1. Personal Finance
Benjamin Graham

2. Personal finance is emotionally loaded
Spending decisions are often made jointly
Without discussing the spending part
Learn to talk about money
With your friends
With your romantic partners
With your siblings and parents
Lecture 15: Personal Finance Benjamin Graham

3. Lecture 15: Personal Finance Benjamin Graham
Managing Spending
Humans are creatures of habit and ritual
Replace one habit with another (cheaper) habit/ritual
Lecture 15: Personal Finance Benjamin Graham

4. Invest in Your Own Career (Strategically)
Use your access to debt strategically
(Great) unpaid internships
Forgoing side jobs at critical career junctures
Childcare
Lecture 15: Personal Finance Benjamin Graham

5. Negotiate Your Starting Salary
Men are more likely to negotiate their starting salary than women
Do your homework
What is a reasonable salary for this position?
Ask but don’t demand
Ask for more than what you want
Even if the answer is no, it wasn’t a mistake to negotiate
Lecture 15: Personal Finance Benjamin Graham

6. Lecture 15: Personal Finance Benjamin Graham
When to buy insurance
To reduce volatility
To cover catastrophic losses
Life insurance BEFORE you have kids
On average, insurers make money
So (usually) avoid insurance on small items like phones
Lecture 15: Personal Finance Benjamin Graham

7. Two types of debt to avoid
Payday loans
Monumentally high interest rates (e.g. 400%)
Credit card debt:
Extremely high interest rates (15-30%)
Lecture 15: Personal Finance Benjamin Graham

8. Debt to shop carefully for
Car loans
0% financing almost always means paying a higher price for the car
Banks often offer better rates than the dealership
Lecture 15: Personal Finance Benjamin Graham

9. Lecture 15: Personal Finance Benjamin Graham
Student Debt
Student Debt
Subsidized = often 2-3% interest rate
Pay this back slowly
Unsubsidized 6-9% interest rate
(Probably) pay this back before any non-matched retirement savings
Bankruptcy does not get you out of student debt
Lecture 15: Personal Finance Benjamin Graham

10. Lecture 15: Personal Finance Benjamin Graham
Investments
1. Max out your 401k or employer-sponsored retirement contributions
2. Buy cheap, diversified mutual funds (index funds)
Downside losses hurt more than upside gains help
FOMO is a real thing
3. Never buy or sell an individual security
6. Maximize tax-advantaged savings vehicles like IRAs and 529s
8. Make your financial advisor commit to a fiduciary standard
Lecture 15: Personal Finance Benjamin Graham

11. Is a graduate degree a good investment?
Yes, if:
1. It is free (i.e. good Ph.D. programs)
2. You know the job you can get with the degree that you can’t get without it, and you are confident you want that job
3. You need a student visa to stay in the US
Lecture 15: Personal Finance Benjamin Graham

12. Lecture 15: Personal Finance Benjamin Graham
When to buy a first home
Treat your home mortgage as rent replacement, not a speculative investment
Housing isn’t that volatile, but home buyers are highly leveraged
Interest rates are around 4.25%
But, you need a down payment…
Lecture 15: Personal Finance Benjamin Graham

13. The Complete Finance Notecard
1. Max out your 401k or employer-sponsored retirement contributions
2. Buy inexpensive, well-diversified mutual funds
3. Never buy or sell an individual security
4. Save 20% of your money
5. Pay your credit card balance in full every month
6. Maximize tax-advantaged savings vehicles like IRAs and 529s
7. Pay attention to fees & avoid actively managed funds
8. Make your financial advisor commit to a fiduciary standard
9. Promote social insurance programs to help people when things go wrong
Lecture 15: Personal Finance Benjamin Graham