Personal Finance An Integrated Planning Approach

Changes in the financial environment in recent years have made financial planning increasingly difficult and in some respects more unpleasant. The crash of the stock market has left many households devastated and with serious concerns as to whether their long-run plans for retirement or their children's education will ever be realized. The economy has been extremely unstable--going from boom to bust and, hopefully, back to recovery. Congress has enacted a tax bill with sweeping changes in both income and estate taxes. And, to further increase anxiety, Americans witnessed the awful destruction of the World Trade Center and wondered how long the war on terrorism would continue and what it might cost in dollars and in human tragedy. In these times of uncertainty financial planning can take on added importance. With proper financial planning we can reduce, if not eliminate, many of the financial uncertainties we may encounter. Ironically, even though financial planning is now more difficult and perhaps less enjoyable, nevertheless, it is now all the more important. Achieving goals is a relatively easy task when our incomes are growing and our stock portfolios are booming. Unfortunately, it is not as easy in a weak economy and a deflated stock market. In preparing the sixth edition, we felt it was important to address the new reality of financial planning under less than ideal conditions. As a result, this edition encompasses the most significant revisions, which are described next. SIGNIFICANT CHANGES IN THE SIXTH EDITION A Compacted Presentation.The number of chapters has been reduced from 18 to 16, although the total number of pages is about the same. Reviewers indicated that they usually cover about that number of chapters in a term; any more are usually ignored. To achieve the new presentation, we made a number of topic additions, deletions, and consolidations. New Topics The time value of money has been expanded into a whole new chapter (Chapter 2) with considerable emphasis on goal planning. A focus on the building blocks of success is added in Chapter 1. Career planning has been added as an appendix to Chapter 1. How the Tax Relief Act of 2001 affects financial planning is covered in Chapter 4 on taxes and in all other relevant chapters. Credit cards for college students are examined in Chapter 6 on short-term credit management. Consumer protection in the electronic marketplace is discussed in Chapter 7 on consumer durables. Required disclosures under the Federal Consumer Leasing Act are reviewed in Chapter 7. A relatively new type of mutual fund, called the exchange-traded fund, has grown substantially in importance, and it is discussed in detail in Chapter 12 on mutual funds. Topic Deletions and Consolidations The entire treatment of tangible investments (Chapter 14 in the fifth edition) has been eliminated. Reviewers clearly indicated their belief that this topic was either no longer relevant or could not be covered adequately in an introductory course. We agree. Chapter 4 on taxes now contains an expanded discussion of death taxes that was previously contained in a separate chapter on estate planning. The in-depth review of the rule of 78 has been moved to the appendix to Chapter 6. In the chapter on consumer durables (Chapter 7) the discussion of home appliances has been eliminated. It has been replaced by an examination of the electronic marketplace. The topic of stock and bond investment has been consolidated into one chapter. We eliminated the subtopic of technical stock analysis. Chapter 15 contains a combined discussion of life insurance and death estate transfers. Estate planning is no longer discussed in a separate chapter. Estate planning is now more fully integrated with other topics in the text, suchWinger, Bernard R. is the author of 'Personal Finance An Integrated Planning Approach' with ISBN 9780131795303 and ISBN 0131795309.