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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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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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Tanggungjawab Pencari

Nafkah

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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.

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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.

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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.