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Purdue University

Personal Finance

Purdue University via edX

This course may be unavailable.

Overview

Have you ever watched the evening news and wondered what the anchor meant when she said: “…and the Dow closed 50 points in choppy trading today.”
 
Have you ever watched Mad Money on CNBC as the host screamed BUY BUY BUY or SELL SELL SELL and clapped your hands with his energy while having no clue what was happening?
 
Have you watched a movie where successful Wall Street characters dropped cool sounding financial jargon and you smiled and nodded without knowing what they were saying?
 
Have you ever had someone talk about Roth IRAs and 401Ks, and as you nodded, your heart was racing?

Have you ever received multiple credit card solicitations in the mail and wondered which ones to sign up for or even if to sign up for any at all?

If you answered yes to any (and maybe all) of the above then this class is for you.

Want to better understand investments? How credit works? How and why insurance products like life insurance, health insurance, and property insurance might be relevant for you? How to maximize your retirement savings? This course aims to make finding the answers to these questions, and many other similar questions, interesting and fun.

This personal finance course is divided into four modules: investments, credit, insurance and retirement. Each module is independent and may be studied on its own, although studying them together provides a deeper understanding of the interconnectedness across modules and the various tradeoffs across them.

Throughout the course, we will explore interesting and relevant real world examples so that you can better understand the underlying concepts. We will also relate relevant academic research to the topic on hand and show how the research findings are relevant to your daily financial decisions.

This course provides practical, ready-to-use solutions to use in your daily life. All solutions may not be equally important for you given your age and priorities, but they will certainly be relevant to you at some point in your life.

Syllabus

Course Objectives:
Throughout this course, we will explore interesting and relevant real world examples so that you can better understand the underlying concepts. We will also relate relevant academic research to the topic on hand and show how the research findings are relevant to your daily financial decisions. This course provides practical, ready-to-use solutions to use in your daily life. All solutions may not be equally important for you given your age and priorities, but they will certainly be relevant to you at some point in your life.

Sponsoring Faculty: Sugato Chakravarty
Sugato Chakravarty is a professor of Consumer Economics and a professor of Management (by courtesy) at Purdue University. He received his B.Tech in Chemical Engineering from Jadavpur University in India, his M.S. in Mechanical Engineering from the University of Kentucky, and his PhD in Finance from Indiana University (Bloomington, Indiana) in 1984, 1988 and 1994, respectively.

Target Audience:
This class is designed for high school students and individuals who seek a better understanding of personal finance.

Course Outcomes:
Students will learn:

  • How to manage your finances and make better financial decisions
  • The time value of money
  • Basics of stock markets and investments
  • The proper role of credit and how to use it judiciously
  • How insurance works
  • The interplay between investments, credit and insurance
  • The importance of saving for retirement sooner rather than later

Course Features:

  • Course Lecture Videos - Pre-recorded video lectures available for each lesson
  • Lecture Slides - Used in conjunction with lecture videos
  • Lecture Transcripts - Used to follow along with lecture videos
  • Discussion Forums - Used to facilitate student to student collaboration and discussion
  • Resources - Used to support understanding of lesson topics
  • Weekly Assessment - Used to test student knowledge of course materials

Grading System:
An overall score of 70% or greater is required to pass the class. There are five Quizzes. The quizzes will account for 100% of your final score.


Learner Issues & Support:
If students experience issues during the course, they should contact the Purdue NExT team at [email protected]. Students will receive a courtesy response within the first 24 hours of submitting an email.

Course Outline:

WEEK 1
Learning Objectives:
Classify the four modules of financial health as: investments, credit, insurance and retirement. Compare and contrast how various investment vehicles can work with each to create an optimal investment portfolio.
Lectures:
Lecture 1: Why Study Finance?
Lecture 2: Know Your Risk Limit
Lecture 3: Investments
Lecture 4: Ways to Invest
Lecture 5: Different Ways to think about Stocks
Lecture 6: Buying and Selling Stocks
Lecture 7: Examples of Market Timing
Lecture 8: Selling Stocks
Lecture 9: Stocks Have Homes - Part 1
Lecture 10: Stocks Have Homes - Part 2
Lecture 11: Where to find Stocks to Buy
Lecture 12: Price Discovery and Market Fragmentation
Lecture 13: Mutual Funds
Lecture 14: Vanguard Dividend Growth
Lecture 15: Vanguard 500 Index
Quiz: Week 1 Quiz

WEEK 2
Learning Objectives:

Demonstrate investing in stocks, bonds, mutual funds, and options.
Lectures:
Lecture 16: Financial Ratios
Lecture 17: Exchange Traded Funds
Lecture 18: Stock Market Indices & Companies DJIA
Lecture 19: Stock Analysis
Lecture 20: Bonds
Lecture 21: Bond Pricing & Bond Rating
Lecture 22: Bond Prices & How to Make Money Holding Bonds
Lecture 23: Instruments to Buy or Sell Stocks
Lecture 24: Margin Buying & Short Selling
Lecture 25: Options - Part 1
Lecture 26: Options - Part 2
Quiz: Week 2 Quiz

WEEK 3
Learning Objectives:
Translate "Offense wins games; defense wins championships!" into the financial literacy context. Describe the role of insurance and the various insurance vehicles available.
Lectures:
Lecture 27: Insurance Defensive Strategy
Lecture 28: What is the difference between Insurance and Speculation
Lecture 29: The Odds Marker & Underwriting
Lecture 30: Insurance Economics
Lecture 31: Term Insurance
Lecture 32: Universal Life
Lecture 33: Do you need Insurance?
Lecture 34: Miscellaneous Insurance
Lecture 35: Viatical Insurance
Lecture 36: Property Insurance
Lecture 37: Homeowner Insurance
Lecture 38: Automobile Insurance
Lecture 39: Setting Auto Insurance Claims
Lecture 40: Auto Insurance Premiums
Lecture 41: Decrease Premium
Lecture 42: Intuition Insurance Research
Quiz: Week 3 Quiz

WEEK 4
Learning Objectives:
Define how to use credit judiciously in one's life (including credit cards). Explain the role of credit scores and how to improve them.
Lectures:
Lecture 43: Role of Credit
Lecture 44: Different Faces of Credit
Lecture 45: Credit Household Debt Paradox
Lecture 46: Is all Credit Created Equal?
Lecture 47: Deadbeats vs Revolvers
Lecture 48: What Lenders Look For
Lecture 49: Credit Bureaus
Lecture 50: What do Credit Bureaus do with Information?
Lecture 51: FICO Score
Lecture 52: Guts of a Credit Report
Lecture 53: Bankruptcy
Lecture 54: Credit Rationing
Quiz: Week 4 Quiz

WEEK 5
Learning Objectives:
Identify the role of Social Security in one's retirement portfolio and the current crises in the Social Security Trust Fund. Diagram why starting early with your retirement portfolio and using time value of money (TVM) allows you to have more with less.
Lectures:
Lecture 55: Start Early, Live Happy - Retirement
Lecture 56: Three Legged Stool - Three sides to Retirement
Lecture 57: Social Security
Lecture 58: History of Social Security
Lecture 59: Fight for the Social Security Reserves
Lecture 60: Pensions
Lecture 61: Benefits of Defined Contributions
Lecture 62: Which Retirement Plan Should You Choose?
Lecture 63: Vesting
Lecture 64: Behavior Research in Retirement
Lecture 65: The Last leg of Retirement - Do it Yourself
Lecture 66: Roth IRA
Lecture 67: Traditional vs Roth
Lecture 68: Can People's Behavior in Retirement Savings be Improved?
Conclusion: End of Personal Finance
Quiz: Week 5 Quiz

Taught by

Sugato Chakravarty

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