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Financial planning (Concepts of Financial Planning and Ethics (Fiduciary…

- - - - 2.Wealth Accumulation
        
        3.Wealth Preservation
        
        4.Wealth Distribution
  - - - 2.Gathering client data and determining goals
        
        3.Analyzing and evaluating the client's financial status
        
        4.Developing and presenting the financial plan
        
        5.Implementing the financial plan
        
        6.Monitoring the financial plan
  - - - Objectivity
        
        Competence (能力)
        
        Fairness (公正；合理性)
        
        Confidentiality (保密)
        
        Professionalism (專業精神)
        
        Diligence (勤奮)
- - - - • The current value of future cash flows discounted at the appropriate discount rate
        • Value at t=0 on a time line
    - - • The amount of investment is worth after one or more periods
        • ''Later'' money on a time line
    - - • Discount rate
        • Cost of capital
        • Opportunity cost of capital
        • Required return
        • Terminology depends on usage
      - Effective annual rate (EAR)
        
        The interest rate expressed as if it were compounded once per year
        
        Used to compare two alternative investments with different compounding periods
      - Annual percentage rate (APR)
        
        The annual rate quoted by law
        
        APR = periodic rate x number of periods per year
        
        Periodic rate = APR / periods per year
    - - Interest earned only on the original principal
    - - • Interest earned on principal and on interest received
        • ''Interest on interest'' - interest earned on reinvestment of previous interest payments
    - - Annuity
        
        finite series of equal payments that occur at regular intervals
        
        Ordinary annuity
        
        The first payment occurs at the end of the period
        
        Annuity due
        
        The first payment occurs at the beginning of the period
      - Perpetuity
        
        infinite series of equal payments