FINE 4050 R

3.0: Personal Finance

Course Outline
Winter 2016
Mondays, 14:30-17:30, beginning on January 4
Room: W136

Instructor
George M. Klar, CFA
N203G,
[email protected]
Office hours:
Mondays
appointment only

Assistant

&

Stacey-Ann Filici
N204A
+1.416.736.5072
Sundaysby [email protected]

Prof. Klar is has extensive industry experience in the field of institutional investing,
risk management and personal finance. He has published and spoken at
conferences throughout North America on these and related topics. His finance
career spanned over 25 years with such noted firms as Scotiabank, Manulife, Beutel
Goodman and Blackrock. He joined Schulich in the BBA, MBA and MFIN programs in
2008.

Brief Description
Students learn personal financial management both for professional work in the
financial services industry and for their own families. Topics include goal-setting,
budgeting, taxation, debt management, risk management, insurance, investment
principles and practice and retirement planning. Much of the course is based upon
realistic problems and cases.
Prerequisites: SB/FINE 2000 3.00

Contents
Course Learning Outcomes........................................................................................ 2
Deliverables at a Glance............................................................................................. 2
Course Material.......................................................................................................... 3
Student Preparation for Class and Class Participation: Expectations..........................3
Written Assignment/Projects: Description...................................................................3
Class-by-Class Syllabus.............................................................................................. 4
Calculation of Course Grade....................................................................................... 7
General Academic Policies: Grading, Academic Honesty, Accommodations and
Exams......................................................................................................................... 7
Communicatng with the Professor..............................................................................8
Quick Reference: Summary of Classes, Activities and Deliverables.........................10

FINE 4050R pg. 2

Course Learning Outcomes

This course is a general introduction to personal financial planning in Canada. The
purpose of the course is to learn how to think about long-term financial planning in
the presence of uncertainty as it pertains to the individual. My goal is to help you
make better financial decisions.
The lectures are built around a series of topics including; Mathematics & Statistics of
Personal Finance, Personal Balance Sheet, Human Financial Life Cycle, Personal
Income Tax Strategies, Insurance and Risk Management, Controlling Credit and
Debt, Renting, Buying and Financing a Home, Risk & Return in the Capital Markets,
Optimal Investment Strategies, and finally, Retirement and Pensions.

Organization of the Course

I urge and encourage you to use this course as a unique opportunity to develop an
ongoing awareness of the personal financial environment around you. Read the
financial mediasuch as the Globe & Mails Report on Business (ROB) or the
National Posts Financial Post (FP)on a daily basis and pay specific attention to
developments in the capital markets, changes in regulation, the debate around
income taxes, pension reform and the general Canadian economy.

Notes:

1. Faxed and/or emailed and/or late assignments will not be accepted under any
circumstances unless a valid medical reason is provided. Assignments listed are due
at the beginning of class. The Faculty Council of the Schulich School of Business
has passed a motion prescribing a range and target mean for final grade
distributions for elective courses. The motion states that the average grade using a
nine point scale must be in the B to B+ range. Please note that I will be grading in
accordance with this guideline.
2. The quickest and most reliable way to reach me is via E-mail. I will also be
posting information and lecture notes on the Course Material Database (CMD) on a
regular and ongoing basis.
3. Details on the group research project (max = 4 per group.but this depends
entirely on class size) will be provided in to you in a few weeks. You will have to
write a report on a particular topic and give a 15 minute group presentation in
class.
4. Make sure to bring a business calculator to every class. We might be doing
problems in class from time to time. Also, the homework assignments will involve a
substantial amount of spreadsheet calculations. At the very least, you must
familiarize yourself with the basic functions in Excel.
5. The Teaching Assistant (TA) for this course will be grading the homework
assignments.

Deliverables at a Glance

FINE 4050R pg. 3

Assignment/Task
Class Participation
Homework Assignment #1
Technical
Homework Assignment #2 Case
based
Group Project (Presentation + WriteUp)
Final Exam (open book)
Total

Quant
%
Total
ity
Weight
%
1
5%
5%
1

10%

10%

10%

10%

30%

30%

45%

45%

100%

100
%

Author
Individ
ual
Individua
l
Individ
ual
Group
Individua
l

Course Material
Required reading for this course includes the following book. It is available for
purchase from the York University Bookstore (http://bookstore.blog.yorku.ca):
Strategic Financial Planning Over the Lifecycle:
A Conceptual Approach to Personal
Risk Management
By.Narat Charupat, Huaxiong Huang and Moshe A. Milevsky,
Cambridge University Press, 2012,
Paperback, (ISBN13:9780521148030).
(This will be referred to as SFPL)
Each section of a Schulich-based course has a Course Materials Database (CMD)
created within Lotus Notes. Every CMD includes some important general information
for Schulich students. FINE4050 class lecture notes will be available at this location.
(Download before/after each class from CMD)
The Course Materials Database (CMD) has been created within Schulichs Lotus
Notes. It contains general information and materials specific to this course. Check it
frequently.

Student Preparation for Class and Class Participation: Expectations

Preparation. To do well in the course, students should, at a minimum, i) prepare for
and attend every class, ii) keep up with the assigned readings, and iii) be up-to-date
on financial market developments.
Students are expected to know basic mathematical concepts and be able to use
Excel with proficiency.
Additional material will be posted on the course website.
Please note that laptop computers are allowed in class for the purpose of notestaking only. I reserve the right to disallow the use of laptops in class for all students
if this condition is violated.

FINE 4050R pg. 4

Class Participation (contribution). Marks are allocated to class attendance and
participation. It is in students best interest to attend every class and make the best
of the learning experience (which you are paying a lot of money for). You are
encouraged to actively participate in class discussions, ask thoughtful questions,
provide examples, or challenge the conventional or accepted viewpoints from the
business media, your peers and even the instructor. This is considered part of the
learning experience.
Based on past experience, students who skipped classes rarely did very well in the
course.

Written Assignments/Projects: Descriptions

Assignment #1 (Technical) is a collection of technical problems in personal
finance that revolve around the use of the time value of money, working with
statistics and probability concepts that will be required for the course. The due
date is Jan 25 and will not be extended.
Assignment #2 (Case) is a collection of problems that have to do with
integrating taxes and consumption planning over a long time horizon. This will
require you to complete a tax return (for 2014) and/or solve a variety of technical
calculations around after-tax spending and consumption rates. This is due on Mar
7 and will not be extended.
Group Project Write-up and Presentation. This work will be done in groups of
either 3-4 (depends on class size). You will be assigned an article, book, paper or
topic that you will have to read, analyse, present in class and then provide a
summary report. Students are expected to be in attendance for 2 separate dates
where the in-class presentations will be made. Attendance will be taken and if you
miss the presentations, a penalty is assessed of 1 point per missed day.
The Final Examination will consist of responding to 6-8 questions. The exam will
take place during the regularly scheduled examination period following the end of
the term. The Universitys Registrars office sets specific examination dates after
the term begins and enrolment patterns are identified. Students should not make
plans to be away from Toronto during any portion of the announced examination
period until the dates for their specific examinations have been announced.
Note: The write up for the Group Project is due at the start of the Final
Exam. Late submissions will NOT be accepted for ANY reason, and will be
given a grade of 0%.
The exact date of the exam will be announced in November and is set by
York University and is not under the control of the professor.

Class-by-Class Syllabus

Topics, readings, and other preparations for every class are listed below
Note: If any changes in this schedule become necessary, notifications will be posted on the course
CMD, and when changes need to be announced between classes, an email will be sent to students
Lotus Notes email accounts, notifying them of the change.

FINE 4050R pg. 5

Lecture:
Lecture 1

The Mathematics & Statistics of Strategic Financial Planning

Prep:
What is required for this course? What type of math?
Introduction to the Personal Financial Balance Sheet
What is your Net Worth (assets & liabilities) & Human
Capital?
What is the relationship between Corporate & Personal
Finance?
Read:
1. SFPL Chapter 1 (quickly review this on your own)
2. SFPL Chapters 2, 3

Lecture 2

TVM for Personal Finance & Intro to Human Financial Life Cycle
Prep:
Review TVM concepts.
Students will be asked to answer Qs from Chapter 2 & 3
Why should you bother saving any money?
How much do you need in order to retire comfortably?
What is the CPP? Is the CPP a smoothing function? Why it
matters?
Read:
1. Chapter 4
Attempt to Answer:
1. EOC Questions on SFPL Chps 2, 3 (students may be called
on to do Qs)

Lecture 3

Human Financial Life Cycle Concepts (cont)

Prep:
Are you saving too much or too little?
What is the govts role in saving for you own future?
Whats the impact between saving now vs. spending
tomorrow?
Read:
1. SFPL Chapter 4
Homework handed out:
2. Technical HW# 1..this is due NEXT class (at Lecture 4)

Lecture 4

Credit & Leverage

Prep:
What is leverage and does it make sense to use it?
How much can you afford to borrow?
What is the difference between healthy & unhealthy debt?
Discussion about various type of Mortgages

FINE 4050R pg. 6

Prep:
1. SFPL Chapter 5
Homework submitted:
1. You must hand in HW #1 at the start of Class
Lecture 5

Housing & Home Ownership

Prep:
Should you buy or rent? How important it this decision?
What are some of the reasons for home ownership?
What financial factors of often ignored when considering a
home?
What non-financial factors impact the decision?
Read & Prepare:
1. SFPL Chapter 11
2. Try EOC Question #1

Lecture 6

Personal Income Taxes

What are taxes? How are they set? What can you do about
it?
What is the difference between a tax deduction and a tax
credit?
What strategies can YOU use to maximize your after-tax
return?
How should taxes influence you financial planning
decisions?
Why do some Canadians pay no tax?
The T1 Form
Read & Prepare:
1. SFPL Chapter 6
2. Powerpoints from GMK
3. The T1 Form

Lecture 7

Insurance And Risk Management

Prep:
Is Insurance a GOOD investment?
What risks should you insure and which ones should be
avoided?
How much life insurance does a family need?
Can Insurance be used for other purposes? Tax saving?
Read:
1. SFPL Chapter 7 & 8

FINE 4050R pg. 7

Lecture 8

Risk and Return in Capital Markets

Prep:
What are the major asset classes?
How do you build a diversified portfolio? Why should you?
Mutual funds and ETFs
What are the odds that I will make money? Beat inflation?
What are the risks of owning Risky investments?
Read:
1. SFPL Chapter 9
Homework handed out:
2. Technical HW# 2..this is due NEXT class (at Lecture 9)

Lecture 9

Optimal Investment Strategies

Prep:
What is correlation and why is it important for portfolio
construction?
How does Human Capital impact investing decision?
Should younger and older people invest differently?
What is a RRSP and a TSFA? Which one is better?
Read:
1. SFPL Chapter 10
Homework submitted:
2. You must hand in HW #2 at the start of Class

Lecture 10 Retirement & Pensions

Prep:
What is a pension and why should a 21 year-old care about
it?
Types of pensions (DB vs DC)? What happens to pensions
when I die?
What is a life annuity and when (if ever) do I buy one?
Read:
1. SFPL Chapter 12
Lecture 11 Group Presentations all students are required to attend
Lecture 12 Group Presentations all students are required to attend
FINAL EXAMINATION (3 hours, in the week of Dec 9-23)
(This is set by the ADAs office..not the professor)

FINE 4050R pg. 8

Calculation of Course Grade

Grades at Schulich are based on a 9-value index system. The top grade is A+ (9)
and the minimum passing grade is F (0).
The course grading scheme for undergraduate courses conforms to the 9-point
system used in other undergraduate programs at York. The possible course letter
grades for a course (and the corresponding grade points awarded for each grade
are:
A+
A
B+
B
C+
C
D+
D
F

9 grade points
8
7
6
5
4
3
2
0

The Schulich School does not use a percentage scale or prescribe a standard
conversion formula from percentages to letter grades. Conversions within a course
are at the discretion of the instructor.
For more details on the index, grading policy, and grade point average (GPA)
requirements, see the Student Handbook or the Student Services & International
Relations website:
http://www.schulich.yorku.ca/client/schulich/schulich_lp4w_lnd_webstation.nsf/page/
Enrolment+Grades+and+Convocation!OpenDocument#tabs-2
Students are reminded that they must maintain a cumulative GPA of at least 5.0 to
remain in good standing and continue in the program, and to qualify for their
degree. Schulich grading guidelines mandate a section GPA of between 5.5 and
7.0.)

General Academic Policies: Grading, Academic Honesty,

Accommodations and Exams
Academic honesty is fundamental to the integrity of university education and
degree programs, and applies in every course offered at Schulich. Students should
familiarize themselves with York Universitys policy on academic honesty, which
may be found in the Student Handbook and on the Student Services & International
Relations website:
http://www.schulich.yorku.ca/client/schulich/schulich_lp4w_lnd_webstation.nsf/page/
Academic+Honesty!OpenDocument

FINE 4050R pg. 9

Accommodations. For accommodations sought due to exam conflicts, religious
reasons, unavoidable absences or disabilities, please refer to the Student Handbook
or contact Student Services.
For counseling & disability services, contact Student Services or see
http://www.yorku.ca/cds/.

Exams (Absence from)

Mid-term. There is NO mid-term exam for this course.
Final. Within 24 hours of missing a final examination, students must contact the
Director of Student Services at (416) 736-5060 and must also contact their course
instructor. Formal, original documentation regarding the reason for missing the
exam must be submitted to the Director of Student Services (SSB Room W262)
within 48 hours of missing the final exam. Students who miss a final exam due to
illness must have their doctor complete an Attending Physicians Statement.

Communicating with Professor Email Protocol

E-mail me from a York (Schulich [email protected]; or yorku

[email protected]) e-mail account or an email account that you have
registered with the university that I can verify using the classlist utility. I will not
respond to emails sent from an account that I cannot verify is yours.

Use my Schulich e-mail address only

On the subject line, provide your course code (FINE4050) and section (e.g., Sect.
A)

To receive a response to your e-mail, sign your e-mail with your full name

Consolidate all queries into a single e-mail (do not send me 3, 4, 5 or 6 separate
emails)

Provide me with your attempted solution to exercises and problems when

seeking my help.

Without this protocol.. there is a possibility emails may not be dealt

with promptly.

FINE 4050R pg. 10

Quick Reference: Summary of Classes, Activities and Deliverables

Room W136 @ Monday, 14:3017:30
Lectur
e

Date

Topic and Textbook Material

referenced are from SFPL)

Jan 4

Jan 11

Jan 18

Jan 25

Feb 1

Feb 8

Introduction to Financial Planning / The mathematical foundation

Chapters 1,2,3
TVM Review..in-class Qs from Chps 2 & 3 (students present
solutions to class)
The Human Financial Life Cycle Chp 4 why do you bother
saving at all?
The Human Financial Life Cycle (cont) Chp 4
..HW#1 is handed out
HW Assignment #1 is due at the START of class
Credit & Leverage Chp 5
Possible Guest Lecturer Mark Yamada
credit
HW#1 returned & reviewed
Home Ownership Chp 11
Personal Income Taxes Chp 6
Release.outline of Group Project & Team creation
FAMILY DAY --- SSB is closed

Feb
15th
7

Feb 22

Feb 29

10
11

12

(All

textbook

chapters

Insurance & Risk Management Chps 7 & 8

Risk & Return in the Capital Markets Chp 9

..HW# 2 is handed out
Guest
Lecturer
..Mark
Halperninsurance
Mar 7
HW Assignment #2 is due at the START of class
Optimal Investment Strategies Chps 10
Possible Guest Lecturer (industry professional..to be
announced)
Mar 14 Retirement & Pensions Chp 12
Mar 21 Class Presentation Part I all students must attend
(if you miss this class, 1 point will be deducted from your
participation grade)
Mar 28 Class Presentation Part IIall students must attend
(if you miss this class, 1 point will be deducted from your
participation grade)
Apr 6- FINAL EXAM (45%) Covers all course material & is an
20
open book exam
(date & location set by ADAs

FINE 4050R pg. 11

Office)
Final Presentation Write up is due at the start if the Final
Examination
Revised:

Jan 8, 2016