Overview
Discussion #1 - Money and You
This discussion is designed to bring the lessons learned in the week down to a personal level and is focused on personal finance.
The Harvard Business Review article “Money Won’t Make Your Life MeaningfulLinks to an external site.” argues that despite the common belief that “money can buy happiness”, it’s a myth. Money is easy to measure, meaning is not. And as such, money must be kept in its proper place. The author recommends that we think in terms of RICHES – relegate, invest, choose, help, earn, and save.
In your initial post, please respond to the following questions:
- Does the author have a point or is he way off base?
- Do you apply any of these principles in your own life? Could you? Should you?
Discussion #2 - Mid-Point Reflection
Take the time to reflect on everything that has transpired so far in the class. Think about where we started – building financial statements to where we are today, the Time Value of Money. Think about Plato’s Allegory of the Cave – is there a way to bring more clarity to the reflected shadows that are financial statements?
Reflection enhances your critical thinking as well as your learning. Be honest...there is no right or wrong answer here.
Assignment - The Time Value of Money
Review the Time Value of Money: Rent versus Buy Decision case from Harvard Business Publishing (HBP) in your Coursepack.
Answer the following questions in a total of 3-5 pages:
- Why do we care about the time value of money?
- What is the key decision that Rebecca needs to make? What facts are relevant?
- How would you estimate the mortgage payments?
- What is the opportunity cost(s) of using the $140,000 in funds required for the down payment?
- What is the required change in monthly payments if Young decides to buy rather than rent?
- What are the qualitative factors that can be considered when making the rent versus buy decision?