U.C. Berkeley Extension
Survey of Personal Financial Planning X433
Errold F. Moody Jr.
The structure of this course will be both more intensive and more extensive than the norm. Students will address the fundamentals of financial planning via the textbook along with 1) real life applications that are rarely taught to financial planners and 1) Internet sites and information that provide additional current information and research. (While course requirements do not demand Internet capability, be advised that research via the Internet is clearly the leading edge of planning. Most practitioners will find a need for at least a "calling card site.) Specific sites will be identified each week for review.
Students will also be required to have a proficiency with a financial calculator. The class will focus almost exclusively on the HP 12c and its use in determining basic financial and retirement calculations. Others may be substituted that accomplish the same tasks (actually the HP 17BII is better- though more expensive.)
Attendance Requirements: If you expect to not be able to attend a class, please Email or call. One miss does not change your grade. Two absences may adjust your grade if on the cusp- i.e. from B- to C+. Three absences will almost assuredly change your grade by 10 points.
Tardiness: One is acceptable either at the beginning of class or after break (15 minutes). Twice is inexcusable and the 3rd will not be tolerated. You must be considerate of other students. Turn off all pagers and telephones during class time.
Grade: Quizzes- 45%
All are "take home"
Class discussion may also be reflected in grade.
Extra Credit: Double spaced, 4 page minimum report on any area of planning you have interest in, want more information on. Due one week AFTER final. Subject matter must be approved. A good report will not change your grade by 10 points, but perhaps by four- 76 to 80 for example.
All meetings will be preceded by a discussion of recent economics and articles addressing financial planning. If you do not stay current with national and international economics, you cannot do financial planning effectively. All students should become familiar with the publications and Internet sites of the Federal Reserve Boards.
February 1: Introduction, designations, degrees, securities licenses, Registered Investment Adviser, knowledge and competency, ethics and industry standards, fiduciary relationship and liability, continuing education, conflicts of interest- fee or commission?, dying too young or living too long, communications with client, analyzing data, coordination with advisers, know thy client, consumer education, Who Can You Trust?, investor psychology, men versus women, goals
Text: Chapters 1-5; newsletters
February 8: (continued from first session) Comprehensive or segment planning, consumer literacy and client intelligence and experience, contracts, fees, data gathering, net worth, budget, liability for incorrect information, client questionnaire, aggressive or conservative, implementation, balance sheet, debt restructuring, taxable versus tax deferred versus non taxable, credit, money market funds, borrowing, FICO, Basis
Text: Chapter 6, 7, 8, 9, 10, 11 (in preparation for classes after February 22. If not familiar with HP12C or similar financial calculator, please purchase and become familiar with basic keystrokes)
February 15: no class
February 22: Mathematical applications. Will include familiarity session with use of HP12C. Present and future value, mortgages, retirement budget, weighted average, returns. I will provide separate forms.
March 1: Income Tax Planning I- Federal and State taxes, marginal and effective tax brackets, income, deductions, AGI, taxable income, adjustment to income, itemized deductions, tax exempts, BASIS, schedule A and C, capital assets, holding periods, sale of principal residence, home office expense, loan points, 1031 and 1035 exchanges, depreciation, netting long and short term gains and losses, HEL loans
March 8: Income Tax Planning II, Insurance I. Term, whole, universal and variable life and applications, fixed and variable annuities, single premium and modified endowment contracts, cash value, expenses, loans, life expectancy, taxation, second to die policies, irrevocable trusts, use for college and retirement, settlement options, viatical settlements, direct purchase and sale, Internet capabilities.
Text- Chapters12, 13, 14, 15
March 15: No Class
March 22: Insurance II. Disability insurance, mortality verus morbidity, Health, auto, personal property insurance, Managed Care, HMO, PPO, Personal Liability, Long Term Care, MediCal, Medigap, Social Security.
March 29: Investments I, Fundamentals- alpha, beta, correlations, diversification, asset allocation, standard deviation, Sharpe Ratio, R Squared, etc. company and financial analysis, Stock Options, market timing, stock selection, efficient market theory, Markowitz, margin accounts, Risk tolerance, unsystematic and systematic risk
Text 16, 17
April 5: Investment II, Retirement Planning I- Mutual Funds, managed versus index, economics, Morningstar, Value Line, Fees and expenses, taxation, leading, coincident and lagging indicators, fundamental versus technical analysis, rebalancing, wrap accounts, real estate, buy and hold, DCA, Short Sales, Duration
April 12: Retirement Planning II- Social Security, Medicare, budgeting, types of risk, retirement plans- defined benefit, contribution; 401(k), IRA, Roth, SEP, Simple, annuities, reverse mortgages, five year averaging, vesting, TSA, rollovers, lump sum, lineage, lifestyle, pension and IRA distributions
April 19: Estate Planning I- Wills, probate, testamentary, revocable and irrevocable trusts, dying, durable powers, physicians directives, taxation, administrators and executors, community property, attorneys, Unlimited marital deduction
April 26: Estate Planning II; Charitable gifting, remainder and pooled funds, Crummey powers, life insurance trusts, Q tips, three year rule and application, Taxation.
Note: Not all subjects may be covered or covered in detail due to time constraints and size of class.