Finance 101

[M237]

For what it's worth I wanted to share this power point. I made it for my little sister who just finish college and got her first job. I'm sure we've all heard people talking about the lack of financial education out there. Well this is my personal step towards remedying that problem. This is a basic lay out of what I think every person should know about finances.

Let me know if you have any critiques or if you think I should add something.

I plan on making a Wealth 101 power point also. I won't be a 'how-to-make-millions' (I'm a poor graduate student with lots of debt >.<  ). It will focus mainly on mindset and attitude along with some stuff about planning for retirement.

[M237]

Hmmm I should add a place for recommended Websites and Books

[K-ice]

That was lots of work.  Nice!

I would maybe suggest a shorter version... depending on your sis's interest she may get lost in all the details.

On slide 17 "Percentages" it might be good to show a pie chart.  I would also have 2-3 pies.

1) A Dumb debt pie, where the amount of fixed and guilt free is greater than 100% and savings are zero.

2) Your pie

3) A super saver pie.  Fixed 25%, Auto invest 10%, Savings 60%, (note 70% total savings rate MMM style), 5% guilt free.
The 60% savings can be a bit flexible and put towards emergencies, cars, or trips but most should be invested as well.

Slide 19.  I think the most important thing about CC is to pay them off in FULL every month.  That is all you need to know!  It should be in bold on the first slide.

[SwordGuy]

Nice work!

I think you have a mix of total newbie info and info for people who have already saved a lot.  You might do better to split it into two presentations.

I took the time to suggest some changes, I've attached the edited powerpoint.  I hope you find the suggestions useful.  Some are simple typos or wordsmithing, some are more nuanced (and I think useful) ways to present the info.

[Uturn]

Lots of good info in there, I can tell you put some time into it.  However, I only made it 15 pages.  Try to think like a person who does not care.  How would you grab that person's attention. 

I might put in a chart showing compounding interest.  $500/mo car payment vs $500/mo invest over 5, 10, 15 years.  After 20 years you have $X in savings or a nice car. 

[405programmer]

I like the presentation! I didn't read every slide in depth but I did notice that your tax slide was a little off. Someone making $50,000 would not have to pay $12,500 in taxes because the 25% tax is the marginal rate. Maybe add a slide about that? Although to be completely fair this deck is pretty complex already so that may be creeping into the advanced Finance slide deck ;)

[zephyr911]

I like the presentation! I didn't read every slide in depth but I did notice that your tax slide was a little off. Someone making $50,000 would not have to pay $12,500 in taxes because the 25% tax is the marginal rate. Maybe add a slide about that? Although to be completely fair this deck is pretty complex already so that may be creeping into the advanced Finance slide deck ;)

Good point... in the 2015 tables, making $50K is taxed at $6,596 for a married couple (eff. 13.2%) or $8,363 for single (eff. 16.7%).
I do think the distinction between marginal and effective tax rates is important and should be taught at a low level, simply because so many people fail to understand it, and so many bad decisions are made based on that misconception. Case in point: just heard someone ask if a drop in net pay might have been caused by someone's raise putting them in a higher bracket. In fact, jumping brackets might dramatically increase withholding, might even consume the majority of a raise, but would never reduce net pay if calculated properly.

[Fishindude]

Lots of good info in there, I can tell you put some time into it.  However, I only made it 15 pages.

Me too .... "Power Point Poisoning".
IMO, Way too much for the financially uninformed to take in and grasp in a single sitting.

[Lordy]

One thing you should include is the risk/reward relation.

There is always a risk in investing and the reward correlates to that: risk >= reward.
If some person offers you high reward but claims low/no risk, something is wrong.

[Migrator Soul]

M237

May I take this, chop it up a bit, and present it to my soldiers in my platoon? I think this may be beneficial for them, but I need to change the format/shorten it a bit.

[M237]

That was lots of work.  Nice!

I would maybe suggest a shorter version... depending on your sis's interest she may get lost in all the details.

On slide 17 "Percentages" it might be good to show a pie chart.  I would also have 2-3 pies.

1) A Dumb debt pie, where the amount of fixed and guilt free is greater than 100% and savings are zero.

2) Your pie

3) A super saver pie.  Fixed 25%, Auto invest 10%, Savings 60%, (note 70% total savings rate MMM style), 5% guilt free.
The 60% savings can be a bit flexible and put towards emergencies, cars, or trips but most should be invested as well.

Slide 19.  I think the most important thing about CC is to pay them off in FULL every month.  That is all you need to know!  It should be in bold on the first slide.

Great idea. That'll be an excellent opportunity to spread the MMM mindset ;D

[M237]

Nice work!

I think you have a mix of total newbie info and info for people who have already saved a lot.  You might do better to split it into two presentations.

I took the time to suggest some changes, I've attached the edited powerpoint.  I hope you find the suggestions useful.  Some are simple typos or wordsmithing, some are more nuanced (and I think useful) ways to present the info.

Thanks for taking the time and fixing it up!
After making it 60+ slides does seem like a daunting presentation...
Good idea on splinting it into 2 presentations. I just felt like everything was crucial so I couldn't do it.
As for the wordsmithing, ugh!, I'm forever haunted for my neglect of grammar and English courses =[

M237

May I take this, chop it up a bit, and present it to my soldiers in my platoon? I think this may be beneficial for them, but I need to change the format/shorten it a bit.

Absolutely! That's the whole point of these forums. To share the knowledge and mindset. Feel free to use it and make it yours.

One thing you should include is the risk/reward relation.

There is always a risk in investing and the reward correlates to that: risk >= reward.
If some person offers you high reward but claims low/no risk, something is wrong.

Hi Lordy,
I'll add that into my wealth 101 power point. My lil sister was asking me what % she should allot to her 401k. I  didn't want to force her to put in as much as possible. Rather I need to lay out the risk/reward scenario and let her decide.

She's 23 right now working as a lab tech. She wants to become a doctor. I'm not sure what her retirement plans are so that's something that we'll need to talk about.

Lots of good info in there, I can tell you put some time into it.  However, I only made it 15 pages.

Me too .... "Power Point Poisoning".
IMO, Way too much for the financially uninformed to take in and grasp in a single sitting.

>.< some is better than none. I'll try n make it more 'bit-size' by splitting it up into 2 power point. Hopefully dividing it into sections will also help.


 

I like the presentation! I didn't read every slide in depth but I did notice that your tax slide was a little off. Someone making $50,000 would not have to pay $12,500 in taxes because the 25% tax is the marginal rate. Maybe add a slide about that? Although to be completely fair this deck is pretty complex already so that may be creeping into the advanced Finance slide deck ;)

Good point... in the 2015 tables, making $50K is taxed at $6,596 for a married couple (eff. 13.2%) or $8,363 for single (eff. 16.7%).
I do think the distinction between marginal and effective tax rates is important and should be taught at a low level, simply because so many people fail to understand it, and so many bad decisions are made based on that misconception. Case in point: just heard someone ask if a drop in net pay might have been caused by someone's raise putting them in a higher bracket. In fact, jumping brackets might dramatically increase withholding, might even consume the majority of a raise, but would never reduce net pay if calculated properly.
[/quote]

I think I made a note on that page that the tax info wasn't accurate and I was using it for an example. The last page of the PP talked about how you're actually taxed.

Lots of good info in there, I can tell you put some time into it.  However, I only made it 15 pages.  Try to think like a person who does not care.  How would you grab that person's attention. 

I might put in a chart showing compounding interest.  $500/mo car payment vs $500/mo invest over 5, 10, 15 years.  After 20 years you have $X in savings or a nice car. 

Got it. I can add that chart in.