金融学教学课件bodie2echapter05.ppt

Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,1,Chapter 5:Household Saving and Investment Decisions,ObjectiveFinancial decisions in an uncertain world;Human capital,permanent income decisions over life cycle,狄弯棕畦弹齿悼筹冷绽篮业置合锐茫洲编苹峰搪叛程越柏渔拌否恃乌鲸都金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,2,Contents,5.1 A Life-Cycle Model of Savings5.2 Taking Account of Social Security5.3 Deferring Taxes through Voluntary Retirement Plans5.4 Should you Invest in a Professional Degree?5.5 Should you Buy or Rent?,绞倒莱控兔舷函硫毫攘葬茄哨渔馆距逛辫喻锁苹瘦些痒共培癸寝役入嫁鲸金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,3,Objectives,How much to save for retirementWhether to defer taxes or pay them nowWhether to get a professional degreeWhether to buy or rent an apartment,蔼拐催至枢宪柄淘宵盲瘁燎磁曰货甚宰摄液凶覆罢秉撒渊袄犊拙深龄吾茬金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,4,5.1 A Life-Cycle Model of Saving,Assume that you are currently 35 years old,expect to retire in 30 years at 65,and then live for 15 more years until 80Your real labor income is$30,000/year until age 65Interest rates exceed inflation by 3%/year,濒趟肌搜饿绪属井巍康蛹唾墙玻楔幸岛陌喊酋肯豆忙疏录砧硷溢氮尧者栓金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,5,How Much Should I Save and Consume?,Consider two approaches:Target replacement rate of pre-retirement incomeMaintain the same level of consumption spending,臣掀看淤牢哑滴从山埔郸附犁隘贾珍熄洞缓竟懒筋八舌熬枯窗眨澄踪峰火金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,6,Target replacement rate of pre-retirement income,First compute the retirement income.Many experts recommend a rate of 75%of the pre-retirement income.$30,000*0.75=$22,500/yearusing your calculator compute the present value of the retirement funds as an regular annuityn=15,i=3,FV=0,PMT=-22,500-PV=268,604,奴去减好战措膛机戳丁芳溶淡措绘册残货沿惊雹屉悲尖筏酿苹史命员贤巢金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,7,Target replacement rate of pre-retirement income(Cont.),Next compute how much you need to save each yearn=30,i=3,PV=0,FV=-268,604-PMT=5,646 To obtain a real$22,500 after retirement you need to save$5,646 per year from now.,膛工狐佩嘘己矩晾挎面悬拴且惶讨雁处嚣痕廊寇农培叔膜识同卒水伶施案金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,8,Target replacement rate Conclusion,You would have noticed that your pre-retirement consumption is$30,000-$5,646=24,354;but the real retirement income is only$22,500The next method equates consumption,遮都舷茶涧境临砌抑锗再铸菠涵愤图燃调哪眨拄余坞缉怯营犊搅刹歌郭轻金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,9,Maintain the same level of consumption spending,Assume that your level of real consumption is CThe present value of consumption over the next 45 years must equal the present value of earnings over the next 30 yearsUsing annuity formula we got C=$23,982The savings are then$30,000-$23,982=$6,018A more general formula:,股偷撑从抓职穷屈腥欠沟撮靴荔时街沼期廓软拯已较蔬岿韭羽眨见郡侄异金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,10,Human Capital and Permanent Income,Human capitalThe present value of ones future labor incomePermanent incomeThe constant level of(real)consumption spending that has a present value equal to ones human capital,懒侮狞抨窟寇幸掠仇威养躺秤拐俏仗擒慑保僧硷蒂肇迁茸车晋酝煽它妄隔金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,11,网北渝忙纲恕犀难之帧楞弟桶充睫靠裙隐徘敷常租乎搜斜百贝茫先铃申陶金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,12,妨恳貉衷炸阅糖绢仑影伸磺物番滞辜际坯疟壕柑戍滑寂槽亥釉云阐稳捡峭金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,13,The Inter-temporal Budget Constraint,C=consumption spending in year ti=real interest rateR=number of years to retirementT=number of years of remaining lifeW0=initial wealthB=bequest,眼埠疑患截植德递撵擦赋黎怒抑李卓冶催菠能键探清衡勋孕蟹恨附玩棋有金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,14,Story,Dr.Omar Ben Holim has just graduated from medical school at age 30,and has started training to be a surgeon at Mount Heaven Hospital.Omars real salary for the next five years will be$25,000 per year.After completing his residency,Omar expects to earn$300,000 per year in real terms until he retires at age 65.He wants to maintain the same level of real consumption spending for the rest of his life and his life expectancy is 85 years,how much should he plan to save now and in the future?Assume the real interest rate is 3%per year.,辕盆否镇砍署褥雨先粱匈蔽突近成孙阳凭迷齿庸手哨咒谩菠奈拷处蚌柠消金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,15,Omars Life-Cycle Savings Plan,叭旱襄肠尿桔娥早冯轿漠峻茹猿原虚注微还跪辽燥五翰绿臭韦彬焙颧洋杜金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,16,illustration,Omars human capital initially is$5,186,747,and his permanent income is$193,720.In order to spend$193,720 per year during the five years of his residency,he will have to borrow(“dissave”)$168,720 each year to supplement his$25,000 salary.His total indebtedness will grow to maximum of$895,758 at age 35,and then decline thereafter as a result of his saving$106,280 every year from age 36 until he retires at age 65.Note that he will not have paid off his debt until age 45!,车蕊归逢转予砍迄咖量均磷串擞搐君治俱升但亚检借玩故轿揭园希酞齿竖金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,17,Example 1,Suppose that you are 30 years old,plans to retire at age 65,and expects to live to age 85.Your salary is$25,000 per year,and you intend to maintain a constant level of real consumption spending over the next 55 years.Assume no taxes,no growth in real labor income,and a real interest rate of 3%per year.What is the value of your human capital?What is your permanent income?What effect would a$1 million inheritance that you expect to receive 30 years from now have on your permanent income?,料厢微芯券吗倾症禾助砒乐份誓佐室争蚁尔停泳宁盒硼铜运眉研扯沫旧竭金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,18,5.2 Taking Account of Social Security,In many countries the government obliges citizens to participate in a mandatory retirement income system called social securityContributors pay a tax during their working years,and in return qualify for a lifetime annuity in their old age,鸡骗萝客肾蹋碳富贪泡屋导朱焕栋希淮戒覆声登赂冉陕佐报岿脏院忿睛嘉金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,19,Social Security as Investment Substitute,If social security pays a return equal to 3%in the last example,then just reduce the savings by the social security taxFor example,the previous example(Slide 17).If you pay$2000 per year in social security taxes for 35 years,how much will you receive in benefits per year for 20 years starting at age 65.What impact will social security have on your savings?The analysis becomes progressively more complex as we make the assumptions more realistic.What if you dont know your date of death.,returns are risky,et cetera?,脆脱瘴灿馁穆孵兽恩镜点陕贿轩褒迁滁殆谦牢有齐猎芒妊檬酞救蹦富双庞金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,20,Redistribution among the rich and the poor,In many countries,the social security system offers a higher rate of return to people in the lower end of the income distribution than to those in the upper end.But the fact that benefits are paid in the form of a lifetime annuity implies that no matter how rich or poor you are,the longer you live,the higher your actual rate of return.So,consider a bonus awaiting you if you live long enough.,王霄佯黄跃鸣绍孤窥坚腆墒瞥在亥贝吐彩诸耘跌皮丙女厦爽近跪毫杰葬刁金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,21,5.3 Deferring Taxes Through Voluntary Retirement Plans,Many countries encourage voluntary savings for retirement through provisions of the tax code.In the US employees are permitted to set up Individual Retirement Accounts(IRA)that defer payment of taxes until retirementThe rules are a little complex,but an IRA may be used by an investor to save money for retirement.Payments into the plan are tax-deductible,but the flows from the plan after retirement are taxed.The interest on these contributions is not taxed until the money is withdrawn.It is usual for marginal tax rates to be lower after retirement,but this is not the key benefit,阿浪掌刺病箍陪惟讣奎斥垮机布谐煎奴制林搂恢菩持痪孔室香途肉俘巾沈金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,22,IRA Benefits,The major benefits are more subtle.Assume:You can contribute$1,000 of pre-taxed income to the IRA plan,starting next year,for the next 30-years.This will grow at the rate of inflation of 2%That the plan will return 10%/yearThe tax rate on all taxable income streams is 20%,both now and after retirement,搜锨吐瘦丫恃掉射疏臃抨震枯襄客臀锗凶象皮寓讼钡舵蔡贾云仅区豹气好金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,23,A comparison,Using IRA:Total pre-tax amount accumulated in IRA would be Pay taxes at the rate of 20%,so you would have the following amount left after taxUsing other saving accounts:You have to pay 20%of$1,000 as tax immediately,so$800 left after tax each year;The after-tax interest rate earned is,therefore,So the amount accumulated at the savings plan would be,夯富旗恐馋抨假蕾赎氧谨议闯汾霉滤嗅舞胃泣赚采撂七真之叶怕郎睹砷畴金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,24,The Advantage of Tax-Deferred Saving,舱森臭瞒仆报赣辊龄褪摈谤遵症时闭挥蔚抄醋妆郊做尚便全点经沏侗蕴号金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,25,5.4 Should You Invest in a Professional Degree?,Education may be viewed as an investment in human capitalOne purpose of additional schooling is to increase ones earning powerExample:Getting a Graduate Degree(like all of you),芹键禾峭蝗倍芦鹅冶徒韵跑运羚魂池车厅兰撩纳概袱藩碟遗白仟赤察梆沸金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,26,Example 2,You are 30 years old and are considering full-time study for an MBA degree.Tuition and other direct costs will be$15,000 per year for two years.In addition you will have to give up a job with a salary of$30,000 per year.Assume tuition is paid and salary received at the end of the year.How much does your salary have to increase(in real terms)as a result of getting your MBA degree to justify the investment?Assume a real interest rate of 3%per year and ignore taxes.Also assume that the salary increase is a constant real amount that starts after you complete your degree(at the end of the year following graduation)and lasts until retirement at age 65.,螟暂烟壹贴卜廊监稠绅按避疵励纶颂逐每囚凹痕陀官尺燥庇邢杉踊磐兵血金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,27,A more complicated exampleYouve decided to obtain practical experience for 10 years,and then get a Ph.D.In three years You want the same standard of income over the next 13 years Assume that all cash flows occur at year-endYour starting salary is$35,000.Because you are smart,this will increase by 15%/year.You have agreed to be paid this at the end of the first year,and yearly thereafterPh.D.Fees are currently$15,000 per year,and increase by 3%/year with general inflation.Fees are paid at the end of each year,so the fees for the period from 10 to 11 are paid at year 11,圣讼蝗涵糯丧吐敌满芒昼俺貌唉胖聚犯窑吻柏艰疙惮唇扛肚黔仅毕蔼赖鳃金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,28,Con.,Taxes are 30%,and are assumed to be constant.Assume that lending and borrowing rates have been adjusted for taxA fund with acceptable risk yields 10%/yearYou may also borrow at 10%Lending rate=borrowing rate!The real reason for this is to simplify the math,but the fund could be moderately aggressive,and the debt be consumer loansQuestion:Living Expenditure?,选椅茅挺蒸檀糯猜层驶历宝赠盎厉藩豆脂很屑莫勉连绢擂便趴朋蛛圃乘省金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,29,Data Extraction,Let the expenditure required for your standard of living be X at the end of year 0(beginning of year 1),X*1.03 in year 2,X*1.032 in year 3,et ceteraThe fees start at$15,000*1.0310(year 11),and continue to grow at a rate of 3%Your net salary starts at$35,000（after-tax）in year 1,and grows at 15%for 10 yearsEverything is discounted at 10%,藤被郭成幽慰每伸遣溢油祁泰滴彻抚镣纂波峭琴邪拼垒惰遵泅锤倍飘县据金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,30,Salary cash flow(rate issue),The after-tax nominal cash flow in the first year is$35,000,grows at a nominal 15%for 10 yearsWe treat the 15%as the combined effect of inflation and real growthApply,and“Inflation”is the 15%hereThe real rate is(0.10-0.15)/1.15=-4.35%,which is the growth rate of purchasing power of your salary,垛印疥拖桥督势貉诵季唤糜剧叙乃她拱最角寄蔽汲晚禽芝录氦抉咐韶罪汁金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,31,Salary cash flow($issue),Now,remember,we have assumed that the cash flows occur at the end of each yearThe first net income occurs at time 1,and so must be discounted to year 0The real salary is not$35,000 but$35,000/1.15=$30,434.78,滩参颗坊幅浑坠性栋油酌檀挟省武刊谋糜为棺也蠢沃淫末另滋悼民斯捅耐金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,32,Salary Cash Flow Computation,Using your financial calculators10-n;4.35“+/-”-I;PV=?;$30,434.78261-PMT;0-FVResult PV=$391,816.3459(in),怒活虾夕跃软荒路恒绵蛔叮卑蝉俐砚受羡互豆幻俞永鲍朗祝孙符锥羡铬渗金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,33,Fee cash flow($issues),The fees are already expressed in real terms,but the first cash flow occurs in year 11,not 10(the evaluation point)The year 11 real cash flow must be adjusted to year 1015000/1.03=$14563.1068,脉缔秋斩频亏送碘殆狞绊纂溜丧阂迸忘更菲胖描峦梁盒椽墓苦赃越哥孵郑金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,34,Solution by Real Conversion,The real interest rate is(0.10-0.03)/1.03=6.7961165%or about 6.80%,二蜂罕匿励酶揭堪骗寨瓣抓痹掺烽矩纤际痴锅请烟粪脚预乏猪酌碍输蹿泡金融学教学课件bodie2e_chapter05金融学教学课件bodie2e_chapter05,Copyright 2009 Pearson Education,Inc.Publishing as Prentice Hall,35,Fee Cash Flow Computation,The present value of the fees at year 10 may be obtained using your financial calculator:3-n;6.80-I;PV=?;$14563.1068-P