Astronauts bring moon rocks back to their children, kindergarten teachers get hugs and Broadway stars get showered with flowers. While those may all be valuable perks, each group may feel envious of professionals with a Master of Business Administration (MBA) in finance. These finance pros enjoy what may be the best perk of all — expertise in planning for their own financial future and retirement.
Students in the Texas A&M University-Corpus Christi (TAMU-CC) online MBA with a Concentration in Finance program study financial topics extensively. In addition to a core business curriculum, the program offers Multinational Finance, Investment & Portfolio Theory, and Financial Markets & Institutions courses. Perhaps the most valuable finance concentration course is Personal Financial Planning, offering long-term professional and personal benefits.
What Will I Learn in a Personal Financial Planning Course?
If you enroll in TAMU-CC’s finance MBA and take this seven-week course, you will learn about the financial planning process, including the following:
- Cash, debt and savings management
- Taxes
- Housing decisions
- Insurance and risk management
- Investment alternatives
- Retirement and estate planning
Here is a brief preview of the broad areas covered in the study of personal financial planning, including why each is so vital in making informed decisions for you, your family and your clients.
Cash, Debt and Savings Management
You just received a $5,000 holiday bonus check. Should you put it in your IRA, pay down credit card debt or stash it in an emergency fund? Or should you proportion the money according to your priorities? If the interest you pay on your debt is higher than the interest you would earn on your investments after taxes, you lose money by investing. Of course, you have no idea what the market will do this coming year, so how can you make an informed decision? Many people never learn, but this course teaches you how to make consistently informed decisions.
Housing Decisions
Until recently, the common wisdom was to buy a house as soon as you could afford one. Why pay down a landlord’s mortgage when you could pay down your own and build equity? Volatility in the housing markets, the housing shortage, high interest rates and other considerations challenge this conventional thinking — or at least complicate it for people who don’t have a large amount of cash on hand.
The factors that determine when to buy a home, when to upgrade to a bigger home, where to buy, how much to put down, and how much to mortgage are complex. Investment properties require an even more sophisticated calculus. It pays to educate yourself on housing investment decisions, and this course provides a great foundation.
Insurance and Risk Management
Life insurance, car insurance, homeowners’ insurance and health insurance are all useful tools to manage risk and protect against loss. As with most personal financial decisions, the details matter most. In healthcare, should you pay higher premiums and a lower deductible, or the reverse? In life insurance, do you need a term or whole plan? How much liability insurance do you need on your car if you have a small business? Combine the wrong decision with an unfortunate event and you could undo every other financial move you make.
Investments and Alternatives
What should your asset allocation mix be among stocks, bonds and cash? Among stocks, you must consider diversifying among large, mid and small caps; value and growth stocks; and dividend and non-dividend producing equities. You can hold them all in mutual funds for active management or exchange traded funds (ETFs) to lower management expenses. With bonds, you can invest in corporate bonds and government bonds. What makes the yield higher on some than on others? Should you hold alternative investments like rare coins, art, real estate or cryptocurrency? When you understand how these choices work together to maximize returns while minimizing risks, you can make more confident choices and avoid panic during inevitable downturns.
Taxes
What is more valuable — a dollar earned or a dollar saved? A dollar saved is up to 40 percent more valuable because it is not taxed. Tax considerations influence so many of life’s most important decisions including those concerning marriage, children, income taxes, charitable donations, investments and purchases that you can deduct. Many U.S. citizens — if not most — do not fully understand the nuances of taxation and thus cannot make strategic tax planning decisions. The long-term result is a steady drip, or even a continuous leak in savings, which compounds over time.
Retirement and Estate Planning
If you have retirement accounts, you need to plan for disbursements from those accounts over time. Do you draw down aggressively and risk outliving your funds or do you take just enough to get by and leave what is left over to your heirs? If you own anything of value at all, you have an estate. You also have an estate plan, whether you design one of your own or the state determines what to do with your assets when you pass on. Of course, you want to understand wills, trusts and the estate tax system in order to avoid that scenario. The course provides a strong introduction to these concepts.
The information in TAMU-CC’s Personal Financial Planning course provides a lifelong foundation of knowledge that can enable you to meet your objectives and enjoy a happy retirement. You may want to pay down student loans, save for your child’s education, finance a fixer-upper, purchase a portfolio of insurance plans, or invest in real estate for an early retirement. When deciding what to do with your hard-earned money, the Personal Financial Planning course builds the knowledge you need to make confident decisions, as a finance professional and as an individual.
Learn more about the TAMU-CC online MBA in Finance program.
