FIE432E Personal finance and taxation

• Topics

  The course will address questions such as:

  • Should you invest in bonds, shares, real estate, private equity or a mix thereof?
  • Should you invest part of your wealth abroad?
  • When and how much should you borrow?
  • How much should you save for pension, and your children's education?

  We will develop a formal framework for making optimal private financial decisions. The framework will highlight the importance of personal circumstances and preferences as well as external institutional conditions. The course will have a particular focus on the effect of taxes. We will consider how individuals can use changes in the tax system to their advantage, and what mistakes people tend to make in the real world. This course is specifically targeted at students who want to work in family firms and students who seek to work in sectors that advice individuals and small business owners on their financial decisions. This includes jobs in the banking, insurance, wealth management, accounting and pension sector. More broadly, the personal finance sector touches most other sectors of the economy, directly or indirectly, and involves each of us in our daily lives.

• Learning outcome

  The primary objective of this course is to teach students how to make personal financial decisions and how to advice others on such decisions. The course will address the relationship between corporate and personal taxation and is relevant for business owners as well as employees. At the end of this course students:

  Knowledge

  • Know what determines the optimal asset mix.
  • Know how the tax system impacts financial decisions.
  • Understand how assets are priced in the presence of taxation.

  Skills

  • Are able to explain the interplay between private and public pension schemes.
  • Can discover the most common mistakes individuals make in their financial decisions.
  • Know how to structure a retirement portfolio.
  • Understand how to make borrowing decisions.

  General Competence

  • Have achieved competence in making financial decisions during their lives.
  • Are able to advise others on financial decision making.

• Teaching

  Lectures

• Required prerequisites

  Bachelor mathematics, finance and microeconomics such as MET1, BED3, SAM1/SAM2.

• Credit reduction due to overlap

  100 % credit reduction towards FIE432

• Requirements for course approval

  Mid-term assignment.

  Course approval from FIE432 is valid in FIE432E.

• Assessment

  Written school exam, 4 hours (in English)

• Grading Scale

  A-F

• Literature

  Selected readings on Canvas.