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The Financial Way of Thinking: Foundational Principles

Amidst a rapidly evolving economic landscape, the financial way of thinking emerges as a vital skill, distinct from its accounting and economic counterparts. It is the linchpin for financial decisions and a broader understanding of market, firm, and economic interactions.


This course is designed for the discerning heirs of ultra-high-net-worth families who seek to develop the fundamental principles of finance by breaking down complex concepts to their foundational levels. We aim to illuminate the core principles that govern the financial realm and, more importantly, learn to leverage them effectively.

Join us in this structured, interactive, and comprehensive journey into the financial world, ensuring a blend of theoretical understanding and practical application.

Learning Objectives

Capitalism Explored:

Understand the core mechanics of a capitalist economy by diving into traditional viewpoints and modern controversies.

Interdisciplinary Overview:

Decode the similarities and differences between Accounting, Economics, and Finance and discover how they shape your financial perspective.

Money in Depth:

Recognize the three dimensions of money – magnitude, timing, and risk.

Time Value Mechanics:

Master the core calculations that are the backbone for financial decision-making.

Informed Investments:

Learn the art and science of discerning between good and bad investments.

Financial Markets:

Navigate the world of stocks and bonds, understand systematic risk, and draw lessons from historical market behaviors.

Sourcing Capital:

Dive into the intricacies of private and public capital sources, including the ‘going public’ process.

Course Details

To optimize learning while providing flexibility, the course is structured as follows:

Start Date: September 3, 2024

Format: Virtual live classroom with instruction conducted online by a highly credentialed instructor to cater to our students’ diverse and global nature.

Duration & Schedule: 8 sessions, delivered on a weekly basis, over 2 months.

Session Details: 60 mins sessions followed by 15 mins Q&A.

Support: Throughout the course, students will have access to a dedicated Teaching Assistant, enabling questions or topics that need further clarity outside of the live instruction to be addressed promptly.

Materials: Curriculum content in the form of PowerPoint slides and a select set of articles curated to enhance understanding and knowledge retention will be provided.

Tools: Course content materials, calendar, syllabus, modules, virtual classroom, session videos, and related course information is accessible by students directly through Succession Advisors’ online Learning Management System (www.successionadvisors.com).

Tuition: $4,000

Course Outline

1. Capitalism, Markets and Firms


  • Finance, Accounting, and Economics
  • The U.S. Economy, Capitalism: Strengths and Weaknesses
  • The morality of capitalism,
  • The importance of markets
  • Organizational forms of business and the Dominance of Public Corporations
    • The ESG controversy.
  • Accounting, Economics, and Finance: Different Focus and Objectives
  • A Fundamental Concept: Opportunity Costs
  • Increasing Wealth vs. Creation of New Wealth

2. Financial Statements: Fundamentals


  • The Balance Sheet, Income Statement, and Cash Flow Statement
  • The Uses and Limitations
  • Using Accounting Information for Studying a Firm’s Operations
  • The limitations of profit-based thinking
  • Profits v. Cash Flows
    • “Crude” and comprehensive calculations of cash flows
  • Market values and “The Financial Way of Thinking”

3. Operating and Financial Leverage: The Implications of Technology and Debt


  • Break-even analysis for a business
  • Use of Technology to get Operating Leverage
  • Use of Debt to get Financial Leverage
  • The Benefits and Risks of Leverage
  • ROI Analysis: ROA v. ROE
    • Illustration: Booms and Busts in Housing Markets

4a. Time Value of Money

  • Reading: Calculator Guide
  • Special Session with the Teaching Assistant: Using Excel for Financial Calculations



  • Adjusting for Time: Discounting and Compounding, Annuities, Effective Interest Rates vs. Annual Interest Rate

4b. Applications: The Personal Finance Angle


  • Car/Home Purchase: Types of Loan Repayments, Amortization, Fixed vs. Variable rate loans
  • Calculating Payments: Should You Buy vs. Lease?

5a. Interest Rates, Inflation, and the Federal Reserve


  • Why do interest rates exist?
  • Interest rates and Inflation
  • The Fisher Equation: Real v. Nominal Interest Rates
  • The Yield Curve: What information does it communicate?
  • The “Time Value” of Money

5b. Essential Bond Features and Bond Rules

6a. Investment Decision-Making Criteria


  • Payback Criterion
  • Profitability index
  • Naïve v. Internal Rate of Return
  • Net Present Value (NPV),
  • Strengths and Weaknesses of Each Criterion and Where to Use Each Criterion
  • Illustration of a Capital Budgeting Decision

6b. Making Investment Decision: Capital Budgeting

7a. Measure of Historical Returns and Relevant Risk


  • Single Period, Multiperiod, and Holding Period Return
  • Risks of Returns and Systematic Risk

7b. Lessons From U.S. Market History

7c. Lessons About “Making Money in the Markets”: Notions of Market Efficiency

8a. Private and Public Sources of Capital


  • Angel Investors, Venture Capital, Private Equity
  • “Going Public”—IPOs and the Going Public Process.

8b. Other Investment Vehicles; Mutual Funds and ETFs

  • Reading: Mutual Funds and ETFs, Kiplinger’s Personal Finance
  • Reading: Maximize Your Retirement Investments, Kiplinger’s Personal Finance


8c. What Are Options? What is Their Attraction?

Ramesh K. S. Rao

Course Architect

Ramesh K.S. Rao is the Eugene and Margaret McDermott Professor of Banking and Finance and Founding Director of the Wealth Management Center at the McCombs School of Business at the University of Texas, Austin.

As a University Distinguished Teaching Professor, Dr. Rao’s research interests are asset pricing, financial markets, and the interface between finance and marketing and between finance and operations management. His experience spans across bankruptcy, corporate restructuring, valuation, corporate litigation, and executive education.

He received the Outstanding Professor Award, the Joe Beasley Award, the Jack G. Taylor Teaching Excellence Award, the Outstanding Professor Award in the Executive MBA Program, and The Excellence in Education Award at The University of Texas. He was Associate Dean for Graduate Programs and Director of the Texas MBA Program during 1997-99 and was recently inducted into the Academy of Distinguished Teachers.

Start Date:
September 3, 2024 at 7pm CT

Ready for the Education Initiative?