Name:__Anjor Khadilkar___________________

Date:_______________
Personal Economic Freedom (or Security) Assignment
I call this Unit Personal Economic Freedom due to the historic definition of
economics: denoting the science of household management. Today, this topic is
more commonly called Personal Finance. Why do I prefer personal economic
freedom over personal finance? Because personal financial emphasizes money
only, while personal economic freedom deals with managing your limited resources
and making the best decisions given the choices and costs available to ensure YOUR
greatest happiness.

Immediate Future:

List & explain below the 10 advices presented for

incoming freshmen:
http://www.forbes.com/sites/robertfarrington/2014/08/27/the-10-best-money-tipsfor-college-freshmen/#3c66627a65e6

1. Find A Bank That Works With Your College Situation

So that college students start learning about banks and loans and figure out which bank works
best for them and are in charge of their finances.
2. Keep Your Personal Finances Mobile
So that millennials will take advantage of online apps that will help them budget and save. The
article says that we have no excuse not to be good about our banking and the like because we
have our phones that help take care of things.
3. Credit Is Important, So Use It Responsibly
The article says that credit is important, so not to fall into traps to open a credit card just because
some vendor is offering free pizza or a t-shirt, which makes sense.
4. Be Smart About Recurring Expenses Like Books
The article advises that you shouldnt buy a textbook unless you absolutely cannot find it
anywhere else - but making sure to look everywhere first, like the library, on Amazon, eBay, and
the college bookstore.
5. Ditch The Car And Use Public Transportation Or Ride Sharing
As someone going to college in New York City, I can get behind this. The article says that this
will not only help save money, but give you new experiences and help you meet people (or cute
dogs on the subway).

6. Dont Take Out More Student Loans Than You Need

The article advises that students should be proactive about their financial situation even before
college. They should be researching scholarships and grants they could possibly get and making
sure that they know what kind of loan they have (subsidized, unsubsidized).
7. Learn To Start Saving A Little Each Month
The article advises that an easy trick to saving is to simply deposit all of your loose change into a
savings account (one without a card so you wont be tempted to spend all your money) and just
deposit change and have some small savings put aside.
8. Get A Job, But A Flexible One
On-campus jobs are a great source of income and spending money, and, the article says that there
are jobs out there that let you study while doing them, such as swiping kids into the lunchroom
or being the RA.
9. Take The Maximum Classes Possible To Minimize Time In College
This piece of advice is essentially to hustle. Basically, college is expensive, so in order to help
that, make sure youre taking as many classes as you can and work your butt off because the less
time you spend in college, the less expensive it is.
10. Remember Why Youre In College Networking For Your Future Career
Networking is very important, and this article advises leaving college with 1,000 LinkedIn
connections. Essentially, connections are very, very important and can be even more useful than
your GPA or anything else to get a job.

IN YOUR WORDS: Describe how social media can help or hurt your future
job prospects. Use specific social media websites and advice to yourself in
your answer?
It can be detrimental to your future job prospects if you portray yourself
negatively on social media. For example; if you post photos of yourself drinking
underage or using profanity or vulgar language or hand gestures on Instagram or
Twitter or Facebook, it comes across as unprofessional and most likely, potential
employers will be wrinkle their nose and turn to the next applicant. For this, you
have to be not only careful about what you post online, but you also have to make
sure that you are private on your social media accounts if you think that you need
that extra precaution.

Your Future Financial Freedom

Your goal should be personal financial freedom. But STOP! First you must
know thyself. People often confuse economic success (financial freedom) with
making money and investing it wisely. I would rather you think of financial freedom
as you peacefully living who you are, thus fulfilling your life-style.

Framing in your-style Put the number in the points

column that best fits you.
Just a Few
Categories

You Are

Points

Home

5 - Expensive and/or Big City

3 - Modestly Expensive and/or small
city
1 - On the cheap and/or Rural town

Daily
transportation

7
5
3
1

- Luxury New Car

- Modest New Car
-- Used Car
- Walk, Bike, Public Transit

Vacation

7
5
3
1

Groceries

4 - Trader Joes
2 - Tops
1 - Aldis

Night Out

5 - Luxury Dinner, Expensive Tickets

2 - Chain Restaurant, Movie
1 - Walk in the park or along the
water

Hobbies

7 - Everything
5 - Luxury: Yachting, Golf Club
3 - Modest: professional sports,
theatre
1 - At home: Reading, art, carpentry,
etc.

1 and 3

Family

6 3+ kids
4 2 kids
2 1 kid

Long Distance Travel

Florida direct flight
Close to home
Camping

1 and 5
(depends on
if I move out
of the city)
7

Wegmans?
3ish?

Either 0 or
3, haha (or
like five

0 NO kids
Total Points Between 6 & 43 (higher the point total,
the more costly your lifestyle)

dogs)
22

Explain what will happen to the cost of your life-style as time goes by?
Get more expensive? I dunno; it depends on if I move out of the city because
Im doing my undergrad in NYC and then Im planning on doing my masters in
London and then eventually living there so if I at any point decide to move out of
the city, my cost of living will obviously go down, but at this point, I really dont plan
on ever doing that.

Based on your lifestyle expectation, explain what your

individual/household income expectation must be:

Enough to support myself in London, I suppose. The average salary of

someone working in London is 48,023, but as a struggling-artist type, I suppose I can
just survive off of Ramen and biscuits.

Your Future: Financial Advice

Read the following article and list below the 9 rules on the index card for
better financial living
http://www.npr.org/sections/alltechconsidered/2016/01/08/462250239/when-anindex-card-of-financial-tips-isnt-enough-this-book-is-there

1.
2.
3.
4.
5.
6.
7.
8.
9.

Max your 401(k) or equivalent employee contribution.

Buy inexpensive, well-diversified funds such as Vanguard Target 20XX funds.
Never buy or sell an individual security.
Save 20% of your money.
Pay your credit card balance in full every month.
Maximize tax-advantaged savings vehicles like Roth, SEP, and 529 accounts.
Pay attention to fees; avoid actively managed funds.
Make financial advisor commit to a fiduciary standard.
Promote social insurance programs to help people when things go wrong.

Research the rest of this project and cite your source (link
is fine)

Understanding from the index card: define each in a way YOU will
remember them.
Employee Contribution Plan

A company-sponsored retirement plan where employees may elect to have a portion of each
paycheck deposited into a retirement account owned by the employee and held in his or her
name. Employee contribution plans are subject to annual contribution limits imposed by the
federal government, but often have tax benefits such as deferred taxes on investment gains and
the ability to contribute pre-tax income. Employees always own 100% of the contributions they
make. Some companies match employee contributions up to a specified limit, but the employee
may not own the entire matching contribution until it fully vests after several years of continued
employment.
http://www.investopedia.com/terms/e/employeecontributionplan.asp

Well-diversified Mutual Funds

A diversified fund contrasts with specialized or focused funds, such as sectorfunds, which focus
on stocks in specific sectors such as biotechnology, pharmaceuticals or utilities, or in particular
regions such as Asia or Europe.
http://www.investopedia.com/terms/d/diversifiedfund.asp
Individual security (Use the financial context for this)

A security is a financial instrument that represents an ownership position in a publicly-traded

corporation (stock), a creditor relationship with governmental body or a corporation (bond), or
rights to ownership as represented by an option. A security is a fungible, negotiable financial
instrument that represents some type of financial value. The company or entity that issues the
security is known as the issuer.
http://www.investopedia.com/terms/s/security.asp

Taxed Advantaged Savings Vehicles

Any type of investment, account or plan that is either exempt from taxation, tax-deferred or
offers other types of tax benefits. Examples of Tax-Advantaged investments are municipal
bonds,partnerships, UITs and annuities. Tax-advantaged plans include IRAs and qualified plans.
Actively Managed Funds
Active management is the use of a human element, such as a single manager, co-managers
or a team of managers, to actively manage a fund's portfolio. Active managers rely on analytical
research, forecasts, and their own judgment and experience in making investment decisions on
what securities to buy, hold and sell.

Fiduciary Standard

The act is pretty specific in defining what a fiduciary means, and it stipulates that an advisor
must place his or her interests below that of the client. It consists of a duty of loyalty and care,
and simply means that the advisor must act in the best interest of his or her client.
http://www.investopedia.com/articles/professionaleducation/11/suitabilityfiduciary-standards.asp

Social Insurance Programs

Social insurance is a set of insurance programs that are administered by a government. Just
like private sector insurance, they provide benefits upon the occurrence of certain insured
events. Ex) OASDI, SSDI, Medicare, etc.
http://study.com/academy/lesson/social-insurance-programs-definition-types-examples.html

DEBT:
Describe the difference between good and bad debt?

Good debt helps you generate income and increases your net worth (ex. College, small
business, real estate, investing). Bad debt includes all debts incurred to purchase depreciating
assets (ex. Cars, clothes and consumables, and credit cards).
http://www.investopedia.com/articles/pf/12/good-debt-bad-debt.asp

How do you create a good credit history and why do you want one?
It makes it easier to get loans, and to establish a good credit history you should pay
off charges, pay them on time, keep you total charges within the credit limit, and
regularly read your credit report.
List the current interest rates for the following loans (be specific):

Interest
Rate

Type

Source

4.3%

Car Loan

Bank Rate

4.29%

College Loan

3.5%

Home
Mortgage

Wells Fargo (its cheaper to

buy a house than go to
college)

Credit Card

Bank Rate

11.06%

Student Aid

List the following type of loans above in order from Good Debt to Bad
Debt.
College Loan, Home Mortgage, Car Loan, Credit Card

INCOME:
Define and clearly describe the following types of income:
1. Active
Income for which services are performed. Ex) wages, tips, salaries, and commision
http://www.investopedia.com/terms/a/activeincome.asp
1. Portfolio
Income from investments, dividends, interest, and capital gains.
http://www.investopedia.com/terms/p/portfolioincome.asp
1. Passive Income
Earnings an individual derives from a rental property, limited partnership or other enterprise in
which he or she is not materially involved.
http://www.investopedia.com/terms/p/passiveincome.asp
Active Income: Outline 3 jobs of your interest and the current income
expected for each
1. Job Title: Actor
Income
$43,237

Additional Job Benefits

Getting to do what I love

Source
Pay Scale

1. Job Title: Diplomat

Income

Additional Job Benefits

Source

$43,836 (this is FP-1 though; I can work up) l Travel? I would also love this job l Shmoop
1. Job Title: Ambassador (although technically you work up to Ambassador
from Diplomat)
Income

Additional Job Benefits

$119,554 - $179,700 Making a difference; travel

Source
Work.Chron

Portfolio Income:
List the current interest rates for the following (be specific):

Interest
Rate

Type

Source

0.06%
APY

Savings Account

CNN Money

.05%

Certificate of
Deposit

Bank of America

1%

Money Market
Account

Bank Rate

.10%

Government
Savings Bond

Treasury Direct

Define Stock and describe different stock classifications:

The capital raised by a business or corporation through the issue and subscription of shares.
Blue-chip stocks are from the biggest companies in the country and provide stable stock prices,
but their returns trail behind smaller companies. Income stocks are the stocks from large
companies that pay big dividends (ex. Energy and utility companies). Value stocks and the
under-priced stocks in the market. Growth stocks are usually technology centered stocks of
companies with profits that are increasing quickly.
http://cashcowcouple.com/investing/different-types-of-stocks-classifications/
Identify the difference between:
Managed Fund

Index Fund

an investment fund run on behalf of

an investor by an agent (typically an
insurance company).

An index fund is a type of mutual fund

with a portfolio constructed to match or
track the components of a market index,
such as the Standard & Poor's 500Index
(S&P 500). An index mutual fund is said
to provide broad market exposure, low
operating expenses and low portfolio
turnover.

Source: Google Dictionary

Source: Investopedia

Describe a way you could earn portfolio income other than one of the
ways above and whether this way interests you or not:
Buy a house and then rent it out and collect rent. Personally, I am not terribly
interested because that requires a lot of upkeep and maintenance.

Passive Income:
Describe a way you could earn passive income other than and whether
this way interests you or not:
Right a jingle (or if were dreaming big here, a one-hit wonder, or even the theme
song for a long-running TV show that makes it all the way to Netflix) and then sit
back in your mansion and collect the royalties youd get paid for having it play all
the time (Im looking at you, Friends theme song). This way isnt too terrible at all
and Id be interested in it, sure.

Income versus Wealth

Define Wealth:

Wealth measures the value of all the assets of worth owned by a person, community,
company or country. Wealth is determined by taking the total market value of all physical
and intangible assets owned, then subtracting all debts. Essentially, wealth is the
accumulation of resources. Specific people, organizations and nations are said to be
wealthy when they are able to accumulate many valuable resources or goods.
Investopedia
Clearly explain the difference between income and wealth?

I like to think of income as the amount of money someone receives on a regular

basis, while wealth is the length of time that person (or family) could maintain their
current lifestyle without receiving compensation for performing additional work.

http://www.moneycrashers.com/wealth-and-incomedifference/
Conclusion: IN YOUR OWN WORDS, what is the best strategy to take in
the next 1-6 years to ensure your future economic freedom?
I need to work my butt off the next four years doing my undergrad so that I can get into the best
acting schools (and schools otherwise) in London (and the U.K. in general) so that will ensure
that I will be able to make a living (and dare I saw even be successful) as an actor. Or, if that
doesnt work out, get into another good school and do something in the Social Sciences, be it a
diplomat or well, anything that pays I guess.