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A Study on Personal Financial Planning:by System Dynamics Approach

Maslow¡¦s famous theory, the demand theory, constitutes a hierarchy of five levels. One can fulfill these demands stage by stage provided one has sufficient money.
In Taiwan, more and more people are getting old, but the government hasn¡¦t figured out the welfare system for the aged. Without annuities after retirement, it¡¦s important for one to have an alternative. Financial planning helps one make good use of income to accumulate a considerable amount of money for children¡¦s education and spending after retirement.
In this research, I try to establish the patterns of individual and family financial planning in the method of system dynamics, helping people to choose their destiny in their lives.
This research shows that system dynamics modeling for the analysis of financial planning can really work. The structure and dynamics of systems enable us to understand and control the complex financial systems. It allows us to design strategies for greater success. This research reaches two achievements:
1. Make causal loop diagrams (CLDs) of financial planning
The CLDs eliciting here are suitable for individuals or teams. CLDs enable us to seek endogenous explanations for phenomena , instead of exogenous ones, which may be more lopsided. It can help us to have a whole picture of the interaction of the variables presented.
2. Formulate a simulation model
The model built in this research can lead to quantification results, which enable us to compare all kinds of different situations and estimate the long-term influences on different plans .
The long-term financial investment planning must be done under an effective management structure. An investment managed in scientific methods can be more effective and create a fortune more easily as well. A well-designed financial planning allows one to understand one¡¦s financial condition, precisely predict the cash flows in the future, and choose the most suitable kind of investment combination. In this way, one can successfully accomplish each goal of one¡¦s life without any concerning for money.

Identiferoai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0531104-195109
Date31 May 2004
CreatorsChen, Yu-ling
ContributorsVictor W. Liu, Yi-Ming Tu, Showing Young, Jen-Jsung Huang
PublisherNSYSU
Source SetsNSYSU Electronic Thesis and Dissertation Archive
LanguageCholon
Detected LanguageEnglish
Typetext
Formatapplication/pdf
Sourcehttp://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0531104-195109
Rightscampus_withheld, Copyright information available at source archive

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