Personal Finance Chapter 6 Summary

1. Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. (4-6 sentences. 2.0 points)

(2) Is depleting your emergency savings / savings to free up your monthly budget by eliminating your car payment? Paying cash for your car may be the best option if the interest rate you earn on your savings is lower than the after-tax cost of borrowing. By educating yourself on fair car purchase price, appropriate interest rates, and negotiation tactics can save you a lot of money at the end.

c. Smaller payments mean more time in debt. d. Your lower interest loans also get rolled into the deal so you end up with minimal savings.

My parents receive an earned income, meaning they work for it, unlike unearned income like child support and disability. My mom works as a Human Resources Director; she over sees all investigations in her facility and hires and fires people. My dad works as an Operations Sales Manager, so he over sees all of the different sales. They both have salary wages, so their income isn’t based on hours.

What is inflation risk? prices on an item or service may rise or fall. Deciding to buy at a particular time runs the risk that a price may fall after the purchase, or rise before the purchase.

There is a high positive correlation between the interest rate of housing mortgage loan and the government's long-term guarantee interest rate. Mortgage institutions offering fixed rate mortgages may be adversely affected by rising interest rates, because their mortgage financing costs will increase, while mortgage interest income will remain unchanged. Lenders can reduce interest rate risk by offering adjustable rate mortgages, so mortgage income may vary with changes in financing costs as interest rates change.

This is the starting point for preparation used by accountants and business owners. The income statement is significant because it shows how successful a company is during the time interval specified in its heading. Businesses pay particular attention to the profitability of how successful they were for that period. If for any reason a company was not able to operate profitably, people such as bankers, lenders, and or creditors may be cautious to grant additional credit to the company. Net income deals with the amount of money left over after all operating expenses, interest, taxes and preferred stock dividends which were deducted from a company’s total revenue. CAH produced net income in both 2015 and 2014, $2,986,000,000 in 2015 and $2,821,000,000 in 2014.

The Net income a company’s total earning minus all the all the deduction, depreciation, interest and taxes. It is the total profit earned during the period. In the tables above The net income paint a very different picture. Verizon was able to stay in the positive in the last three years while Sprint was in the negative for the last three years. This is never a good sign for a corporation because it continually starts out in the negative and caught deficiency in area as the company scramble to make up for the loss revenue.

Every day of our daily lives we are exposed to a large variety of risks. Those risks can include large financial losses that may occur from investing in the stock market, to damage to your vehicle while driving to work, or fire damaged to your property while on vacation. All those unforeseen events can have the ability to drain all your financial resources, which can cause some major damage to your financial goals and stability. Personal risk management is important because it helps reduce and sometimes eliminate those potential risks. By managing and assessing risks we can alleviate potential financial losses and ensures that our way of life can remain unaffected by those unforeseen events. (Personal Risk Management, 2016). Together there are five risk management steps that are combined to deliver a simple and effective risk management process. Those steps include identifying the risk, analyzing the risk, evaluating and ranking, treating the risk and finally monitoring and reviewing the risk while implementing changes as needed (Schurr, 2016)

In personal finance, we are currently talking about Establishing Credit. A credit report is the complete record of your borrowing and repayment performance. Write 2-3 paragraphs, using complete sentences, detailing why a credit report is so important in your life. Please make sure you discuss the four types of information found on a credit report, what credit reports are used for, what the three major U.S. credit bureaus are, and what causes bad credit (your credit score to fall), what causes good credit (or your credit score to rise), and why you should request a free copy of your credit report each year. Be aware of grammar, punctuation, and spelling. Remember to be detailed and complete in your answers.

Do you think students should take personal finance in high school in order to graduate high school?

In 2014 summer semester, I took the Fin 6308 “Personal Finance” course. Personal finance is a basic business education course that is focus on “personal financial management issues and planning techniques”, which include providing a “consumer-side view of credit management, budgeting, personal financial statement analysis, insurance planning, retirement planning, investment planning, asset accumulation and distribution planning, tax planning, estate planning and employee benefits planning”. Although the course may not be consistent with any concentrations that are specified by the plan of Master of Science in Finance, I gain plenty of useful knowledge from this online class.

Location, location, location and maybe for the ladies a large kitchen, nice bathrooms; and the guys a garage (a possible man cave or work shop) influence peoples buying decision. Other buying decisions are calculations, needs, values, and opportunity costs.

Net income is total revenues minus total expenses incurred to generate those revenues all within the same reporting period. Net income is calculated by the accrual accounting methodology meaning that the expenses incurred to generate revenues are reported at the same time the related revenues are reported. Both revenue recognition and expenses paid may not coincide with actual cash transactions. Net cash from operating activities, on the other hand, is not determined by accrual but by

helps a person to manage his personal finances and also to describe the three products of