Economics for Life
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Introduction
Your First Big Job: How to Get It
Insights from Authentic Happiness on Careers
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Wisdom from What Color Is Your Parachute?
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Conduct Informational Interviews
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Cultivate Contacts and Create Networks
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Research Organizations of Interest
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The Inverted Pyramid of Hiring
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Internships
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Resumes
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Cover Letters
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The Job Interview
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Do Not Take the First Offer (Maybe)
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Drug Test
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The Last (and Definitive) Word on Job Searches
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QUIZ: First Job
Quiz
Flourishing in Your Job and Well-Being in Your Life
How to Behave the First Week on the Job
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Gossip at Work
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Insights from Give and Take by Kurzban and Houser
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Promotions
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Women at Work
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Employment Discrimination
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Resources
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Well-Being
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What makes you Happy
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Authentic Happiness
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Bad Habits and How to Change Them
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Savings is One Key to Well-Being
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QUIZ: Flourishing in your job
Quiz
The Importance of Behavioral Economics
Introduction to Behavioral Economics
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Decision Biases and Information Literacy
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Traditional Economic Assumptions About People’s Behavior
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Irrational (biases, heuristics, etc.)
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Biases
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Nudges in Behavioral Economics
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Nudging Yourself
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QUIZ: Behavioral Economics
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What is Money?
The Definition of Money
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The Barter System
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How Money Is Used
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The Amount of Money in the U.S. (M2)
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Who Owns the Money
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The Federal Reserve Bank
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Nominal Money and Real Money
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Foreign Exchange Rates
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How We Get Addicted to Money
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Cryptocurrencies
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A Cashless Society
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Hyperinflation In Zimbabwe
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QUIZ: What is Money
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Analyzing Your Current Financial Situation
Budgets and Saving
Savings Among Americans
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Savings Rates in Select Countries
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China’s Savings Rate
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Influences on the Rate of Savings
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Global Consequences of a Lack of Savings
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How Much You Should Save
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Your Budget
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Why Budgets Do Not Work (most of the time)
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How to Use Behavioral Economics to Create a Workable Budget
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Credit Union Accounts to Facilitate Budgeting
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Establishing Financial Goals
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Reviewing Your Budget
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QUIZ: Budgets & Savings
Quiz
Credit Cards, Auto Loans, and Other Personal Debt
How Much Have Americans Borrowed?
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What Determines Interest Rates
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Daily Treasury Yield Curve Rates (Treasuring Bills and Bonds)
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Your Credit Score
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How to Get and Maintain a Good Credit Score
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Pay for Deletion
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Credit Rating Agencies
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Good and Bad Debt
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Credit Cards Are Addictive
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How to Use Credit Cards Wisely
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Credit Card Providers and the Games They Play
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Auto Loans and Leases
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What to Do if You Fall Behind
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Personal Loans
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Pay off the Debt With the Highest Interest First
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Identity Theft
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The Last Resort: Bankruptcy
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QUIZ: Credit Cards, Loans, & Debt
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Student Loans
Student Loans Are Good Debt
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Student Debt Abuse by Educational Organizations
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The Rules of Student Debt
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Paying Back Student Debt
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Government versus Private Lenders for Student Debt?
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Defaulting on Student Debt
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Problems With Student Debt
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Debt Forgiveness for the Helping Professions
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How Much Debt Should I Take On?
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What Majors Are Worth Taking on Student Debt
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QUIZ: Student Loans
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Understanding the Time Value of Money
The Miracle of Compound Interest
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The Time Value of Money
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Intertemporal Consumption and Savings
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The Future Value of Dollars Received Today
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The Present Value of Dollars Received in the Future
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The Present Value or Future Value of an Annuity
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QUIZ: Understanding the value of money
Quiz
Banks and Financial Institutions
Different Types of Financial Institutions
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Commercial Banks
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Savings Institutions
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Credit Unions
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Finance Companies
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Securities Firms
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Insurance Companies
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Investment Companies
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Financial Conglomerates
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Payday Lenders
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Banks Are Not Your Friends
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Financial Services Offered by Banks and Credit Unions
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Why Banks Want You to Sign Up for Electronic Bill Payment
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Who Regulates Banks and Credit Unions
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How Interest Rates on Deposits and Loans Are Determined
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Supply and Demand of Funds
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Bank Runs and Financial Crises
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QUIZ: Banks and Financial Institutions
Quiz
Buying a Home
Reasons to Rent or Own a Home
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You Are Buying a Location, Not Just a Physical Structure
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Calculate What You Can Afford
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Difficulties of First-Time Home Buyers
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House as Nest or House as Investment
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Rate of Return on Houses as Investments
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Finding a Real Estate Agent
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Home Prices
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The Down Payment and Private Mortgage Insurance
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Regular 30-Year Fixed Mortgage
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FHA Mortgage
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VA Loans
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Where to Get a Mortgage
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Pre-Qualifying for a Mortgage
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Types of Mortgages
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Fannie Mae and Freddie Mac
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The Home Mortgage Crisis of 2006 to 2009 and the Great Recession
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Transaction Costs of Purchasing a Home
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How to Calculate the Monthly Payment
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Tax Consequences of Home Ownership
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Annual Costs of Home Ownership
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Common Mistakes in Taking Out a Mortgage
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When to Refinance
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QUIZ: Buying a Home
Quiz
Insurance: What Do You Need?
Life’s Problems Will Happen to You
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The Concept of Insuring Against Risk
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The Business Model of Insurance Companies
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Health Insurance
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The Main Reason People Go Bankrupt
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Affordable Care Act
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Disability Insurance
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Auto Insurance
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Renter's Insurance
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Homeowner’s Insurance
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Flood Insurance
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Life Insurance
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Umbrella Personal Liability Policy
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QUIZ: Insurance
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Investing Fundamentals
The Nature of Investing
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Risk and Reward
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How Return on Investment is Calculated
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Historical Returns on Various Investments
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The Portfolio Theory of Investing
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Investing in Money Markets
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Investing in Bonds
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Corporate Bonds
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Municipal Bonds
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Federal Agency Bonds
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State Agency Bonds
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Bond Ratings
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Investing in Stocks
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The Current One Year P/E Estimate
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Bubbles and Busts in the Stock Market
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Investing in Commodities
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Investing in Art
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Day Trading
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Investing in Stock Options
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Buying Your Company’s Stock
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Investing in Real Estate
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The Biggest Investment Mistakes
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How to Learn From Investment Mistakes
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QUIZ: Investing Fundamentals
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Investing in Mutual Funds
Mutual Funds
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The Advantage of a Mutual Fund
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For-Profit Mutual Funds
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Nonprofit Mutual Funds
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Load vs. No-Load and Open End Funds vs. Closed End Funds
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Exchange Traded Funds (ETFs)
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Types of Mutual Funds
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Hedge Funds
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Domestic and International Stock Funds
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Diversification Advice
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Social Investing Funds (ESG Funds)
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Non-Fossil Fuel Funds
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Draft Lesson
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QUIZ: Mutual Funds
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Saving for Retirement
Goals for Retirement
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Social Security Payments
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401(k)s and 403(b)s
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Individual Retirement Accounts (IRAs) and Roth IRAs
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Annuities
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Companies to Handle Your 401(k)s or IRAs
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Rolling Over Your Retirement Funds
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Imagining Your Retirement
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QUIZ: Savings for Retirement
Quiz
Fiscal Policy and Monetary Policy-Government Intervention in Your Life
The Business Cycle and Recessions
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Government Tax Policy
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Government Spending
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Government Recession Counteractions
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The Federal Reserve Bank
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Modern Monetary Theory
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Fiat Money
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Taxes Make Fiat Currency (And the Economy) Work
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Debts Do Not Matter
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The Point of Taxes
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Infation
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Obtaining Full Employment
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What We Cannot Do
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China and Trade
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Criticisms
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Conclusion
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QUIZ: Fiscal and Monetary policies
Quiz
Traditionally, insurance companies have sold automobile, homeowners, and health insurance, as well as annuities. However, about a decade ago, insurance companies entered personal wealth management, charging fees typically equal to 1% of the assets under management. Many insurance companies like Lincoln Financial and Prudential have aggressively sought this business since it is risk-free and quite lucrative. We will discuss insurance in more depth in a later chapter.
