Your Money: Finance Class on the Web, for Students of All Ages

After all, there are few entirely conflict-free places where investors can educate themselves on the topic, and there’s little to no money-related guidance offered within the public school system, which is where the financial groundwork should really be laid.

Joshua Rauh, a finance professor at the Stanford Graduate School of Business, is acutely aware of that. And it’s why he felt compelled to open his graduate-level course on the finance of retirement and pensions to the masses. “My goal is to try to empower people to make better decisions about their finances with an eye toward retirement and for retirees who are thinking about managing their money,” Professor Rauh said, “whether it is buying an annuity or having a spending rule.”

The course, which is offered free online, begins on Monday. I sat for nearly half of his online video lectures — on topics like “saving for retirement” and “making smart decisions as a stock market investor” — earlier this week. Watching remotely means you won’t be party to the discussion that will emerge from the Socratic method Professor Rauh uses in his traditional classroom on campus. And there are already 13,000 students, so it’s hard to expect any personal attention.

But there’s plenty that students will take away from his lessons, which you can watch anytime after the lecture is released, much as you might watch any series on your DVR. “A person that would really benefit is someone who is 40 and realizing they really need to start putting together a plan for retirement and haven’t thought much about it,” he said, though he says he believes that it will be equally helpful for people of all ages.

There aren’t many other places to turn, particularly where it costs nothing but your time. When I informally polled financial literacy advocates, financial planners and other experts if they knew of any other comprehensive retirement courses, they couldn’t come up with any, though one person mentioned the instructional videos at Khan Academy. (If you know of any classes, please share them in the comments section online).

Without any instruction manual, “people have to be their own chief financial officer,” said Annamaria Lusardi, a financial literacy advocate and economics professor at the George Washington University School of Business, who teaches a class on personal finance. “The large majority of the population lacks the knowledge of basic but fundamental concepts, from the power of interest compounding, to the effects of inflation, to the workings of risk diversification.”

This course may be a good place to start. Each of the 10 video lectures are about 45 minutes long, but they’re broken into bite-size segments, all of which were well produced and relatively engaging. As Professor Rauh explains each concept, animated visuals and colorful graphs appear alongside him, which helps make the concepts easier to grasp.

Each lecture includes a mix of financial theory and prescriptive advice, some of which people with a reasonable base of investment knowledge may already know: actively managed mutual funds aren’t worth the money, so buy index funds. Don’t time the market. Stocks don’t become less risky the longer you hold them.

But the illustrations that accompany the advice — how retiring in 2009, for instance, would have resulted in a nest egg 28 percent smaller than one resulting by retiring in 2012 — are instructive. “It’s not a rocket science idea, but people don’t see it without having it illustrated for them,” Professor Rauh said.

All of the lessons are rooted in what he calls “the economist’s view” of personal finance, which is built on the idea that there are no free lunches in financial markets, and that you can generate potentially higher returns only if you take substantial risk as well. It’s a message woven through his lectures. At times, it almost seems as if there should be a red blinking sign behind Professor Rauh that reads, “Proceed with caution. Stocks ahead!”

He clearly wants the lesson to linger long after you leave his virtual classroom and find yourself in a commission-based stockbroker’s office. “Too often, people just budget on the basis of an ‘expected return’ on their assets without thinking about the range of possible outcomes,” he explained.

He also explains why economists also believe that more people — not all, but more — should buy annuities. Not the high-priced complex contraptions sold to unwitting seniors, but the plain-vanilla immediate annuities, where you pay a giant pile of cash to an insurance company in exchange for a guaranteed stream of income for life.

Wealth Matters: From a Prominent Divorce in the Affluent Class, Lessons for All

Over the years, I’ve tried to avoid writing about big money divorces like this. I’ve just been a bit prudish about something that is at best sad and at worst tragic. I always think of the children. But there is certainly plenty of practical advice to be gleaned from such an emotional issue, which is why lawyers and financial planners should tune in to the salacious gossip.

What little is known — or can be logically assumed — about the Murdoch divorce provides lessons for people with far less money.

There are at least four areas in the Murdoch divorce that other affluent people need to consider if they find themselves served with divorce papers.

AGREEMENTS In the Murdoch case, there is reportedly a prenuptial agreement and two postnuptial agreements that modify the original contract.

Ilan Hirschfeld, national leader of the marital dissolution practice group at Marcum, an accounting firm, said postnuptial agreements generally solidify the prenuptial agreement and make the separation of assets cleaner. But if there is only a prenuptial agreement and it is very old, he would use forensic accounting to challenge it.

“If I’m representing the Mrs. and she’s not happy because her husband is making 10 times what he was making in the beginning, I’ll go back and say, ‘Did you disclose all the assets?’ or ‘Was she properly represented?’ ” he said.

David Aronson, a founding partner of Aronson, Mayefsky & Sloan, took the opposite position. He said people who entered into prenuptial agreements lightly or without proper counsel could be sorely disappointed.

“Prenuptial agreements are routinely enforced in New York, even if they appear to be bad deals,” he said, adding that the few recent cases in which they were overturned were “still exceptions to the rule.”

One type of prenuptial agreement that could draw more scrutiny, Mr. Aronson said, is one drawn up to protect the earnings of the higher-earning spouse when both people were younger. “That’s a very bad deal for the spouse who is never going to earn a lot of money,” he said.

ASSETS Dividing assets between spouses is rarely as simple as deciding to split it 50-50 — or even 60-40. A lot depends on what kinds of assets are involved.

Appraisers and lawyers draw a distinction between passive and active assets. A passive asset would be a house or a stock portfolio, but not all of them can be parceled out.

Jason M. Katz, a private wealth adviser at UBS Wealth Management, said a municipal bond portfolio could be tricky to divide without slighting one spouse because bonds have different maturities and credit quality.

More difficult are investments in hedge funds and private equity. He said couples would have to wait until the next withdrawal period to get their money from a hedge fund, but with private equity they did not have the same option and could be in it for years, depending on how long the fund holds on to its investments. A way around this could involve one spouse trading away rights to it for something else, like a beach house.

A business, on the other hand, is an active investment, and the percentage a spouse is entitled to depends on how much he or she contributed to the business.

In the case of anyone who enters a marriage with an existing business, as Mr. Murdoch did with News Corporation, the calculation of what percentage of the business Mrs. Murdoch could be owed starts on the day they were married and ends with the value of the company on the day they filed for divorce. This is tricky: She traveled with Mr. Murdoch on business, particularly to her native China, and famously smacked a guy trying to throw a pie in his face. But what could she or any one person contribute to the success of a global company like News Corporation?

The calculation changes if the business was started while the couple was married. Mr. Hirchfeld said that a spouse of a business owner who stayed home and raised the children is generally awarded somewhere between 30 to 35 percent of the business.

The Race to Build a Better Business Class

Six feet six inches long and almost two feet wide, the V concept is the German carrier’s latest weapon in the fierce competition among global airlines. It is designed to withstand shocks 16 times the force of gravity and comes with a cozy padded footrest. It is a new business-class seat, and if you are traveling round trip from Frankfurt to New York, it can be yours for about $5,000.

“Business class is where competition really is serious,” says Björn Bosler, the airline’s manager for passenger experience design, business and premium, who led Lufthansa’s team of dozens of seat designers and engineers. Bob Lange, senior vice president, head of market and product strategy at Airbus, the European plane maker, agrees: “There’s an arms race going on among carriers.”

Billions are being spent on research and development, architects, industrial designers and even yacht designers to pack seats with engineering innovations and fancy features. Just fabricating a single business-class seat can cost up to $80,000; custom-made first-class models run $250,000 to $500,000.

Those who fly coach may have had a glimpse of these expenditures as they shuffled past the elaborate reclining, angled, semiprivate accommodations in business and first class on their way to the knee-scraping spaces and overstuffed overhead compartments in the main cabin. Travelers in business and first class may represent 10 to 15 percent of long-haul seats globally, but they account for up to half of the revenue of airlines like Lufthansa or British Airways, says Samuel Engel, a vice president at ICF SH&E, an aviation consulting firm. Carriers vying for the attention of these passengers, who have money or corporate accounts that pay for their travel, are counting on good design to escape the grinding commodity nature of their business.

But there is only so much space inside a plane. As the more lucrative seats expand, the coach section often contracts, with more seats jammed into the same cabin space and more discomfort for coach passengers.

“The seat is one of the few elements that an airline can actually make its own,” says Patricia Bastard, an architect and designer who has worked with Air France on its first-class cabin. “There are very few elements like it inside an airplane. There’s customer service, of course. Maybe there’s a bar. But seats are unique to the airline. Seats are critical.”

Lufthansa, Europe’s largest airline and the world’s fourth largest in terms of passengers, is investing $4 billion to improve its cabins, offer satellite-based Internet and upgrade its onboard entertainment system. But the new business-class seat, which first appeared last year on the company’s new Boeing 747-8 planes, is perhaps the boldest attempt to lure the high-value passenger. The seat research, design, manufacture and installation accounts for roughly a third of that $4 billion investment, says Mr. Bosler — more than a billion dollars. Eleven planes are now outfitted with the new seats, and Lufthansa is expected to install about 7,000 of them on 100 wide-body airplanes by 2015.

Lufthansa’s task — like that of all the big airlines — was to create a special environment for those big-spending travelers within the inflexible boundaries of an aircraft fuselage.

“The challenge was finding a solution that provides all customer benefits but also tries to save as much space as possible and get as many passengers on board as possible,” Mr. Bosler says. “There’s only one way for Lufthansa to make money. It’s with passengers on board.”

THE first airplane business-class sections date to the 1970s, when the seats were like oversize, padded armchairs that could recline about 40 degrees. More comfortable seats for frequent business travelers came with the arrival in the 1990s of planes that could fly nonstop almost anywhere in the world. This new generation of ultralong-range airplanes that could fly for 10 to 14 hours — like the Boeing 777 — meant passengers wanted to be able to get real sleep, not just a fitful, head-snapping catnap.

Rare Win for Class Action Plaintiffs in Amgen

The Supreme Court on Wednesday continued its extensive exploration of class action litigation, handing a rare victory to plaintiffs in one case while hearing arguments in another that could come down on the side of defendants.

Obituary: Joanne Zack, Leading Class Action Attorney, Dies

Joanne Zack, an attorney specializing in complex commercial litigation including representing authors in their copyright class action over Google's efforts to build the largest digital library in the world, was a brilliant attorney who was never boastful or conceited about her accomplishments, colleagues said in the wake of Zack's death last week.

DealBook: Bank of America to Pay $2.43 Billion to Settle Class Action Over Merrill Deal

Bank of America announced on Friday that it would pay $2.43 billion to settle a class-action lawsuit related to its acquisition of Merrill Lynch, as the legal woes continue for the financial institution.

In 2009, shareholders accused Bank of America of making false and misleading statements about the health of the two companies. In part, the plaintiffs accused Bank of America of hiding a major loss at Merrill Lynch just shortly before shareholders were set to vote on the deal.

While Bank of America denied the allegation, the institution said it decided to settle to put the litigation to rest. As part of the proposed settlement, Bank of America also agreed to institute new corporate governance policies.

“Resolving this litigation removes uncertainty and risk and is in the best interests of our shareholders,” Brian Moynihan chief executive said in a statement. “As we work to put these long-standing issues behind us, our primary focus is on the future and serving our customers and clients.”

Early in the financial crisis, Bank of America looked to be one of the winners. As other banks struggled to stay afloat, the firm swooped in to buy Countrywide Financial, the mortgage lender, in 2008. Later that year, Bank of America agreed to purchase Merrill Lynch, the beleaguered investment bank.

But both deals are proving to be a legal albatross.

Countrywide’s mortgage problems have weighed on profits for awhile. In the second quarter of 2011, the bank reported an $8.8 billion loss, mainly related to a settlement with mortgage investors. Earlier this year, Bank of America and four other banks agreed to a $26 billion settlement related to their foreclosure practices.

Now, it faces a similar burden from the Merrill Lynch deal. Bank of America said it would take a $1.6 billion hit related to the settlement. The insititution also agreed to enhance its corporate governance, including those related to “say-on-pay” shareholder votes, the independence of the board’s compensation committee and policies for committees focused on acquisitions.

The settlement won’t be the only black mark on the bank’s financials this quarter. On Friday, the company said that profits would be hurt by a $1.9 billion adjustment related to the value of its debt. It also faces an $800 million charge related to a income tax expense.

In all, Bank of America said earnings would be cut by 28 cents a share. The company is set to report earnings on October 17.

Deals Competition Turns Into Free Online Transactions Class

It started in 2009 with a first-of-its kind transactional law competition in which small teams of law students competed to negotiate the best deals for fictional clients.

The meet was popular enough that its creator, Drexel University Earle Mack School of Law professor Karl Okamoto, took the idea a step further in 2011 by launching LawMeets, a free website that presents law students with transactional simulations. The students are presented with a business scenario and then submit videos in which they offer legal advice. The videos are rated by their peers and the best are evaluated by experts, who offer video feedback for all participants to view.

With a fresh grant of $500,000 from the National Science Foundation, LawMeets in October will expand its offerings with the first in a series of free online courses that combine lectures and simulations exploring the finer points of transactional law.

Okamoto hopes the LawMeets programs will help to fill a curricular void at law schools, where many business law courses focus on legal doctrine and precedents rather than the nuts-and-bolts of deals.

"Very few of these courses talk about how to get a deal done," Okamoto said. "Even in most business organizations classes, there's limited discussion on how to form an LLC and draft an operating agreement."

The first LawMeets course, the Basics of Acquisition Agreements, will last for two weeks -- from October 23 to November 7. The course is what is known as a MOOC -- massive open online course, a technology that law schools are only beginning to experiment with.

The course will include four video lectures, four interactive simulations and two panel discussions moderated by LawMeets faculty and transactional lawyers. Participants may view the lectures online at their own convenience, although there are cutoff dates for the student video submissions.

The lectures will be delivered by Okamoto; DLA Piper partner Jay Finkelstein; University of California, Davis School of Law professor Afra Afsharipour; and Cornell Law School professor Charles Whitehead.

Sixty participants have already signed up for the inaugural class in the few days since it was announced, some as far away as the United Kingdom and Australia. Okamoto hopes that 500 students participate, but the online platform can support thousands of users, he said.

Individual students can participate, but Okamoto hopes that law professors will incorporate its mini-courses into their own classes.