Immersing finance into everyday life: Thanks University of Michigan

Introduction to Finance

How did I arrive at this course?

As part of my ‘Zero Cost MBA(Global Manager for 21st Century)’ project, I have taken course financial markets from Open Yale Courses in the late 2012. In that course, I have realized need to understand more about basic finance to understand movement of money in bigger corporations. I have seen course ‘Introduction to Finance’ in the courses list, when I was taking one of my first MOOC at Coursera. I have enrolled for it but could not finish it for the very first instance as I could not keep up with the schedule. However, I have downloaded all the lectures and studied them later. Unfortunately, I have neither done any assignment nor participated in discussions forums. Although, this course was offered multiple times in past 18 months, but time constraints made it difficult for me to fulfill the requirements of earning course completion certificate. However, I did use the course learning in many real life situations going to be described later in this post.

Experience with the course

Although, I have found pace of lectures very slow, still they all were very interesting. Personal advice’s given by Prof. Gautam Kaul in between the lectures on finance made it even more interesting. First 4 weeks of this course were not new for me, as I have already studied those concepts during my engineering studies. Apart from other concepts, time line concept was so beautifully reintroduced by the teacher that I have started to think every second thought of mine was mixed things on the time line scale.

From week 5, real journey to this course has started. Bonds and stocks were new and important concepts. Understanding what is the risk in the corporate world and how stocks are evaluated were interesting developments. Parallel to my studies, I was also studying lot of business news to get updates of activities around the world . This course helped me to understand lot of financial terms coming into the newspapers. It was interesting to know how finance risk can be managed and changing the assets distribution can maximize the returns. Especially knowing CAPM(Capital Asset Pricing Model) gave me chance to calculate risks in bonds and stocks myself without relying on someone else. Not only the financial problems, it is possible to use this timeline concept at many other places, which I will show you in the upcoming section.

Prof. Kaul presented concepts in very slow and peaceful manner with lot of life advices in between. Finance is really awesome if we all try to take part in it. Even now, sometime I watch video lectures just to hear some of the advices prof. Has shared about life to get some inspiration. I feel honored to study his course.

    Using course learning in real life situations

Finance is valuable to everyone, I have followed the same theme by using concepts in many real life situation. Let me share two of them.

Making the right choices During this course days, I used to eat once a week at a street vendor shop. He was making a dosa ( an Indian dish) using the gas cylinders. Just for your information, we use gas cylinders to cook food in India and these cylinders can only be issued by government agencies to a subscribed member. The number of gas cylinders issued per person are fixed and subsidized by the government. Above this number, one has to pay higher price to obtain them. This person did not have any license and he was buying those cylinders through someone else. It is both illegal as well as costing him too much money. During my free time, I have sat with him to discuss his situation. I have calculated money he has borrowed, money he might get if he put something in bank, his per day expenditure & revenue, plus amount he must need to sustain himself. I have used some of the tools learn in this course to figure out some alternatives to him. I have suggested him to take a proper license and optimized his expenditure to improve his savings & future prospectus. Unfortunately, I have shifted to new house in the process and did not see him since then, but I do hope that he has followed my advice.

Choosing the right price and location: Last year, I was engaged in conversation with another street vendor, who was seeling Pani Puri (a spicy Indian snack). He was running this on franchises basis but he was just an employee. He could only earn & save if he sells maximum at any given day. This time, instead of using months, years I have spitted the time line into hours. I have asked some information from him on the days and place where he was earning maximum. I have also asked him the money he is saving after paying money to the actual owner. Based on the inputs, I have used NPV in slightly different ways on different location, time duration to see if this person can maximize his earning. I have also check the possibility of raising the price in peak hours to improve his earnings. Majority of this thing was less on paper and more in mind. Being good at mathematics helped me a lot here. I was happy that at last, I was able to suggest some methods to expand his business and possibility to get better returns on his hard work.

Further studies

Taking advice’s from this course and getting hints from my business newspaper readings, I have self-studied courses on Financial accounting. Now, I am able to get better understanding of the company reports and quarterly results regularly appears in business newspapers. Later in 2013, I have also studied Macroeconomics and Microeconomics. With all these knowledge, today I can read the way markets are moving, effect of benchmark rate cuts, policy measures taken by the government, government debt and their effects on markets as well as on my personal life. I can make better decisions after gaining all these knowledge. I agree with Prof. Kaul that no one can predict the future but at least one can prepare for it. That’s what I did through this entire project and I am very happy today to take this unexplored path.

>> Course page of ‘Introduction to Finance’
>> University of Michigan | Open.Michigan
>> Introduction to Finance (UMich – Coursera course) – Facebook Group
>> MyCoursera – Introduction to Finance – Facebook Group


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