Principles of Financial Literacy Individual Assignment
Case study - Couples information
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Couple 1
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Couple 2
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Couple 3
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Profile
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Wealth Accumulators
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Pre- Retirees
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Retiree
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Names
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Roberto & Lisa
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Jeff & Juan
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Bill & Shirley
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Ages
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Roberto:29, Lisa: 28
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Jeff:55, Juan: 53
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Bill 70, Shirley: 67
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Marital Status
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Recently married
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Married (2 children ages 14 & 13)
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Married (2 children and 2 grandchildren ages 12&9)
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Dependents
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0
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2
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0
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Occupation
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Roberto: Engineer Lisa: Teacher
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Jeff: Lawyer
Juan: HR Manager
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Bill: Retired Shirley: Retired
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Household Income (after tax)
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$155,000
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$285,000
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$90,000 (superannuation Pension and investment income)
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Living Expenses
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$135,000
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$155,000 (including mortgage)
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$75,000
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Assets (Total assets owned by the couple)
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Home : Renting
Superannuation
$195,000 (2 accounts for Roberto and 3 for Lisa)
Cash at call: $15,500
Term deposit: $40,000 (matures 6 April 2017)*.
Car: $115,000
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Home: $2.8Million
Superannuation
$670,000
Cash at call: $35,000
Term deposit: $65,000 (matures 5 April 2016)
Share & managed funds
$225,000
Cars: $110,000
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Home $2.8 Million
Superannuation Pension
$1,550,000
Cash at call: $75,000
Term deposit: $225,000 (matures 10 April 2017)
Shares & managed funds
$350,000
Car: $125,000
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Liabilities
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Credit cards $28,000 Personal loan:$32,000 Car Loan:75,000
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Home Loan $ 320,000
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Nil
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Risk profile
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High Growth
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Growth
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Balanced
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Goals &
objectives
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Paying off debt,
saving a deposit to buy a house and
going on a skiing holiday to Japan later this year
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Paying off a home loan, saving ,
paying for private school fees and
saving for retirement
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Comfortable retirement, going on a holiday to Africa in the next 18 months and
starting a sinking fund for their grandchildren
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Assignment Questions -
IN YOUR OWN WORDS - You need to prepare a report to answer the questions below related to the 3 couples above. Your report needs to explain and discuss issues asked in the questions below and related to the 3 couples, specific circumstances.
1. Advise the 3 couples on the need for budgeting and financial planning to help meet their goals and objectives. In your answer also address the benefits of appropriate budgeting and planning and the risks of not budgeting and or planning. Be specific, relate to each of the couple personal circumstances
2. Discuss and explain the different investment strategies below highlighting their key advantages and disadvantages. Comment specifically on the suitability of each of these investments strategies to each of the clients above. Clearly explain and justify your answer.
a. investment via Mutual trust/Managed funds
b. Investment in Government and Corporate bonds
c. Use of Gearing (borrowing to invest)
d. Investment in Gold Bullion
3. Explain the concept of risk management as an important financial planning consideration and how insurance can be used in managing key personal risks. In you answer List 1personal and 1 general insurance recommendations to each of the 3 couples and explain why they should be (you need to list and explain 2 recommendations for each of the couples, 6 in total).
4. Explain why it's important to consider superannuation as part of saving for retirement and retirement palming. List and explain 2 possible superannuation/pension recommendations or strategy and explain why they would be considered by each of the 3 couples (you need to list and explain 2 recommendations for each of the couples, 6 in total).
5. Explain why it's important to consider having a valid will and an appropriate power of attorney as part of the couples' estate planning highlighting the benefits and risks as applicable. In your answer relate specifically to each of the 3 couples individual circumstances.
Report Presentation - Your report needs to be professionally presented and reader friendly.
Assignment Files -
https://www.dropbox.com/s/6z9vhonc2j6biqr/Assignment%20Files.rar?dl=0