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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
werent, 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

>1,5jt

Biokos

Biokos,
Dermacos

1jt1,5jt

Belia, Cempaka,
Mirabela

500rb1jt

Marta Tilaar Group

< 500rb

Demographic market
segmentation

< 500rb

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FINANCIAL PRESSSO TERRIBLE

Risiko:
1. Disability
2. Die too soon
3. Critical illness
4. Live too long

Deposito

Rumah

Mobil

Penghasilan

PRODUKTIVITAS VS USIA

Usia 55th

Usia 22th
Usia Produktif

Usia 65th
Usia Pensiun

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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.

1-13

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.
1-15

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

17

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

entre, drink water and skip dessert?

b) Order something from each menu item drinks,

appetizer, entre, 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

Financial goals

Family, children, education, religious, social, etc.

Finances can affect your ability to attain these

goals.

Financial independence is an important goal for

many people. Financial independence is defined

as having enough income or resources to be selfreliant.
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.

1-19

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.

1-20

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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 13%

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.

1-21

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.
1-22

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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 childs education or
planning for retirement.

Consumption and Savings Planning

Debt Planning
Insurance Planning
Investment Planning
Retirement Planning
Estate Planning
Income Tax Planning
Career Planning

1-24

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Life-Cycle Phases

Financial Planning Areas

Young adult (1825)

Consumption and savings;

career
Family formation (2635) Consumption and savings;
career; debt; insurance;
income taxes
Family development (36 Investment; retirement;
49)
income taxes
Family maturity (5060)
Investment; retirement; estate
Retirement (60?)

Estate; income taxes

1-25

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 Analysisinvolves 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 Coststhe 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.

1-26

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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
1-27

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.
1-28

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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 clientplanner relationship

6. Monitoring the
financial planning
recommendations.

2. Gathering client
data, including goals.

5. Implementing the
financial planning
recommendations.

3. Analyzing and
evaluating your
financial status
4. Developing and
presenting financial
planning
recommendations
and/or alternatives

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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.

17