Professional Documents
Culture Documents
The purpose of these assignments is to help you put together your own personal or
family financial plan. This personal or family financial plan is a careful evaluation of
each of the major areas of personal finance to help you as you improve your financial
situation. While none of us are perfect (nor hopelessly lost) in what we do, we can all
improve. We believe that the information in this website is very important to the
improvement process. However, after you read each section, it will mean more if you
will do the assignment, read the recommended readings, and use the teaching tools as
you put together your financial plan. If you are married, we strongly recommend you
discuss the information with your spouse. We welcome you on your quest for
increased financial self-reliance from a gospel perspective.
- Page 1 -
- Page 2 -
- Page 3 -
5. Cash Management
Assignment
Your assignment is to review your current cash management framework. What interest
rate are you earning on your savings account(s)? What are you paying in other fees and
expenses for this savings account? What interest rate are you earning on your checking
account(s)? What are you paying in other fees and expenses for this checking account?
What cash management vehicles should you be using which can help you get higher rates
of interest on savings or checking, and still give you adequate liquidity to meet your
needs for cash?
Readings
Teaching Tools
- Page 4 -
- Page 5 -
- Page 6 -
Debt impacts our ability to grow spiritually. If you are in debt, or know others in debt,
think through the reasons for that debt. Are there things that you might have done or
done without that would have reduced that need for debt?
You were given your agency by a loving Father in Heaven in the Garden of Eden. But
while you have your agency, you cannot determine the consequences of that agency.
Consumer debt is not only a bad choice financially, but it is long-lasting and both
spiritually and emotionally draining. Your choices must coincide with your goals
discussed earlier.
Review any debt that you may have, including consumer debt, mortgage debt, or student
loans for education. What interest rates are you paying? What are the additional costs
for the loan? Are there any other fees? Write out your debt situation for each debt
including: creditor, phone number, reason for the loan, principle owed, interest rate,
minimum payment, and when you expect to have the loan paid off. Once you have
written down all your debts, determine a debt reduction strategy to reduce your debt. In
the reading, One for the Money, Elder Ashton offers a good method.
Finally, write down your views on future debt. What are your thoughts and reasons you
feel as you do toward debt?
If you have debt, two tools that may be useful are the TT20 Debt Elimination Worksheet
which helps determine which debt to pay off first, that TT9 Debt Amortization and
Prepayment Spreadsheet which gives a debt amortization schedule as you repay debt.
Readings
2. Marvin J. Ashton, One for the Money: Guide to Family Finance, adapted
from the April 1975 Welfare Conference Address.
13. Ezra Taft Benson, Pay Thy Debt, and Live, Ensign, June 1987, 3.
8. Janene Wolsey Baadsgaard, Escaping the Debt Trap, Ensign, Aug. 1996, 1718
Teaching Tools
20. Debt Elimination Worksheet
This excel document gives a framework for paying off debt that
encourages you to pay off your most expensive debt first, and then your
next most expensive, etc., until you have paid off all your debts.
9. Debt Amortization and Prepayment Spreadsheet
This excel document gives a debt amortization and prepayment schedule
to help as you reduce and eliminate your debt.
- Page 7 -
5. Insurance
11. Insurance 1: Basics
Assignments
- Page 8 -
- Page 9 -
- Page 10 -
- Page 11 -
- Page 12 -
- Page 13 -
Your assignment is to review the available investment vehicles that you can use to pay for
your childrens education. What is the priority of money for education? Which vehicles
should you use first, and why? We will in the next section begin discussing investments,
so for now review the investment vehicles which will help you most to save for your
childrens education.
Readings
47. Henry B. Eyring, Education for Real Life, Ensign, Oct. 2002, 14.
41. Russell M. Nelson, Where Is Wisdom? Ensign, Nov. 1992, 6.
42. Ardeth G. Kapp, The Treasure You Will Take with You, New Era, Jan.Feb.
1985, 9.
43 Janet Thomas, Giving It a College Try, New Era, Oct. 1991, 44.
7. Investments:
18. Investments 1: Before you Invest
Assignment
Understanding yourself is a critical part of investing. As such, it is important that you
understand not only your personal view on investing, but also your family view as well.
Start by taking the simple TT16 Risk Tolerance Test from the website. The results of the
test give simple recommendations of possible asset allocation targets for later on in the
discussion. How much risk are you willing to take?
Second, review the TT21 Key Questions on Money in the Family. What have been the
major experiences that have influenced your views on money and investing? What were
you taught growing up about money and investing? What would your parents say are the
things that they would do differently? How are you going to teach you children about
these topics?
Third, review the investment hourglass. Where are you on the top of the hourglass? Are
your priorities in order? Do you have adequate health and life insurance? Are you out
of consumer and credit-card debt? Do you know your goals, your budget, and are you
ready to begin writing your Investment Plan? Determine where you are and what you
need to do to begin to get ready to begin investing.
Readings
22. Charles E. Davis, A Bankers Dozen: Guidelines for Wise Investing
Ensign, Sept. 1991, 64.
25. Joe J. Christensen, Greed, Selfishness, and Overindulgence, Ensign, May
1999, 9.
Teaching Tools
- Page 14 -
- Page 15 -
Understand the major players in the investment area. How are they compensated? What
are their major areas of expertise? What is the difference between an independent broker
and a captive broker? What are their strengths and weaknesses? What about financial
planners? Come to understand the strengths and weaknesses of each of the different
types of providers of financial advice.
Readings
21. Investments 4: Stock Basics
Assignment
Your assignment is to review the past 5, 10, 25, 50, and 75 year history of stocks. How
have they performed? What do stocks add to a portfolio? What disadvantages do they
have? How can you minimize the disadvantages of stocks, while at the same time
enjoying their benefits?
What are the major benchmarks or indexes that follow this asset class (see TT15 Possible
Benchmarks for your Investment Plan)? You will likely include stocks in your
diversified portfolio, so select the major benchmarks you will follow to help you
understand how this asset class performs. To help understand the volatility of various
asset classes, use TT23 Return Simulation Worksheet to see the impact of volatility over
time.
Readings
Teaching Tools
15. Possible Benchmarks for Investment Plans
This document suggests possible benchmarks for most of the major asset
classes.
23. Return Simulation Worksheet
This worksheet helps you see the impact of various investment strategies
and volatility for different types of asset classes.
22. Investments 5: Bond Basics
Assignment
Your assignment is to review the past 5, 10, 25, 50, and 75 year history of both short-term
and long-term bonds. How have they performed? What do bonds add to a portfolio?
What disadvantages do they have? How can you minimize the disadvantages of bonds,
while at the same time enjoying their benefits?
What are the major benchmarks or indexes that follow this asset class (see TT15 Possible
Benchmarks for your Investment Plan)? ? You will likely include bonds in your
- Page 16 -
- Page 17 -
- Page 18 -
- Page 19 -
- Page 20 -
- Page 21 -
Second, do you have a will? If you have children, a will is critical as it states your wishes
regarding who should take care of your children should you pass away. Your choice is
either to write your will, or let the government determine what you would have wanted.
If you have few assets but have children and reside in a state that allows holographic
wills, write one immediately. At least your wishes will be known regarding who is to
take care of your children. If you are beginning to acquire assets, it is recommended that
you visit a legal attorney who can for a fee help you write up a will valid for your state.
Wills should be reviewed every 3-5 years or more often if your situation has changed.
Finally, are you concerned that your wishes regarding health care might not be able to be
made known to medical personnel should something happen to you and you are unable to
communicate your wishes. By filling out TT14 Sample Advance Directives to
Physicians, this document helps you state your intentions for medical care in event of an
emergency where you are unable to make your wishes known.
Readings
38. Steven J. Dixon, Planning Ahead: The Importance of Wills and Trusts,
Ensign, June 1983, 28.
Teaching Tools
14. Sample Advance Directives to Physicians
This document is a sample advance directives to physicians to help you
state your intentions for medical care in event of an emergency where you
are unable to make your wishes known.
- Page 22 -
- Page 23 -