Develop a personal financial plan detailing the financial goals for purchasing a home, saving for retirement, buying a car, and saving for their child's college fund.
Stage 1: Analyze your personal financial situation using appropriate financial tools.
-Family A makes $50,000 a year and has a wife and one child.
-Family A would like to save towards retirenment to retire at 65. They are 25 and 23 with a 2 year old.
-For retiernment they would like to have $2,000,000 saved up
-They need a new car that is an SUV for around $30,000 and would like to spend $5,000 towards the down payment or finance the whole amount of the loan for their car but are unsure of the better deal.
-They would also like to save for their child's college fund to be paid out when the child reaches 18.
-They have 3 banks that they would like to open up with but aren't sure on which one would pay out the better interest rates for savings. Their options include: Bank of America, Wells Fargo, and USAA Federal Credit Union.
-They currently have $10,00 in their savings account.
-They would like to ensure they have the proper housing insurance, health insurance, and dental insurance
-They would also like to invest long-term into stocks, Google, Apple, Microsoft, Coke, Disney
Stage 2: Identify short-term, mid-term, and long-term goals. Rank your goals in order of importance as they relate to the financial resources available and expected. Estimate the financial commitment for each goal.
-Short-Term: Buying a car, Finding a bank
-Mid-Term: Buying a house
-Long-Term: Retiernment, Child's college fund, stocks
Stage 3: Consider all factors we have covered in class, including budgeting, time value of money, asset protection, debt/credit, savings, investing, and estate planning.
Paper must have:
-12 Total Pages
-3 references with a reference page
-Cover Page -Contains graphic/illustration, name of project, your name, course name, and semester; creativity is evident
-Table of Contents -Heading, sections clearly labeled with leaders and page numbers
-Career Planning -Describe life situation providing details related to marital status, children, occupation, and income. Investigate career. Determine annual salary. Include job advertisement.
-Financial Goals -Clearly written; contains at least two short-term financial goals and three long-term financial goals
-Banking Services -Well written, clearly explains services provided at various institutions (at least three), materials provided (from at least one), institution and services you will use are identified, justification is provided for choice of institution and services
-Housing Decision -Information and materials provided on investigation of housing options available, choice is explained in detail, sources of credit are explained and your selection is identified and explained in detail, monthly expenses related to your decisions are provided
-Automobile -Information and materials provided on investigation of auto options available, choice is explained in detail, sources of credit are explained and your selection is identified and explained in detail, monthly expenses related to your decisions are provided
-Insurance -Detailed description of types of insurance you need, materials provided, explanation of types and providers and why you made these choices, monthly expense related to your decisions are provided
-Investments -Detailed explanation and investigation materials of different types of investments, justification for your selection of at least two types of investments, detailed explanation of expenses and risk associated with the investments selected
-Monthly Budget -Detailed monthly budget which includes income and expenses (reduce income for taxes using the following: 10%: $2,651 - $9,700, 15%: $9,701 - $30,800, 25%: $30,801 - $68,500, 28%: $68,501 - $148,700, 33%: $148,701 - $321,200, 35%: $321,201 and up), detailed explanation of whether budget will allow you to meet your financial goals (see above), explanation as to whether or not you had to make changes to have a zero or positive balance.
This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.Introduction
This report presents the financial planning which has been done for a family based in Georgetown, Arkansas. The family comprises of a 25 year old male and a 23 year old female who have two children aged 3 years and 2 years respectively. The investment objectives and constraints were used to develop the financial plan for the family.
The family of four comprises of one working male who is married. His wife is a home maker who takes care of the two kids. She does not plan to pursue any job in the long run and wants to engage in social activities. They do not plan to have any more kids so that they can support these two kids in the best manner. The current annual income of the male is $50,000 which is also the annual income of the family. The male possesses an MBA from a good institution and this being his first job coupled with economic recession, the salary is low. It is expected that in a time span of 3 years, his salary will double to $100,000 when he takes work experience from his current employer and moves to a top investment bank in New York. After that, it is expected that his salary would grow at the average rate of 10% per annum.
The male is 25 years old now and expects to retire at the age of 65, which means that he would be working for 40 more years now. By the time he would retire, his salary is expected to reach to the levels of $3 million. However, the family wants to maintain the same standard of living (or even better) and the expenses would also accordingly increase. They have a moderate propensity to bear risk. Therefore, even though their investment horizon is long term, they want to refrain from investing in high yield bonds and small cap stocks. They do not want to invest in derivatives also and want to insure their home and medical expenses. They do not want to take bank loans for the purposes of leveraging their asset portfolio and use leverage in their portfolio due to their moderate propensity to take risk. Due to their approach, their credit rating is also very high (745 points) which would help them to take loans at attractive rates.
Depending on the time frame...