Category Chapter_19

Dec 17 2022

Personal Finance Simulations for Budgeting and Investing

Question:  What is a Personal Finance simulation? 

Answer:  A Personal Finance simulation allows students to fine-tune their decisions when they encounter real-life scenarios while taking a Personal Finance course. 

The authors of Personal Finance, 14e and Focus on Personal Finance, 7e have partnered with StockTrak.com to provide students with an interactive learning experience before they leave the classroom.   

The simulation that accompanies the Kapoor Personal Finance texts includes two components–a personal budgeting simulation and an investing simulation.

The Budgeting Simulation

  • Students assume the role of a full-time employee or part-time employee living on their own.
  • Over a virtual 12-month period, students review their estimated income and expenses, create monthly budgets and savings goals, and try to build an emergency fund. Each month takes about 20 minutes to complete.
  • Each month students manage their checking, savings, and credit card accounts as they deal with life’s expected and unexpected events that affect their budget.  
  • Within the simulation, additional personal finance tutorials are available to make sure students are learning about budgeting, banking, credit, employment, taxes, insurance, and more.
  • A class ranking based on net worth, credit score, and quality of life keep the students fully engaged and professors informed of each student’s progress.

The Investing Simulation

  • Students receive a virtual $25,000 in a brokerage account.
  • They can research U.S. stocks, ETFs, bonds and mutual funds and create their own investment portfolio.
  • All investment trades are based on real-time market prices.
  • Within the simulation, interactive tutorials help students get started and provide additional information during the simulation.
  • Students can monitor their performance versus their classmates.  At the same time, professors can track each student’s progress.

And BEST of ALL, with the new partnership between Stock-Trak and McGraw Hill, classes using the Kapoor Personal Finance textbook get a 50% savings when students register for the simulation – only $9.99 per student instead of retail price of $19.99.

Teaching Suggestions

  • Visit StockTrak.com/kapoor to learn more about the Personal Finance Budgeting and Investing Simulation.  You can learn even more by watching a short video or accessing the Kapoor demo materials located toward the bottom of the above site. 
  • It’s easy to get started.  All you need to do is access the above site, register your classes for Spring 2023, and indicate the dates you want your student to have access to the Personal Finance Simulation.  The site will generate a unique link for you to give to your students.
Jul 5 2014

Managing someone else’s money

Millions of people serve as fiduciaries, someone who manages money or property for another person who is unable to do so. This responsibility provides caring assistance while also protecting the person from potential scams and fraud.  Many older Americans experience declining capacity to handle finances, which can make them vulnerable.   The main responsibilities of a fiduciary are to: (1) act in the person’s best interest, (2) manage money and property carefully, (3) keep money and property separate from own, and (4) maintain good records.

The Consumer Financial Protection Bureau (CFPB) recently published four guides to help financial caregivers, particularly those who handle the finances of older Americans.  These guides are designed for those who serve as agents with power of attorney, a court-appointed guardian, a trustee or as a government fiduciary, such as a Social Security payee.

The guides will assist financial caregivers as they: (1) plan and implement their duties, (2) attempt to avoid scams and financial exploitation, and what to do if the person is a victim, and (3) require additional information; the guides tell where to go for help.

For additional information on a managing someone else’s money, go to:

http://www.consumerfinance.gov/managing-someone-elses-money

Click to access 201306_cfpb_msoa-participant-guide.pdf

Teaching Suggestions

  • Have students talk to someone who manages money on behalf of someone else.  Obtain information about the activities and concerns they have encountered.
  • Prepare a list of actions that might be taken to avoid scams targeted at older consumers and other vulnerable audiences.

Discussion Questions   

  1. What are situations that might require a person to manage the money of another person?
  2. What are examples of frauds and scams aimed at older consumers?
  3. How might a person avoid frauds and scams?
Jun 28 2014

Estate Planning: The Funeral Rule

You have already prepared a will; a living will and advance directives; and perhaps an ethical will. Now is your opportunity to prepare a letter of last instruction which can provide your heirs with important information on your funeral arrangements.

The federal law makes it easier for you to choose and pay for only the products and services you want or need when planning a funeral. The Funeral Rule, enforced by the Federal Trade Commission, requires funeral directors to give you itemized prices in person, and if you ask, over the phone.

Planning ahead is the best way to make informed decisions about funeral arrangements. An advance plan also spares your family from making quick choices during the time of grief. Comparison shopping, either in person or by phone, can save you money or is much easier when done in advance.

For more information and a complete copy of the Funeral Rule go to

http://www.ftc.gov/bcp/edu/microsites/funerals, and http://www.funerals.org

 

Teaching Suggestions

You may want to use the information in this blog post and the original sources to discuss

  • The cost of a traditional burial, including a casket and vault.
  • Do funeral providers take advantage of clients by insisting on unnecessary services and overcharging consumers?

Discussion Questions

1. Why should one consider making funeral arrangements in advance?

2. Are you obligated to buy a package plan which includes products and services that are most commonly sold by funeral directors?

Apr 12 2014

Should You Worry About Estate Tax?

The estate tax is a tax on your right to transfer property at your death.  Most relatively simple estates do not require the filing of an estate tax return.  However, if your estate is $5,340,000 in 2014, your estate’s representative must file the return.

Who should you hire to represent you, prepare and fill your return?  The answer depends on how large and complex is your estate, how many beneficiaries you have and are they cooperative?

Discuss this matter with several estate tax professionals.  Ask about their experience and referrals.  Most estates hire the services of both attorneys and CPAs.

For additional information on estate planning and estate tax matters go to http://www.irs.gov/Businesses/Small-Businesses-Businesses-&-Self-Employed/Frequently-Asked-Questions.

Discussion Questions

  1. What is included in your estate?  What is excluded?
  2. What deductions are available to reduce the estate tax?
  3. What might be advantages of hiring the services of estate attorneys and CPAs?

Teaching Suggestions

You may want to use the information in this blog post and the original source to discuss

  • How can charitable gifts and bequests reduce estate and inheritance taxes.
  • Different types of taxes imposed on a deceased’s estate.
  • Arguments in support and against the estate tax.