Business Management 418 Section 1

Fall Semester 2003

 

 

Professor:                              Bryan Sudweeks, Ph.D., CFA.

 

Office:                                   663 TNRB Phone: 422-1764

E-mail:   bryan_sudweeks@byu.edu

 

Class:                                    2:00 p.m. to 3:20 p.m., Monday through Thursday, 220 TNRB, Section 1: For Majors Only, Prerequisite: BM 301. 

 

Office Hours:                         Tuesday and Thursday from 9:30 to 11:00 a.m. and other times by appointment.  We will have an optional lab on Friday for those who would like more help.

 

Required Text:                       Arthur J. Keown, Personal Finance: Turning Money into Wealth, Second Edition, Prentice Hall, 2000.  Please note that this is the last semester for using this book, as the 3^rd edition was just published.

 

Note that PowerPoint slides, handouts, readings, etc. can be found at the Marriott School website (www.marriottschool.byu.edu) under Students, Courses, BM418, and Sudweeks.

 

Catalogue Course Description:

 

BM 418 Financial Planning:  Applying financial principles to household decision making, stressing integration between areas.  Income tax and estate planning, retirement, investments, portfolio management and risk management.

 

Extended Course Description:

 

This class provides a hands-on opportunity to understand and apply the key concepts and ideas of financial planning as a precursor to getting your own (and helping others) get their financial houses in order.  We start with a gospel-centered approach to this critical topic.  This adds a critical dimension to our understanding of personal financial management—it gives direction in certain key areas.  We then discuss and evaluate the key areas in financial planning, including careers in the industry.  We give you the opportunity to utilize this information by preparing your own personal financial plan, as well as teaching others specific concepts of this important area.  

 

Course Purpose:

 

The purpose of this course is to help you plan and prepare for not only a successful career, but a successful life as well. There is more to life than your career.  You will be very disappointed in life if you achieve your financial goals at the expense of your personal and spiritual goals.   You will also be disappointed in life if you fail to stewardship your resources to the extent you are not able to accomplish your personal and spiritual goals due to the lack of financial resources.  In this class we will show how the financial decisions you make impact your abilities to achieve your personal goals.

 

Intended Learning Outcomes:

 

While we will cover a large amount of information in this class, my overall objectives for you are fourfold.  Individually, I want you to:

 

1.      Know what you want to accomplish in life.  You must individually set your own personal goals and objectives, and write them down.  These are your future “yes’s” in life so you can say “no” to the daily temptations to spend.

 

2.      Develop and live on a budget.  Budgeting isn’t constraining—it is liberating.  It helps you to spend your resources on what is important to you.  

 

3.      Pay the Lord first, yourself second, and then to save and invest your money wisely. The key is to put your priorities in order—to always pay the Lord first and yourself second.  But paying yourself is not sufficient—you must learn to invest your money wisely.  To do this you must review the basics of investing, invest wisely, and then discipline yourself to set aside and invest a portion of your gross income every month from the day you graduate.

 

4.      Learn to give.  Someone has said:  “We make a living by what we get, but we build a life by what we give.”  If you cannot learn to give when you are poor (which is now), you will never learn to give when you are rich.  Giving is not determined by your money, but by your heart.

 

The rest of the class is just to help you become a wiser financial steward by giving you the tools to help you make better financial decisions in regards to saving, investing, insurance, tax planning, home and auto purchases, etc.  Then once you have developed your own plan, you will have the framework to help you work with others.

 

Since this class is more than a just personal finance class, we need to add to these objectives as many are looking for a possible career in financial planning.  In addition, you will:

 

1. Develop and use a framework for financial planning. This framework, if followed, will help you not only make wise financial decisions and maintain control of your finances, but also give you a framework as you teach others. It’s not what you earn, but what you save, that makes you wealthy.

 

2.  Use this knowledge and information to create your own Personal Financial Plan. The better and more thoughtful your financial plan and the more willing you are to follow it, the more likely you will be to achieve your personal and financial goals once you leave this class. A goal not written down is only a wish.  The purpose of this class is to make wishes come true—but it takes lots of work.  Here we will help you to build your castles in the sky.  But you must then put foundations under them.

 

3.  Teach these principles to your family or friends.  Personal Financial Planning is a key area, not just for students, but also for everyone.  My goal for you is not just for you to learn the material, but for you to learn how to teach the material.  I want this knowledge to extend beyond the classroom. You will hopefully become the financial experts for your future Wards and Stakes.  As such, you will be responsible for part of the teaching in this class, and have the assignment to teach others as well.

 

Once you have a rough idea of your personal and career goals, we will then work to understand financial management and planning as it is applied to important household and personal topics. The general approach will be to help you to be better and more effective stewards over your resources.  To do this we will examine important areas that affect household wealth such as:

 

1)   Measuring financial health

2)   Informed budgeting and debt reduction strategies

3)   Income tax planning

4)   Consumer credit

5)   Acquisition of big-ticket items (home and automobile)

6)   Risk and insurance

7)   Investment strategies and asset allocation (stocks, bonds, annuities, and mutual funds)

8)   Retirement planning, and

9)   Estate planning.

 

While your personal and financial goals will change over time, my purpose is to help you build a framework to help you as you go through your life so that you might attain your personal, career, and lifetime goals. 

 

Learning Activities:

 

Classroom Activities.  We will use a lecture and discussion format, supplemented by guest speakers as the major method of teaching in this class.  This requires all of us to come to class prepared to discuss, request clarification, and answer questions of the assigned reading materials.  My role will be to help you to understand, to expand upon, and put in perspective the assigned readings and class topics.  If you do not understand a specific topic, ask questions.  Unless you ask, I will assume you understand the material.  I have found that students generally get out of this class what they put into it.

 

This approach requires a maturity and commitment on your part to regularly study your assignments and be prepared for class discussion.  You are responsible for everything done in class, as well as for all study assignments.  If you miss a class it is your responsibility to find out from a classmate what we did in class, any changes in schedule, etc. Keep current on your notes as we may find we need either more or less time on certain chapters and the reading assignments may have to be adjusted in class.

 

Groups and Group Presentations.  You will be divided into groups, with three to six individuals in each group.  Your role as a group is twofold.

 

1.      Help teach a specific part of the class.  Each team will help teach an assigned topic, with the goal to make the topic more meaningful to the students. Using your combined experience and talents, your group will present specific examples of what we will be discussing.  Your purpose is not to teach the chapter; rather, to bring the chapter to life.  For example, if the topic is auto insurance, one member of your group could bring his/her auto insurance policy to class, make overheads, and use them to show the key items which would help make the topic relevant to the class.  Another might compare different policies from different insurers over the web; a third might do a quick survey to best auto insurers in the class, etc.  Each group will decide what is important to them.  If your chapter is to be presented on Thursday, you will meet with me Tuesday outside the classroom and tell me what you would like to present and how much time you will need for the upcoming classes.

 

2.      Each group will be required to research and present one 12-minute presentation.  This topic is of your choice relating and can be anything related to financial planning.  It must be approved by me in advance, so we do not have 5 groups with the same topics.  A two-page summary (printed front and back) of the research findings and conclusions should be provided after your presentation to the class.  Then, within the next week, a four-page electronic handout is due to me.  I will be putting these handouts on the web with your names and email addresses on them, so please take the time to make it useful to you and the other students in class. The grading will be based on quality of handout, knowledge of subject, and presentation. 

 

Your Personal Financial Plan.  Each of you will be expected to turn in a personal financial plan (PFP) at the end of the course.  This can be thought of as a summary of the major sections of the course, or as your own personal road map to financial and personal success.  Key to this plan is your own personal and financial goals. Please note that I will not be grading your goals; rather, I will be grading the effort you have put into developing and articulating those goals.

 

The format should include where you are, where you should be, and how you intend to get there for each section.  For example, if the topic is life insurance, you would discuss in detail what life insurance you currently have, what company, limits, riders, etc., what insurance you should have (if it is different from your current policy), and what you plan to do to get adequate life insurance coverage.  Key is what you need to do.

 

The plan should be typed, well organized, include applicable spreadsheets, and be helpful to you as you leave business school. There is no specified length of the financial plan.  A recommended format for the plan is on the net. I strongly encourage you to work on your financial plan with your spouse, parent, or trusted friend. In addition, I strongly encourage you to start working on it now and not put it off until the end of the semester.

 

There will be an optional help section on Friday.  During this lab, we will answer questions, go over the problems in the book, or answer any questions you may have.  Generally, students that have done the problems in the book perform a grade better than those who haven’t.

 

Case Preparation and Participation.  During the term you will have the opportunity to apply the tools you have learned to real personal finance situations (cases). Hopefully, the case analysis will refine your capacity to identify problems, develop recommendations, and defend conclusions. On case discussion days, you are to come to class prepared to address the goals, the process, and the conclusions. In addition, you should be able to answer any explicit questions required in the case. You are encouraged to meet with a group during the analysis process.

 

Service Teaching.  Since my goal is for you to become teachers, as part of this class you will find an opportunity where you can share a part of the things learned in this class with others.  You will develop an outline of what you are to teach, prepare a PowerPoint or other presentation software presentation, and then write up the results of that presentation, documenting what you taught, who you taught it to, and the results of that teaching experience.  This should entail at minimum three hours of service teaching (preferably, in three separate hour-long periods).

 

Grading Procedures:

 

Grades in this course will be based on the following:

 

Attendance and Contribution/Participation.  Consistent, on-time attendance is the mark of a professional.  As such, I expect it from you. While attendance is not something I like to worry about, it does have an impact on your ability to learn the required material and to contribute to the class.  Rarely in the business environment will you have the luxury to decide which meetings you can and cannot attend.  You will be asked at the end of class the number of days you were absent and why, and this will be taken into account in determining the contribution to your grade from attendance (5%).  Your first absence represents .5% of that total, with each additional absence representing 1.0%. 

 

You will not only learn from me, but from each other.  In fact, a significant portion of the learning experience will come from one another.  Therefore, I will be grading you on how well you enhance the learning experiences of each other.  I strongly encourage you to work together and to help each other in this class.   Participation will be determined by your contribution in class and your willingness to work together as a team.  Please note that seating assignments will be made on the third class day to help me as I attempt to learn your names.

 

Assessment Exams.  There will be two exams in this course. The questions will be taken from the text, speakers, and class material. The format of the exams will be workout problems and mini-cases.  Workout problems will be direct and self-explanatory, similar to problems discussed in class and from the homework.  One 3” x 5” card is allowed for the test, and examples are on the net.

 

The mini-cases will give you the opportunity to explain some topic in detail. I expect very detailed, explicit, and thorough answers, as though you were teaching someone else. In essence, my mini-cases are invitations to show off. I will ask a general question for a specific person, for example, how much life insurance the Smith household ought to have, or what type of insurance they should have, and I expect you to tell me all you know about the area of the question. Thus, your answer should be thorough and well organized, rather than a minimal list answer.  Remember that the goal of the exams is to assess how well you have internalized the objectives of this course.

 

Homework.  I have assigned 5 questions from each assignment, which should be handed in as noted in the Class Schedule (late homework is worth 50% of its assigned value).  The purpose of these homework problems are to help you understand the material and also to help prepare for the mid-term and final exams.

 

Quizzes.  We will also begin every other class with a 5-minute quiz concerning the assigned readings. The purpose of the quiz is to encourage you to keep up to date in class and to give me prompt feedback on how well you comprehend the material. Quizzes also give me understanding regarding your preparations and level of understanding. Your lowest quiz score will be dropped. Missed quizzes cannot be made up except for recruiting purposes and major emergencies.  If you will be absent due to recruiting or other purposes, it is your responsibility to come to me and take the quiz on the day before it is scheduled.

 

Grading Criteria.  Grading will be based on the following criteria:

                                 Assessment Exams (2)                                         40%

Attendance and Participation                                  7%

Teaching Experience                                              8%

Quizzes                                                                10%

Homework                                                            5%

Group Presentations                                             10%

Personal Financial Plan                                         20%

        Total                                                          100%

 

I realize that most of you are taking this class because you feel it will be important for you in your later life, not because you have to take it for a degree.  As such, there is a natural self-selection bias in this class, which leads to more “A” students than in a normal class.  Please be aware up-front that while I will give as many good grades as you deserve and as I possibly can, grading will be on a curve.

 

Recommended Study Habits:

 

To do well in this class, I recommend:

 

1.  Understand the objectives for each day.  Start by reading the assigned chapters in the book before class.  Note whether I want you to “skim” or to “read in detail” the chapters, then do just that.  (I am trying to save you time.)  The book is a support—not the roadmap—for the things we are doing in this class. 

 

2.  Take notes in class, and review the PowerPoint’s after class.  Make sure you understand the key points we are discussing.  Since much of what I teach comes from industry experience, those things in the PowerPoint’s are what I consider important.

 

3.  Look ahead to know what is due, and don’t put things off.  Many of assignments require significant effort, and so the sooner you start, the better off you will be.  Others are self-directed assignments, i.e. teaching, and will not be discussed much in class.  Please do not put off the teaching experience or the PFP until the last few weeks.  As an encouragement to help you keep ahead, during the first week of each month you can bring in your PFP and get parts of it graded.

 

4.  Work together as a team as much as possible.  Prepare beforehand your class presentation, what you will teach in class, and even do the problems recommended after each day.  Look up the answers on the net if you are unsure.  These will help you integrate the readings and help you prepare for the quizzes.  Come to the optional labs on Friday if you have additional questions and need hands-on help.

 

5.  Finally, relax, as this is only a class.  Ten years from now you will not remember what we talked about.  But if you will integrate and follow your PFP, you will be well on your way to achieving your personal and financial goals.  If you will do what I ask, put in the necessary time, work, and thought, you will succeed in this class.

 

Living the Honor Code:

 

Your integrity is the most important asset you have.  As such, I will strongly enforce the University’s Honor Code in all areas, be it cheating, dishonesty, or plagiarism in any way, shape or form.  The work you hand in is to be your work only, unless I state otherwise.  Violation of this Code may result in your being dismissed from the University, which will allow someone who is willing to obey the Honor Code to attend.

 

Preventing Sexual Harassment.  Title IX of the Education Amendments of 1972 prohibits sex discrimination against any participant in an educational program or activity that receives federal funds.  The act is intended to eliminate sex discrimination in education.  Title IX covers discrimination in programs, admissions, activities, and student-to-student sexual harassment.  BYU's policy against sexual harassment extends not only to employees of the University but to students as well.  If you encounter unlawful sexual harassment or gender-based discrimination, please talk to your professor; contact the Equal Employment Office at 422-5895 or 367-5689 (24-hours); or contact the Honor Code Office at 422-2847.

 

Students with Disabilities.  Brigham Young University is committed to providing a working and learning atmosphere that reasonably accommodates qualified persons with disabilities.  If you have any disability that may impair your ability to complete this course successfully, please contact the University Accessibility Center (422-2767).  Reasonable academic accommodations are reviewed for all students who have qualified documented disabilities.  Services are coordinated with the student and instructor by the UAC.  If you need assistance or if you feel you have been unlawfully discriminated against on the basis of disability, you may seek resolution through established grievance policy and procedures.  You may contact the Equal Employment Office at 422-5895, D-282 ASB.

 

Students with Cell Phones.  Brigham Young University and I are committed to providing a learning environment for this class.  Distractions, particularly cell phones, impose a cost to the class and to me.  If your cell phone goes off during class, as payment for that cost to the class, you will buy Krispy Krème doughnuts for the entire class.  Please either don’t bring your cell phone to class, or make sure it is turned off during class.

 

Class Schedule and Format:

 

Readings are to be read before coming to class on the specified day, and problems are due the date shown.  Please be aware that during the semester, current matters and specific opportunities may justify changes in the schedule.  If you are not in class when schedule changes occur, it is your responsibility to get this information from other students.  Announcements and changes to the schedule will be made via Blackboard.

 

 

BM 418 Syllabus Fall 2003 28Aug03