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PERSONAL
FINANCE FOR
ENGINEERS
CS 007: SESSION 10
ADDITIONAL
TOPICS
CS 007
SURVEY RESULTS
• Lot of agreement in the free-
form entries on survey.


• A few outliers


• Income & Wealth
Inequality


• Retirement Planning


• Working Abroad


• The survey confirms: bitcoin,
VC/PE & derivatives
VENTURE CAPITAL &


PRIVATE EQUITY
what are they, why do they exist
WHAT IS PRIVATE EQUITY?
• Private equity (PE) is composed of funds & investors
that are not publicly traded that invest directly in
private companies or buyout public companies.


• Technically includes venture capital, but commonly
refers to funds that invest in established
companies.


• Focus is on long term, illiquid investments.


• Funds can be used to buy out former investors,
fund new development, make acquisitions, expand
working capital, establish control to change
management and company structure.


• A private equity firm typically has multiple funds
that can vary in size and approach.


• Funds are structured as partnerships with general
partners that make investment decisions, and
limited partners who provide capital.
WHAT IS VENTURE CAPITAL?
• Venture capital (VC) is a type of private equity
focused on financing small, early-stage, emerging
companies with high growth potential.


• Companies are funded in a phased model where
more capital is provided as the company executes,
eliminating risk and increasing value.


• Originated with wealthy families in the first half of
the 20th century.


• Closely associated with the exponential growth of
technology companies in Silicon Valley in the 1970s
& 80s. Early successes include Digital Equipment
Corporation, Apple Computer & Genentech.


• ERISA changes in 1978 opened the door for
pension funds to invest in venture capital. Industry
went from $750M in 1978 to $31B by end of the
1980s.
HOW DO VENTURE CAPITALISTS MAKE MONEY?
• Rounds are typically referred to as pre-seed, seed, A, B, C, etc.
They receive a special class of shares called "preferred” that
have extra rights & privileges, but cost more than “common”


• Venture capital firms typically receive capital back only in the
case of a liquidity event, an IPO or an acquisition.


• It can take anywhere from 5-7 years for a venture investment
to become liquid.


• Top 20 VC firms (out of approximately 1000) generate about
95% of the industry’s returns.


• Limited partners typically expect a significant premium over
the stock market to compensate for the additional risk &
illiquidity of venture capital.


• 80% of a typical venture capital fund returns are generated by
20% of the investments (William Sahlman).


• As a result, winners have to be very large to return the fund,
let alone a venture-class compounded return. A company
worth $1B is a very successful company, but 20% of that
company is only worth $200M. To just return a $1B fund, you’d
need 5 of those. To return 3x the fund, you’d need 15.


• To find investments that 10x your money, you have to be non-
consensus and right. (Howard Marks)
Howard Marks 2x2 Matrix
VC Firm Returns
* https://blog.wealthfront.com/venture-capital-economics/
Biggest problem? You can’t get your money into the Top 20 firms.
DERIVATIVES
futures & options
WHAT IS A DERIVATIVE?
• A derivative is a security that is
dependent upon one or more underlying
assets.


• A derivative can be created by a unique
contract or standardized for trading on
exchanges.


• The most common standardized
derivatives are: futures & options


• They are often used for hedging or
speculation.


• The overall notional value for derivatives
was estimated at $1.2 Quadrillion in 2015,
more than 10x the size of global GDP.
* https://www.investopedia.com/ask/answers/052715/how-big-derivatives-market.asp
WHAT IS A FUTURE?
• A future is a contract for the future
sale of a commodity at a pre-
determined time & price.


• Original use cases included farming &
shipping.


• First exchange in feudal Japan, Dojima
Rice Exchange.


• Futures are settled by delivery of the
underlying goods, on the date and at
the time specified.


• Clearinghouses ensure that contract
payments are fulfilled.
WHAT IS AN OPTION?
• An option is the right to either
buy or sell a security by a future
date.


• European options can only be
exercised on the expiration date.


• American options can be
exercised anytime up to the
expiration date.


• A call option is the right to buy


• A put option is the right to sell
HOW DO YOU VALUE AN OPTION?
• There are multiple factors that affect the value
of a stock option.


• Current stock price


• Intrinsic value


• Time to expiration


• Volatility


• Interest rates


• Cash dividends


• Black-Scholes was developed in 1973 by Fischer
Black, Robert Merton & Myron Scholes.


• “Fair Value” often refers to the Black-Scholes
value for a derivative, although there are other
methods to calculate the value of a derivative.


• The price of an option is called the premium,
and is quoted as a per share price even though
options trade in blocks of 100.
EXAMPLE: BUYING A CALL OPTION (INTRINSIC VALUE)
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK CALL OPTION @ 10
UNLIMITED UPSIDE, CAPPED DOWNSIDE (PREMIUM)
EXAMPLE: BUYING A PUT OPTION (INTRINSIC VALUE)
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK PUT OPTION @ 10
CAPPED UPSIDE (STOCK PRICE), CAPPED DOWNSIDE (PREMIUM)
EXAMPLE: SELLING A CALL OPTION (INTRINSIC VALUE)
-$10
-$5
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK CALL OPTION @ 10
CAPPED UPSIDE (PREMIUM), UNLIMITED DOWNSIDE
EXAMPLE: SELLING A PUT OPTION (INTRINSIC VALUE)
-$10
-$5
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK PUT OPTION @ 10
CAPPED UPSIDE (PREMIUM), CAPPED DOWNSIDE (STRIKE PRICE)
COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE)
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK
ASSUME YOU HAVE STOCK YOU WANT TO HOLD, BUT PROTECT DOWNSIDE
COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE)
-$10
-$5
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK SELL CALL @ 12
SELLING CALL GIVES YOU CASH TO BUY PUT, BUT LIMITS UPSIDE TO 12
COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE)
-$10
-$5
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK SELL CALL @ 12 BUY PUT @ 8
PUT GIVES YOU INSURANCE IF THE STOCK FALLS BELOW 8
COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE)
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK SELL CALL @ 12 BUY PUT @ 8 TOTAL
CAPPED UPSIDE (CALL STRIKE), CAPPED DOWNSIDE (PUT STRIKE)
COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE)
-$10
-$5
$0
$5
$10
$15
$20
$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20
STOCK SELL CALL @ 12 BUY PUT @ 8 TOTAL
CAPPED UPSIDE (CALL STRIKE), CAPPED DOWNSIDE (PUT STRIKE)
CRYPTO
basics & common questions
WHAT IS BITCOIN?
• Bitcoin is a cryptocurrency, a digital asset
designed to work as a medium of exchange.


• Paper by Satoshi Nakamoto (who is unknown)
published on 10/31/2008, “A System for
Electronic Transactions Without Relying on Trust”


• Network went live in January 2009 with first
open source client & bitcoins. Satoshi mined the
first block ever (“the genesis block”)


• Blockchain is a cryptographically secure,
distributed ledger for transactions.


• Fixed supply, constrained to 21M total possible.
Scarcity is designed into the system.


• Bitcoin are issued as rewards for “mining”, which
is the process of adding compute to the network.
WHY IS BITCOIN INTERESTING?
• Publicly transparent & uncensored
distributed ledger for financial
transactions.


• A digital asset that cannot be freely
copied, with enforced scarcity.


• A “digital store of value”


• Byzantine Generals’ Problem


Original paper describing from 1982*


Satoshi explanation from 2008**


• Cryptographically secure.


• Network with the highest value (as
measured by coin-based market
capitalization)
* https://www.microsoft.com/en-us/research/publication/byzantine-generals-problem/
** https://www.mail-archive.com/cryptography@metzdowd.com/msg09997.html
WHAT IS ETHEREUM?
• Ethereum is a decentralized platform
that runs smart contracts.


• Blockchain-based distributed
computing.


• Launched 2014.


• Ether is the digital asset.


• Ethereum transaction fees are based
computational power required.


• Supply of Ether not limited. Built in
inflation of 18m (max) per year.


• Transition to Ethereum 2.0
WHAT ARE NFTS?
• NFTs (or “non-fungible tokens”) are a special
kind of cryptoasset in which each token is
unique.


• Can be used to authenticate ownership of
digital assets like artworks, recordings, and
virtual real estate or pets.


• Most non-fungible tokens are built using the
ERC-721 and ERC-1155 standards.


• Accessible via wallets (Coinbase, Rainbow,
Metamask) & marketplaces (Opensea)


• In 2017, Cryptopunk #7804 sold for $15,000.
In 2021, Dylan Field sold it for 4200 ETH
(~$7.5M)


• Total sales of $3.4B in Aug 2021 (!)
HOW MUCH IS BITCOIN WORTH?
• First bitcoin transaction was on May 22,
2010, purchasing two Papa John’s pizzas for
10,000 BTC.


• In five days, price of BTC went from $0.008
to $0.08, a gain of 1000%.


• Bitcoin was less than $1,000 on 1/1/2017


• Bitcoin was $11,600 on 12/4/2017


• Bitcoin was $3,896 on 12/3/2018


• Bitcoin was $7,314 on 12/1/2019


• Bitcoin was $17,597 on 11/17/2020


• Bitcoin was $50,615 on 12/6/2021


• Is there a fundamental basis for valuing
Bitcoin? How do you value an asset that
generates no cash flow?
WHAT WOULD BITCOIN LOOK LIKE IN A DIVERSIFIED PORTFOLIO?
• As of EOY 2020:


- Global equity markets: $105T


- Global bond markets: $123.5T


• Bitcoin is currently valued at ~$1T


• Bitwise Investments estimates the
correlation of Bitcoin to only 0.12 with
Equities (VTI), 0.25 with Bonds (BND).


• Bitwise Investments*** has a portfolio
simulator that allows you to view how
your portfolio would have performed w/
either Bitcoin or the Bitwise 10 Index.


• Increasing possibility that cryptocurrency
becomes an asset class, long term.
* https://www.bitwiseinvestments.com/resources
** https://s3.amazonaws.com/static.bitwiseinvestments.com/Bitwise-The-Case-For-Crypto-In-An-Institutional-Portfolio.pdf
*** Please note: this is not an endorsement for Bitwise Investments. Adam Nash is a seed investor & advisor to the company.
QUESTIONS
CS 007
FINAL THOUGHTS
wrapping up
FIRST SLIDE: WHY PERSONAL FINANCE?
• Poorly covered in secondary school
& university curricula, even at top
schools.


• Not technically difficult, but the
signal-to-noise ratio is terrible.


• Massive impact on your life.


• Affects everyone.
* Please note: many of the hand-made drawings in this presentation are sourced from Carl Richards, behaviorgap.com
LAST SLIDE: THINGS TO DO AFTER THIS CLASS
• Keep thinking actively about your financial
plans and decisions.


• Discuss personal finance and related topics
with your friends & family.


• Don’t be afraid to make decisions, and learn
from your mistakes. Better to make them when
the dollars are small and your responsibilities
are few.


• Be skeptical of any quick and easy paths to
financial success.


• Always remember: good investing is boring.


• Please join the CS 007 alumni group, a private
list for students who have taken this class and
want a safe place to discuss personal finance
questions.

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Stanford CS 007-10 (2021): Personal Finance for Engineers / Additional Topics / VC, Private Equity, Derivatives & Crypto

  • 3. SURVEY RESULTS • Lot of agreement in the free- form entries on survey. • A few outliers • Income & Wealth Inequality • Retirement Planning • Working Abroad • The survey confirms: bitcoin, VC/PE & derivatives
  • 4. VENTURE CAPITAL & PRIVATE EQUITY what are they, why do they exist
  • 5. WHAT IS PRIVATE EQUITY? • Private equity (PE) is composed of funds & investors that are not publicly traded that invest directly in private companies or buyout public companies. • Technically includes venture capital, but commonly refers to funds that invest in established companies. • Focus is on long term, illiquid investments. • Funds can be used to buy out former investors, fund new development, make acquisitions, expand working capital, establish control to change management and company structure. • A private equity firm typically has multiple funds that can vary in size and approach. • Funds are structured as partnerships with general partners that make investment decisions, and limited partners who provide capital.
  • 6. WHAT IS VENTURE CAPITAL? • Venture capital (VC) is a type of private equity focused on financing small, early-stage, emerging companies with high growth potential. • Companies are funded in a phased model where more capital is provided as the company executes, eliminating risk and increasing value. • Originated with wealthy families in the first half of the 20th century. • Closely associated with the exponential growth of technology companies in Silicon Valley in the 1970s & 80s. Early successes include Digital Equipment Corporation, Apple Computer & Genentech. • ERISA changes in 1978 opened the door for pension funds to invest in venture capital. Industry went from $750M in 1978 to $31B by end of the 1980s.
  • 7. HOW DO VENTURE CAPITALISTS MAKE MONEY? • Rounds are typically referred to as pre-seed, seed, A, B, C, etc. They receive a special class of shares called "preferred” that have extra rights & privileges, but cost more than “common” • Venture capital firms typically receive capital back only in the case of a liquidity event, an IPO or an acquisition. • It can take anywhere from 5-7 years for a venture investment to become liquid. • Top 20 VC firms (out of approximately 1000) generate about 95% of the industry’s returns. • Limited partners typically expect a significant premium over the stock market to compensate for the additional risk & illiquidity of venture capital. • 80% of a typical venture capital fund returns are generated by 20% of the investments (William Sahlman). • As a result, winners have to be very large to return the fund, let alone a venture-class compounded return. A company worth $1B is a very successful company, but 20% of that company is only worth $200M. To just return a $1B fund, you’d need 5 of those. To return 3x the fund, you’d need 15. • To find investments that 10x your money, you have to be non- consensus and right. (Howard Marks) Howard Marks 2x2 Matrix VC Firm Returns * https://blog.wealthfront.com/venture-capital-economics/ Biggest problem? You can’t get your money into the Top 20 firms.
  • 9. WHAT IS A DERIVATIVE? • A derivative is a security that is dependent upon one or more underlying assets. • A derivative can be created by a unique contract or standardized for trading on exchanges. • The most common standardized derivatives are: futures & options • They are often used for hedging or speculation. • The overall notional value for derivatives was estimated at $1.2 Quadrillion in 2015, more than 10x the size of global GDP. * https://www.investopedia.com/ask/answers/052715/how-big-derivatives-market.asp
  • 10. WHAT IS A FUTURE? • A future is a contract for the future sale of a commodity at a pre- determined time & price. • Original use cases included farming & shipping. • First exchange in feudal Japan, Dojima Rice Exchange. • Futures are settled by delivery of the underlying goods, on the date and at the time specified. • Clearinghouses ensure that contract payments are fulfilled.
  • 11. WHAT IS AN OPTION? • An option is the right to either buy or sell a security by a future date. • European options can only be exercised on the expiration date. • American options can be exercised anytime up to the expiration date. • A call option is the right to buy • A put option is the right to sell
  • 12. HOW DO YOU VALUE AN OPTION? • There are multiple factors that affect the value of a stock option. • Current stock price • Intrinsic value • Time to expiration • Volatility • Interest rates • Cash dividends • Black-Scholes was developed in 1973 by Fischer Black, Robert Merton & Myron Scholes. • “Fair Value” often refers to the Black-Scholes value for a derivative, although there are other methods to calculate the value of a derivative. • The price of an option is called the premium, and is quoted as a per share price even though options trade in blocks of 100.
  • 13. EXAMPLE: BUYING A CALL OPTION (INTRINSIC VALUE) $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK CALL OPTION @ 10 UNLIMITED UPSIDE, CAPPED DOWNSIDE (PREMIUM)
  • 14. EXAMPLE: BUYING A PUT OPTION (INTRINSIC VALUE) $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK PUT OPTION @ 10 CAPPED UPSIDE (STOCK PRICE), CAPPED DOWNSIDE (PREMIUM)
  • 15. EXAMPLE: SELLING A CALL OPTION (INTRINSIC VALUE) -$10 -$5 $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK CALL OPTION @ 10 CAPPED UPSIDE (PREMIUM), UNLIMITED DOWNSIDE
  • 16. EXAMPLE: SELLING A PUT OPTION (INTRINSIC VALUE) -$10 -$5 $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK PUT OPTION @ 10 CAPPED UPSIDE (PREMIUM), CAPPED DOWNSIDE (STRIKE PRICE)
  • 17. COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE) $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK ASSUME YOU HAVE STOCK YOU WANT TO HOLD, BUT PROTECT DOWNSIDE
  • 18. COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE) -$10 -$5 $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK SELL CALL @ 12 SELLING CALL GIVES YOU CASH TO BUY PUT, BUT LIMITS UPSIDE TO 12
  • 19. COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE) -$10 -$5 $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK SELL CALL @ 12 BUY PUT @ 8 PUT GIVES YOU INSURANCE IF THE STOCK FALLS BELOW 8
  • 20. COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE) $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK SELL CALL @ 12 BUY PUT @ 8 TOTAL CAPPED UPSIDE (CALL STRIKE), CAPPED DOWNSIDE (PUT STRIKE)
  • 21. COMBINATIONS: A ZERO COST COLLAR (INTRINSIC VALUE) -$10 -$5 $0 $5 $10 $15 $20 $0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 $16 $17 $18 $19 $20 STOCK SELL CALL @ 12 BUY PUT @ 8 TOTAL CAPPED UPSIDE (CALL STRIKE), CAPPED DOWNSIDE (PUT STRIKE)
  • 23. WHAT IS BITCOIN? • Bitcoin is a cryptocurrency, a digital asset designed to work as a medium of exchange. • Paper by Satoshi Nakamoto (who is unknown) published on 10/31/2008, “A System for Electronic Transactions Without Relying on Trust” • Network went live in January 2009 with first open source client & bitcoins. Satoshi mined the first block ever (“the genesis block”) • Blockchain is a cryptographically secure, distributed ledger for transactions. • Fixed supply, constrained to 21M total possible. Scarcity is designed into the system. • Bitcoin are issued as rewards for “mining”, which is the process of adding compute to the network.
  • 24. WHY IS BITCOIN INTERESTING? • Publicly transparent & uncensored distributed ledger for financial transactions. • A digital asset that cannot be freely copied, with enforced scarcity. • A “digital store of value” • Byzantine Generals’ Problem 
 Original paper describing from 1982* 
 Satoshi explanation from 2008** • Cryptographically secure. • Network with the highest value (as measured by coin-based market capitalization) * https://www.microsoft.com/en-us/research/publication/byzantine-generals-problem/ ** https://www.mail-archive.com/cryptography@metzdowd.com/msg09997.html
  • 25. WHAT IS ETHEREUM? • Ethereum is a decentralized platform that runs smart contracts. • Blockchain-based distributed computing. • Launched 2014. • Ether is the digital asset. • Ethereum transaction fees are based computational power required. • Supply of Ether not limited. Built in inflation of 18m (max) per year. • Transition to Ethereum 2.0
  • 26. WHAT ARE NFTS? • NFTs (or “non-fungible tokens”) are a special kind of cryptoasset in which each token is unique. • Can be used to authenticate ownership of digital assets like artworks, recordings, and virtual real estate or pets. • Most non-fungible tokens are built using the ERC-721 and ERC-1155 standards. • Accessible via wallets (Coinbase, Rainbow, Metamask) & marketplaces (Opensea) • In 2017, Cryptopunk #7804 sold for $15,000. In 2021, Dylan Field sold it for 4200 ETH (~$7.5M) • Total sales of $3.4B in Aug 2021 (!)
  • 27. HOW MUCH IS BITCOIN WORTH? • First bitcoin transaction was on May 22, 2010, purchasing two Papa John’s pizzas for 10,000 BTC. • In five days, price of BTC went from $0.008 to $0.08, a gain of 1000%. • Bitcoin was less than $1,000 on 1/1/2017 • Bitcoin was $11,600 on 12/4/2017 • Bitcoin was $3,896 on 12/3/2018 • Bitcoin was $7,314 on 12/1/2019 • Bitcoin was $17,597 on 11/17/2020 • Bitcoin was $50,615 on 12/6/2021 • Is there a fundamental basis for valuing Bitcoin? How do you value an asset that generates no cash flow?
  • 28. WHAT WOULD BITCOIN LOOK LIKE IN A DIVERSIFIED PORTFOLIO? • As of EOY 2020: 
 - Global equity markets: $105T 
 - Global bond markets: $123.5T • Bitcoin is currently valued at ~$1T • Bitwise Investments estimates the correlation of Bitcoin to only 0.12 with Equities (VTI), 0.25 with Bonds (BND). • Bitwise Investments*** has a portfolio simulator that allows you to view how your portfolio would have performed w/ either Bitcoin or the Bitwise 10 Index. • Increasing possibility that cryptocurrency becomes an asset class, long term. * https://www.bitwiseinvestments.com/resources ** https://s3.amazonaws.com/static.bitwiseinvestments.com/Bitwise-The-Case-For-Crypto-In-An-Institutional-Portfolio.pdf *** Please note: this is not an endorsement for Bitwise Investments. Adam Nash is a seed investor & advisor to the company.
  • 31. FIRST SLIDE: WHY PERSONAL FINANCE? • Poorly covered in secondary school & university curricula, even at top schools. • Not technically difficult, but the signal-to-noise ratio is terrible. • Massive impact on your life. • Affects everyone. * Please note: many of the hand-made drawings in this presentation are sourced from Carl Richards, behaviorgap.com
  • 32. LAST SLIDE: THINGS TO DO AFTER THIS CLASS • Keep thinking actively about your financial plans and decisions. • Discuss personal finance and related topics with your friends & family. • Don’t be afraid to make decisions, and learn from your mistakes. Better to make them when the dollars are small and your responsibilities are few. • Be skeptical of any quick and easy paths to financial success. • Always remember: good investing is boring. • Please join the CS 007 alumni group, a private list for students who have taken this class and want a safe place to discuss personal finance questions.