Financial Competency Education and Training: Syllabus

Fundamentals of Investing

This session focuses on the basics of investing and finance. The core content includes essential concepts, terms, and definitions critical to making investment decisions and managing an investment portfolio. Issues and topics for discussion include: the time value of money, the importance of compounding, the relationship between risk and return (and its importance in portfolio diversification and management), the difference between debt and equity, and various types of investment vehicles (stocks, bonds, real estate, commodities, etc). This session serves as the building block for the remaining Investment and Portfolio Management sessions during the program.

Investments: Analysis of Stocks Using Internet Tools

In this hands-on session, participants will learn how to sift through information overload and bookmark some of the best websites for stock research and analysis. They will be able to access quickly and easily financial information about public companies and compare stocks or funds so they can select the most appropriate investments for themselves and their team. In addition, they will learn to identify the catalysts that can impact future performance on these investments and get up-to-the-minute data on market activity.

Building an Investment Portfolio

In this session, we put to work what we have learned in the earlier investment sessions. Participants will divide into teams, create an investment policy and simulate the actual investment process, including allocation of assets and selection of specific securities.

Psychology of Money

To help participants better understand their own style in managing money, they are asked - Ever wonder why you spend so much -- or so little? Do the numbers in a checkbook freak you out? When discussing money with your parents or siblings or your partner, do you ever feel uncomfortable? Do arguments ever occur? Do you have a secret fear of going broke? Money has a powerful psychological effect upon people. Exercises and discussions will help participants find out what their hot buttons are.

Fundamentals of Your Financial Strategy

Do you know what you're worth today? Some people take pride in not knowing how much they're worth, believing they have more important things to think about than money. Others like to think that they -- like celebrities and highly-paid athletes -- can afford to hire business managers to keep track of all that stuff. You can't plan where you want to go in your financial life if you don't know where you are. And you can't get there without a strategy. You're like a ship without a rudder. Net worth is the basic scorecard for financial condition. By understanding how it's calculated, and by tracking it over time, you can measure the results of your financial decisions. During this session, participants will learn how to calculate and track their net worth, how to develop a cash flow statement and to create a spending plan - a budget - to ensure that they keep control over their financial life.

Credit

Computers keep an amazing amount of personal information about you -- like how much you charged on your Visa card last month and how often you're late paying your bills. All this information is reduced down to one number -- your credit score -- which lenders use to decide how much money to lend you and how much interest you will pay. Participants will learn the secrets to raising their credit score and saving money on mortgages and other debt. They should never be nervous again when applying for a car or home loan.

Property Law Rules and Prenuptial Agreements

For young adults, the issues of community and separate property ownership and the consequences of divorce are of great importance. What is the best way to own property if you are married, contemplating marriage, or living with a partner in a serious relationship? Should you own it jointly with your partner or keep it in your separate name? The definitive answer may have to come from your lawyer's office, as property ownership carries many complexities that are not always apparent when you're buying a house or opening an investment account. Professional legal advice is often called for as you sort through the various tax and legal ramifications of property ownership. However, knowing the basic forms of property ownership will help each participant understand some of the factors involved and help them avoid mistakes when asked, "What name(s) would you like on the deed to this property (or investment account)?"

Evaluating, Comparing and Hiring Advisors

Financially successful adults utilize and rely on good financial advisors to help them in creating, preserving, and shifting wealth. Many of these advisors are referred by well-intended family or friends, but without much real understanding of the skills, experience, or limitations of the recommended advisor. In this session, participants will learn how to identify, evaluate, differentiate and compare financial advisors, monitor their performances, and understand how they are compensated.

Principles of Inheriting and Transferring Wealth

Each participant will receive, or may have already received, gifts from a parent, grandparent or other family member. Many will experience at least one divorce in their family. It's important to understand the rules related to inheritance, lifetime gifts, spousal rights, and the risks of divorce. There are obvious significant tax and personal consequences involved. Knowing the rules of the game is one of the important responsibilities of wealth -- and why some wealthy people have their lawyers on speed dial.

Communication Skills for Difficult Situations

Money isn't just about dollars and cents. It also touches relationships. Some of these conversations can be very tough...telling a future spouse about the need for a prenuptial agreement or responding to a friend who has asked you for a loan. The important conversations you have with other people -- whether your children or parents, close family members, good friends, or even faceless customer service representatives on the phone -- are far more effective when you are able to communicate clearly and listen well. In this segment, participants will learn some valuable communication skills that will help each of them deal with people regarding money.

The Family Foundation

Family foundations have become a major vehicle for organizing the family's philanthropy, passing its core values to future generations, and building a greater appreciation for its members. The real challenge is how the foundation will function over the next three to five generations. How will the leadership be selected, trained, and replaced? How will the values of the founders be retained and perpetuated? How will the family members learn to work together to build this legacy? These issues are addressed and suggestions are made regarding critical steps that must be taken to assure that this important family enterprise is successful through the generations.

Owning and Enjoying Shared Assets

From the family business to vacation property, family farm and other investment real estate, and even the family foundation, it is likely that participants will share ownership in or responsibilities with siblings and other family members. This workshop will explore the type of challenges shared ownership can create and outline the structure that needs to be formalized to ensure a satisfying governance system and avoid the pitfalls experienced by so many affluent families in diverse family enterprises.

Simulated Investment Training and Investment Coaching

Following the 3 day retreat, participants will continue their experience through a 3 month simulated investment training. During this phase, participants will work together in small teams. Each team invests "cyber dollars" using an Internet-based platform that simulates actual stock market results. It enables the participant to practice what has been learned by implementing an investment strategy, selecting individual securities, and monitoring actual performance without using real dollars. The Internet-based platform automatically updates the simulated account in real time, reporting actual market results. During this phase, the program coach will mentor and guide the participants.

After the simulated training, participants will then participate in an investment club with their team members. Each participant is expected to contribute actual dollars to the club. The minimum investment is $10,000, but there is no cap on the amount to be invested. Each member of the club will participate proportionately in the gains and losses of the club. The program coach will continue to mentor the participants, but will make no actual investment recommendations. These decisions will be made solely by the members and the results will depend on the choices made as well as actual market conditions. This phase of the training provides "skin in the game" but enables each member to learn from the other members and to be mentored in the process.

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