ADV. 16.4 FINANCIAL PLANNING

I. CHOSEN AN INVESTMENT SCHEME

1. INVESTING MONEY

con artist - мошенник

Con artists pretend that they are your friend
Con artists may fail to provide evidence 
Con artists may take advantage of your dreams
Con artists will take an interest in you and your life.
Con artists are likely to dress for success.
Con artists will try and provide an all-encompassing service.
Con artists don't always give you all the details.

brokerage firms 
investment scheme 
stocks 
capital
syndicates
returns - доход
gestation periods - сроки окупаемости
shares
guarantee

go through the roof - to rise to an enormous unexpected degree
be left out in the cold -  to be excluded
take great pains - to try very hard
cash cow - a steady and dependable source of funds or income
ground-floor opportunity - if you get in first you'll have an advantage over others.
go through the motions - to do something in a mechanical manner
vote of confidence - an expression of approval and encouragement

sound good in theory - a good idea, which still might not work 
cut one's losses - stop wasting time or money
short on cash - broke
come rolling in - arrive in large amounts
control the purse strings - decide what to do with money
out of the blue - all of a sudden 

2. EVALUATING THE RESULTS OF AN ACTION

If the salesperson is trying too hard to come across as a friendly, everyday acquaintance, they may be trying to mask their true intentions.

If a salesperson has a flashy office, and makes a great effort to show their knowledge, it would be a good idea to do some more research before committing to any investment.

If you are aware that you lack financial experience, it would be better to consult a reputable financial institution.

If a salesperson promises huge returns, short gestation periods and no risk, it's likely that the investment is a scam.

If a salesperson seems to be taking great personal interest in you, it might be that they are trying to con you into trusting them.

If a salesperson isn't providing full information and reveal how the investment works, you need to find out all the details and ask the salesperson for proof.

an acquaintance - a person one knows slightly, but who is not a close friend 
flashy - ostentatiously attractive or impressive (роскошный, бросающийся в глаза)
committing to the investment - to give your money to a particular plan of action 
reputable - having a good reputation
a scam - a dishonest scheme; a fraud
con - to persuade (someone) to do or believe something,  typically by use of a deception
reveal - make (previously unknown or secret information) known to others (выявить) 

Successful con artists mask their true intentions .

Don't judge a book by its cover .

If you know you are inexperienced, deal with proven financial institutions .

Be aware that a con artist will go to great lengths to get your vote of confidence .

It may sound good in theory. But that's the danger. You need to know all the details .

Just ask yourself: is everything the salesman's pitching backed up with proof ?

3. SOUNDING DECEPTIVE OR HONEST

He's trying to rush the buyer and reassure the buyer at the same time.

He's not just exaggerating (преувеличивает), he's probably lying.

He's stressing his long experience in the business to build up trust

A large profit, quickly, with no risk? He's surely being deceptive (обманщик).

He's being fair, reasonable and honest.

He's lying, while pretending to be truthful and honest.

A good financial advisor will build up trust with clients over time.

Before you invest, I think they need to back up their claims .

An honest broker will spend time outlining potential risks .

He's offering large profits with no risk? He is surely being deceptive  .

I think it's only realistic for us to scale down  expectations .

It's hard to trust someone who is always exaggerating the facts.

II. DISCUSSING INVESTMENTS

1. INVESTMENT SCHEMES 

gamble - risk
regulate - control
small - minute
capital - cash for investment
merger - two companies becoming one
return - profit

What are mutual funds?
Mutual funds are regulated under federal law and assets (активы) are managed communally (совместно) by professional investment advisors for the benefit of shareholders. There are two types of mutual funds: closed-end funds and open-end funds. Closed-end funds have a fixed amount of shares, are issued and traded on a stock market, and are carried out based on a market price which is established by an auction system. Typically, closed-end funds issue all the shares at the outset (с самого начала) and investors can trade the shares. Investors may be subject to a commission charge to buy or sell such funds.

Open-end funds are collective investment schemes which can issue and redeem (выкупать) shares at any point in time. An investor will purchase shares in the fund directly from the fund itself rather than from the existing shareholders.

What are the benefits and drawbacks of mutual funds?
By pooling (объединять) the funds of thousands of investors, mutual funds are beneficial (выгодный) because they provide full-time and high-level professional management that few individual investors can afford to obtain (получать) independently. However, the risk will ultimately be determined by the experience and expertise of the fund manager. So if the fund manager does their job assiduously (истово), the fund will do well. If the fund manager is inexperienced, the fund could perform weakly. That means you still need to perform your own due diligence (старательность) on the fund itself, and on its manager. And you'll still need to monitor the fund’s performance over time. It won't be something you can purchase and then ignore, and still expect to make a profit.

What are hedge funds and their benefits and drawbacks?
Hedge funds are investment funds open to a limited range of professional or wealthy investors. They are permitted by regulators to undertake (принимать на себя) a wider range of investment and trading activities than other investment funds. Similar to mutual funds, investments are reciprocally (взаимно) gathered (собраны). Generally speaking, hedge funds can outpace (опережать) their investment counterparts, in relation to profits because managers have the capability to move capital around rapidly with attractive tax repercussions . However, high-speed turnover strategies means you gamble with the possibility of losing everything at the snap of a finger (по щелчку), should a succession of bad investments arise (возникнуть).

What are the pros and cons of utility stocks (акции муниципальных предприятий) nowadays?

Utility stocks have a history of being the safest option for predictable and higher returns during a recession. Of course they are not immune from (не застрахован от) downturns in a sinking (тонущий) market and prices can swiftly (быстро) inflate (подниматься) and deflate (снижаться) as all stocks can, but they are less likely to fall precipitously (стремительно) under adverse (неблагоприятный) economic conditions. It has been heard through the grapevine (по слухам) that due to possible mergers (слияния) and acquisitions (поглащения) after the recession, interest rates (процентная ставка) are going to rise expediently (целесообразно), and they have a heads up on (имеют преимущество над) pricing power. Most people find investing in the stock market a bit of a toss up (жребий) due to the equal amount of risk and appeal (првлекательность) involved.

What are treasury bonds (казначейский облигации)?
These are issued by the government in order to pay for government projects. The money invested in a treasury bond is basically a loan to the government. These bonds are guaranteed, meaning that they are exceptionally (исключительно) low risk - after all, all the government has to do is simply print more money to pay the interest (проценты).

Are there any drawbacks to treasury bonds?

The rate of return on treasury bonds is relatively minute (минимальна). Most experts claim that treasury bonds are in a bull market (рынок на повышение), which is only true if you are intending on buying long-term as short-term obligations will bring in (вносить) next to nothing in interest.

mutual fund - фонд взаимных инвестиций
closed-end funds  - закрытый инвестиционный фонд
open-end funds - открытый инвестиционный фонд

with the snap of a finger - immediately
through the grapevine - via an informal contact

bull market -  a period when investors are optimistic 

toss up - an unpredictable phenomenon

deflation - a decline in general price levels, often caused by a reduction in the supply of money or credit.

pricing power - if a company doesn't have much of this, then an increase in their prices would lessen (уменьшать) the demand for their products
deferred (отсроченный) purchase - this is when an investor elects a particular time for when they want their returns to be paid out

2. ADVERBS

Beneficially 

Expediently - целесообразно
Profitably - выгодно 

Quickly 

Swiftly - быстро
Rapidly - быстро 

Carefully

Diligently - старательно
Assiduously - старательно 

Mutual funds are managed communally by investment advisors.

If your fund manager doesn't do their job assiduously , you might have to take more responsibility.

The interest rate for treasury bonds is relatively low.

Managers can rapidly move assets around for high-speed turnover.

You should invest your money cautiously and with the least amount of risk.

3. CONSIDERING BENEFITS AND DRAWBACKS

From

Frank Frank_1234@ife.com

Dear Sara,

You are right in saying that they are a relatively safe investment, but in order to make a decent  (приличный) amount of money you are better off (лучше) avoiding short-term obligations because the returns are next to nothing. A 3-month bond (облигации) yields (доходность) virtually (фактически) nothing. Even a 30-year one pays less than 3%.

I advise longer-dated bonds this year due to deflation – they should provide you with a steady source of income if you are willing to invest long term.

All the best,

Frank

Dear Hilary,

You are right in saying that these are among the best this year. Despite the typical risks involved in buying them, I believe investing long term will be beneficial – especially if you are looking for decent and rapid returns. Experts say that due to possible mergers (слияния) and acquisitions (поглащения), you could be looking at as much as 6% return this year.

All the best,

Frank

Dear Joe,

Personally I don’t like the idea of these, or investing communally at all – it is truly risky business. Even though you may have the opportunity to earn more than 35% in a short period of time, you could lose everything even quicker. I don’t think it is a very smart move as they are not regulated by the government. I guess you diligently look elsewhere (в другом месте) to invest your money.

All the best,

Frank

long-term bonds 
short-term ventures
3-month stocks 
hedge funds 

You can win  big, but also lose big.

Benefits 

relatively safe investment
earn more than 35% capital
as much as 6% return 

Drawbacks 

not regulated
short-term obligations
truly risky business
lose everything 
pays less than 3% 


For the majority of investors, trading stocks online gives them the opportunity to act rapidly on stock movement. 
Also, not only does it give them the instant access to prices and charts, but it also allows them to buy and sell stock instantly. 
However, trading stocks online lacks the availability of an investment plan which is usually created by one's investment broker or advisor.    
It would be profitably viable if you combined both the services of a broker or advisor and the online services. 
The downside to this is that you'd have to pay for the creation of the investment plan, but in the long rung you'll have a better chance of avoiding serious trading loss. 

III. GIVING FINANCIAL ADVICE

1. BUDGET ADVICE

1) you shouldn't worry about buying frivolous (пустячный) things sometimes 
2) you should only spend money on the things you really like
3) you should prioritize the things you want to buy 
4) you should try not to splurge 
5) you should splurge only when it's necessary 
6) you should splurge ones in a while 
7) the advisor suggests taking advantage of bargains whenever you see them 
8) the advisor suggests avoiding bargains as they are usually low quality
9) the advisor suggests  being patient when you're looking for a bargain
10) a money diary is a book in which you write down all the things you buy
11) make a list of all your bills and expenses

All of these unexpected expenses have  broken the budget.

I'd recommend avoiding frivolous purchases like ice cream.

Be frugal, and then if you have money left over you can splurge .

My grandmother is veryfrugal and saves as much as she can.

Our goal is to have a budget surplus at the end of the year.

Be careful of your spending. You don't want toextend yourself.

frugal - экономный
splurge - тратить бабло
a budget surplus - профицит
extend - растягивать


2. CLEFT SENTENCES 

Cleft Sentences (расщепленные)

In a cleft sentence, information which could be given in one clause is divided into two parts, each with its own verb. The purpose of a cleft sentence is to emphasize a key point in the sentence. There are different types of cleft sentences, but the most common are below. Notice that the words in bold should be said with emphasis.

It-cleft =

It is our budget that we need to organize.

Wh-cleft =

What we need to organize is our budget.

All-cleft =

All we need to do is organize our budget. Pseudo-cleft = A budget is what we need to organize. Inferential (выведенный) cleft = It’s not that we have to organize the budget right now; it’s just that we have to organize it very soon. Demonstrative cleft = That is what we need to organize. In the last sentence, that refers to the budget. It was unexpected expenses that broke the budget. What we have to do is reduce spending. A lack of planning is why you extended yourself. A serious spending plan is what we need to have in place. All you need to do is work out debt payments. What you have to do is make your payments manageable. The best thing is to consolidate the debt into one sum. The next thing is to identify any assets you could sell. What you should do is consider selling some valuables. What you need to do is identify the debts you can pay.

IV. APPLYING FOR A HOME LOAN 

1. LEARNING FROM THE DEPRESSION

crash - разбиваться
depression - депрессия
bank runs - паническое изъятие банковских вкладов
soared - взлетел
munitions - снаряжение
counter-intuitive - парадоксальный
severe - серьезный

Sometimes, in uncertain economic times, the value of gold will soar.

A very severe economic recession is called a depression .

The stock market crash on Black Tuesday was the beginning of the Great Depression.

Something that goes against what you might ordinarily think is counter- intuitive .

Factories producing munitions helped the American economy recover.

The bad financial news led to a panic and a bank run .

2. SUPPORTING DOCUMENTS

How to prepare for a home loan application:

When applying for a home loan, the lender needs to establish that the factual claims the person applying for the loan is making are genuine, and these details must be backed up (подтверждены) with supporting documents. As a result, all lenders require proof of identity, age, residence, income and employment.

The pre-requisites, however, differ from bank to bank; these are some of the standard documents that are accepted: passport, birth certificate, driver’s licence, credit card, Medicare card, utility bill (счета за коммуналку), telephone account, last three years' tax returns, last three months' pay slips (справка 2НДФЛ), letter from employer outlining (обрисовывающий) nature and length of position, last six months’ bank statements which reflect your income details, superannuation (пенсия) statement, etc. Depending on the borrower’s situation only one document may be required for each form of proof, i.e. identity, income, employment and savings.

Bear in mind that bank statements are examined for many differing factors that may be relevant to the borrower’s ability to make repayments, such as the level of activity and average bank balance. Lenders will also scrutinize (изучать) check returns and/or bounces (неоплаты/отказы по чеку). A small fee debited (списана) indicates that the check issued by the borrower was returned by the bank. Accumulative (совокупный) returns can have a significantly negative impact on the bank’s decision to authorize the loan. Likewise, if checks deposited by the borrower are returned by the issuer's bank, they will be visible in your bank statement as well.

Once all official documentation is organized, it’s time to consider what kinds of loan features are appropriate for your lifestyle. If you prefer security and consistent repayments over a certain period, then a fixed loan may be the most suited to you. If you want to make additional repayments, then a variable rate could be more appropriate. If you have disposable income (чистый доход), then a 100 per cent offset account (офсетный/зачетный счет) could be the answer.

a driver's license establishes proof of identity 
tax returns establish proof of income 
a letter from your manager establish proof of employment 
pay slips establish proof of income 
a passport establishes proof of nationality 
a birth certificate establishes proof of birthplace 
a bank statement establishes proof of savings 
travel insurance 
tourist visa
credit card 
social security card 
superannuation statement 
proof of residency 
child's certificate of immunization (карта прививок) 
work contract 
degree/diploma or equivalent 


3. FILLING OUT AN APPLICATION FORM

Filling Out a Form

Always know what is going to be asked before filling out any kind of application form. Before you begin to fill in the blanks make sure you have read the entire (всю) form carefully and have all the necessary information at hand.

Always fill in the blanks accurately and neatly (аккуратно), using a reliable black or blue ink pen – never pencil.

Read the instructions carefully as you may be asked to fill out the form in capital or block letters or to mark the applicable (применимый) boxes with a cross.

Answers should be brief (краткий) and consistent (последовательный). Make sure you answer every question. If a question does not apply to you, write ‘n/a’ (not applicable).

Always make sure the information you write on the application form matches the information on the supporting documents. Double-check all factual information for accuracy (точность).

Always be prepared to provide additional information when submitting an application form and have all the necessary documents at hand.

Occupation - род занятий