Planning

Copyright © 2009 by McGraw-Hill Education (Asia)

Areas of

Personal Financial Planning

1. Consumption Planning

(Cash flow management)

– cash flow management &

consumption behavior

2. Taxation Planning

– tax liability & obligations

Copyright © 2009 by McGraw-Hill

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3. Insurance Planning

(risk management)

– insurance needs

– Life + other insurance

4. Investment Planning

– short, medium, long-term

investment goals

Copyright © 2009 by McGraw-Hill

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Areas of

Personal Financial Planning

5. Retirement Planning

– retirement needs

6. Estate Planning

– inheritance, estate management &

philanthropic needs

(慈善的)

Copyright © 2009 by McGraw-Hill

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Areas of

Personal Financial Planning

Six-step Procedure for Financial Planning

Continued… 1-10

Chapter 02

Financial Aspects of Career

Planning

McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

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Chapter 2 Learning Objectives

1. Describe activities associated with career planning and advancement

2. Evaluate factors that influence employment opportunities

3. Implement employment search strategies

4. Assess financial and legal concerns related to obtaining employment

5. Analyze techniques available for career growth and advancement

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Career Choice Factors

Objective 1: Describe the activities associated

with career planning and advancement

• Career selection requires planning

• The average person changes jobs more than seven

times over a lifetime

• Job is an employment position obtained mainly to

earn money

• Career is a commitment to a profession that

requires continued training

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Career Choice Factors (continued)

TRADE-OFFS OF CAREER DECISIONS

• Career choices alternatives have risks and

opportunity costs

• Career choices require periodic evaluation of trade-

offs related to personal, social, and economic factors

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Career Choice Factors (continued)

CAREER TRAINING AND SKILL DEVELOPMENT

• Level of formal training affects financial success

• Training may be viewed in two main categories:

1. Technical Skills refers to specialized career training for a specific profession.

2. General Skills are traits adaptable to most work situations. Some can be acquired at school, while others require experience.

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Career Choice Factors (continued)

PERSONAL FACTORS

• Aptitudes

• Interests inventories

• Your personality

• Do you perform best in low-pressure or high-pressure working environments?

• Personal SWOT analysis

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Stages of Career Planning and Advancement

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Career Opportunities: Now and in the Future

Objective 2: Evaluate factors that

influence employment opportunities

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Career Opportunities: Now and in the Future (continued)

SOCIAL INFLUENCES

• Demographic trends

• Geographic trends

– Where jobs are; salaries, and living costs

Working Parents More food service and child care

Leisure time More interest in health and

recreation

Longer life spans Demand for travel, health care,

and retirement facilities

Employment training Demand for teachers, trainers,

and related careers

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Career Opportunities: Now and in the Future (continued)

Economic Conditions

• Career Opportunities are affected by:

– High interest rates

– Price increases

– Decreased demand for goods and services

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Service Industries Expected to Have the Greatest Employment Potential

• Information technology

• Health care

• Business services

• Social services

• Sales and Retailing

• Hospitality and food services

• Management and human resources

• Education

• Financial services

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Employment Search Strategies

Objective 3: Implement employment search strategies

OBTAINING EMPLOYMENT EXPERIENCE

Part-time employment develop contacts

Volunteer work develop organizational skills

Internships experience helps obtain

employment

Campus projects obtain career skills

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Employment Search Strategies (con’t)

IDENTIFYING JOB OPPORTUNITIES

• Job advertisements

• Career fairs

• Employment agencies

• Job creation

• Visit organizations

• Telephone and business directories

• Web search

• Talk with alumni in your field

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Employment Search Strategies (con’t)

APPLYING FOR EMPLOYMENT

• Resume

• Cover letter

• Interview

– See Chapter 2 Appendix for

detailed help in these areas

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Financial and Legal Aspects of Employment

Objective 4: Assess the financial and legal concerns related to obtaining employment

***Research the job and the company before accepting an employment position

• THE WORK ENVIRONMENT

– Corporate culture

– Company policies and procedures

• FACTORS AFFECTING SALARY

– Education, training, company size, and salaries for comparable positions

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Financial and Legal Aspects of Employment (continued)

• EVALUATING EMPLOYEE BENEFITS

– Nonsalary benefits include: child care, leaves of

absence, and elder care

– Cafeteria-style benefits allow workers benefit

credits that they can choose to meet their needs

– Flexible spending and medical savings accounts

– Compare job offer benefits based on market value

or future value

– Know your employment rights

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Financial and Legal Aspects of Employment

(continued)

Objective 5: Analyze the techniques for career growth and advancement

• A career can be for a lifetime

• Skills and attitudes that can lead to a fulfilling work life:

– Communicate well with others

– Flexible and open to new ideas

– Develop efficient work habits

– Use lists, goal setting, and time management techniques

– Anticipate problems and areas for actions

– Creativity and a willingness to assist others

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Stages of career development

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Long-Term Career Development

(cont’d)

TRAINING OPPORTUNITIES

• Continue to learn about new technology and the global economy

• Formal methods for expanding knowledge: – company programs, seminars, and college courses

• Informal methods: – reading and discussions with colleagues

– meetings with employees from other companies

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Long-Term Career Development

(cont’d)

CAREER PATHS AND ADVANCEMENT

• Career choices must be evaluated in light of changing values, goals, and economic conditions

• A mentor is an experienced employee who serves as a teacher and counselor for a less experienced person

– Mentors are attracted to those who show initiative

– Mentors should be receptive to assisting others, and help in both technical and social areas of their careers

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Developing a Resume

• Personal data section

• Career objective section

• Education section

• Experience section

• Related information section

• References section

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Three Types of Resumes

• Chronological

- Most common; focuses on experience and

education in reverse-time sequence

• Functional

- Focuses on your skills

• Targeted

- Prepared for a specific job

• E-resumes for applying for a job online

- Use a simple format and no attachments

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Resume 1

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Resume 2

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Resume Preparation

• Presented in a professional manner

• Limit your resume to one page

• Use the STAR principle to highlight experiences and achievements:

• Situation, or the setting

• Task, your duties

• Actions you took

• Result, the outcome

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Covering Letter

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Creating a Cover Letter

• Introductory paragraph

– Get reader’s attention

– Overview your qualifications

• Development paragraph

– Specific qualifications

– Refer to details on resume

– Experiences and training

• Concluding paragraph

– Ask for interview

– Include how to contact you

– Summarize how you can help the company

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The Job Interview

• Prepare for the interview by getting information

about your prospective employer

Library resources such as annual reports or recent

articles

Internet searches of company and industry

information

Observations during company visits

• Prepare questions to ask about your interests, the

organization, policies, and benefits

• Practice interview skills

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End of Lecture

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