The Student's Guide to Financial Literacy

The Student's Guide to Financial Literacy

by Robert E. Lawless


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Presenting a broad array of financial knowledge, this interesting, easily understandable book will aid students and young adults in achieving their desired levels of wealth, success, and overall financial and personal fulfillment.

The recent global financial crisis was caused, at least in part, by the financial ignorance of many consumers. Many students and young adults in particular have never been taught the basics of financial planning. Yet, the earlier people move from financial illiteracy to literacy, the greater the benefits that will accumulate over time.

As The Student's Guide to Financial Literacy makes clear, practices adopted in the early years of adulthood can have the most dramatic effect on a person's ultimate quality of life, level of success, and age of retirement. This book is designed to convey financial wisdom in terms that are easy to understand with suggestions that are easy to apply. Readers will learn about the importance of budgeting and saving, the compounding of money, and how to create a diversified portfolio of investments. Included is advice on buying a first home, the characteristics of good debt versus bad debt, insurance and tax planning, even choosing the right career.

• Includes dozens of factual "Guess What?" boxes revealing interesting insights and facts

• Presents a list of the "Top Ten Mistakes to Avoid" summarizing the key teachings of the book

• Includes photographs geared toward students that reflect the topics of each chapter

• Offers a useful glossary that defines dozens of financial terms

Product Details

ISBN-13: 9780313377181
Publisher: ABC-CLIO, Incorporated
Publication date: 03/11/2010
Pages: 220
Product dimensions: 7.00(w) x 10.00(h) x 0.80(d)
Age Range: 14 - 17 Years

About the Author

Robert E. Lawless is currently the chief financial officer for an investment and advisory firm that manages over $500 million in assets and the managing director of a registered broker/dealer that raises capital for various investment products.

Table of Contents

Introduction xi

1 The Value of an Education 1

Targeting the Right Career 1

Educational Costs Versus Benefits 2

Paying for College 4

Enhancing Your Marketability 6

2 The Importance of Savings 13

The Wonders of Compounding 13

Inflation 16

Budgeting 17

Automatic Savings Plans 17

Buying Your First Home 19

The Goal of Retirement 24

3 Investments 25

Benchmarks and Indexes 25

Bank Products 28

Fixed Income 29

Equities 37

Mutual Funds 47

Exchange Traded Funds 53

Real Estate 54

Alternative Investments 62

Avoiding Investment Scams 72

4 Principals of Investing 77

Risk Versus Return 77

Diversification 80

Active and Passive Investing 87

Personal Investment Objectives 91

Portfolio Allocation Examples 94

Portfolio Rebalancing 96

5 Debt 99

Good Debt Versus Bad Debt 100

Other People's Money 102

The Importance of Your Credit Score 103

Preventing Identity Theft 105

Credit Cards 106

Key Financing Terms 111

Consumer Product Loans 117

Financing Your First Home 119

Home Equity Loans 123

6 Tax Considerations 125

Ordinary Versus Capital Gain Taxes 125

The Time Value of Money 129

Tax Deferral 130

Tax Avoidance 132

The Benefits of Retirement Accounts 133

The Tax Geek 137

7 Insurance 139

What Is Insurance? 140

Liability Insurance 141

Homeowners' Insurance 142

Automobile Insurance 143

Health Insurance 145

Disability Insurance 146

Life Insurance 147

The Protection of an Umbrella 148

Business Insurance 149

A Cost Versus Benefit Analysis 150

8 The Entrepreneur 153

The Big Idea 155

Creating a Business Plan 156

Finding Financing 161

Protecting Your Investment 165

9 Economics 169

The Economy 169

Recessions and Depressions 170

Budget Deficits and Surpluses 172

Fiscal Policy 174

Monetary Policy 175

Foreign Currencies 177

Booms and Busts 179

Leading Economic Indicators 181

Lagging Economic Indicators 182

10 The 10 Most Common Mistakes to Avoid 185

Appendix: Household Budgeting Model 193

Glossary 197

Bibliography 213

Index 215

Customer Reviews