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Planning Your Financial Future with Harvard Economics Professor Jeffrey Miron
Planning Your Financial Future with Harvard Economics Professor Jeffrey Miron
Group size
5-8 students
Outcome
An essay on the topic of Personal Finance and an accompanying Financial Planner
Tuition
$695
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Planning Your Financial Future with Harvard Economics Professor Jeffrey Miron
Jeffrey Miron is the Senior Lecturer, Director of Undergraduate Studies, and Director of Graduate Studies in the Department of Economics at Harvard University, as well as Director of Economic Studies at the Cato Institute. He has previously served on the faculties of the University of Michigan and Boston University; at the latter, he was Department chairman for six years. Professor Miron has been awarded an Olin Fellowship from the National Bureau of Economic Research and a Sloan Foundation Faculty Research Fellowship. He has been published widely in both refereed journals and opinion outlets such as CNN.com, nytimes.com, and forbes.com. His commentary on economic policy has appeared on CNN, CNBC, MSNBC, NPR, Bloomberg, Fox, BBC, and dozens of other television, radio, and print media around the world.
Week by week curriculum
Week 1
Saving for Retirement: Presents a framework for planning one’s financial future. This lesson adopts highly simplified assumptions (about interest rates, taxes, uncertainty, and so on), which subsequent lessons then adjust. The conclusions provide ballpark estimates of how much one should consume versus save year-by-year over working life and retirement.
Week 2
Taxes and Benefits: Presents a modified framework that incorporates taxes and transfers. The possibilities for consumption during one’s lifetime depend on taxes owed, which reduces the amount of consumption possible, but also on benefits received (Social Security, Medicare, unemployment insurance, and more), which increases the amount of consumption possible. The lesson allows students to make plausible adjustments to their spending and savings plans from Lesson 1.
Week 3
Interest Rates and the Time Value of Money: Adjusts the prior framework to account for interest rates > 0. The lesson first explains that, while interest rates are not zero (as assumed in lesson 1), the presence of taxes on interest income – combined with inflation – makes the r=0 assumption surprisingly accurate. The lesson discusses real versus nominal rates and emphasizes that, when r > 0, the timing of when income, taxes, and consumption occurs can have major implications for one’s lifetime consumption possibilities.
Week 4
Tax-Deferred Saving: Explains how 401(k) and similar plans can substantially improve financial well-being. The crucial effect is that these plans allow one to earn a tax-free rate of return on savings, which substantially increases the possible wealth accumulation. Plus, many employers match employee contributions. Utilizing these savings vehicles is as close to a “free lunch” as exists in the financial planning world.
Week 5
The Costs of Living: Reviews the main components, amounts, and pitfalls of typical consumer expenditure (food, housing, clothing, entertainment, children, education). The data give students a sense of how much income they will want for different lifestyles and warns them about a range of “hidden” costs that can play a surprisingly big role in their financial situations.
Week 6
Investing and Portfolio Allocation: Discusses the main types of investments an individual or household might use for their savings. The main message is that virtually everyone should forget about “beating the market” and instead employ a well-diversified buy-and-hold approach (e.g., broad-based index funds). This feels uninspiring, but all the evidence suggests it is by far the best approach, and far more lucrative than might at first appear.