Finance: Plain and Simple: What you Need to Know to Make Better Financial Decisions (Financial Times Series)

Description

Learn the fundamentals of financial language so you can make better financial decisions. This complete and easy-to-digest guide to financial jargon will show you how to understand finance, how to speak financial language, how to make better financial decisions and will show you how financial decision making affects you.   Finance Plain and Simple is for everyone who will need to make financial decisions throughout their lives - be it about pensions, savings, mortgages or investments. This accessible book includes worked examples and case studies which illustrate how terms like AER and cash flow affect individual consumers.   Cover Finance: Plain and Simple Contents Author’s acknowledgements Publisher’s acknowledgements Introduction Part 1 Fundamentals of finance Assets and liabilities Aim of this chapter Assets Deprival value as a way to value assets Asset and liability matching Summary Review questions Time Aim of this chapter The effect of time on financial assets How to do it – compound interest, present value and net present value Risk and the time value of money Inflation Summary Review questions Risk Aim of this chapter What is financial risk? Why risk matters in financial thinking How to think about risk Mistakes in how the finance sector thinks about risk The risk free rate of interest Summary Review questions Who? Whom? Interests and character Aim of this chapter The two central problems of truth in the financial world What are interests and why are they important? Character Asking questions Other people’s interests in your finances Three psychological quirks of character and what they mean for your financial decision making Summary Review questions Options and their value Aim of this chapter What is an option? How do options work? Key terminology in options Puts and calls Options in personal finance Graphical representations of options Writing options – a risky business Options as a substitute for shares Option replication Summary Review questions Pensions Aim of this chapter Pensions – an overview Your key decision: how to save for retirement What sort of person you are and how this may affect pension choice Asset protection, insurance and passing on your pension savings A macroeconomic perspective on pensions and their problems Summary Review questions Financial strategy and how to make financial decisions Aim of this chapter The structure of this chapter Decision making in general The OODA loop and knowing where you are in decision making What is your aim? Top tips for financial and investment decisions Your secret weapon in finance – keeping an investment diary Summary Review questions Part 2 A financial product safari Financial products Introduction Bank accounts, i.e. savings accounts and current accounts Gold and precious metals Annuities Art Collective investment vehicles, including unit trusts, OEICS, investment trusts, SICAVS and exchange-traded funds Unit trusts Index trackers Derivatives Forestry ISAs, PEPs, TESSAs Government bonds and corporate bonds Premium bonds Trusts Shares (also knownas equity) Convertible bonds, preference shares and other debt/equity hybrids Pensions Life insurance Mortgage Loans or credit Credit card Notes Further reading and websites Index