...and other will be held. Within any given asset class, a benchmark of expected performance has been performed. If the current stocks held in that class are underperforming the class in general, they should be sold and replaced with positions that better represents the asset class. Then purchasing patterns will be changed to add asset in the other classes that are currently not represented in your portfolio. The net result will be a well balance asset allocation that is representative of moderate risk tolerance. James and Lucy currently hold over one million dollars in real estate and have a relatively small equities portfolio. The Anderson’s IRAs and non-retirement assets are concentrated in small and mid cap growth and cash. RECOMMENDATIONS James and Lucy have a significant income and monthly net cash flow. We recommend that you begin contributing to your retirement and non-retirement accounts...
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...Lesson 13: Investing in Mutual Funds What is a mutual fund? * A mutual fund is a professionally managed pool of money invested in stocks, bonds and other securities. * By purchasing mutual funds, small investors can easily diversify their investments and enjoy the benefits of professional management. * Investors own units or shares in the fund and benefit proportionately from any increase in value and/or income earned by the investments owned by the fund. The Reasons Investors Choose Mutual Funds | Mutual funds have grown in importance in Canada over the last twenty-five years. As of February 2008, there were 2,038 mutual funds with a total worth of nearly $679 billion – up from only $3.5 billion in 1981.The two major reasons investors choose mutual funds are: 1. Professional management - although there is no guarantee that the fund will outperform the market. 2. Diversification - by asset class (i.e. by holding a mix of stocks, bonds and money market investments) or within each asset class (i.e. by holding a variety of securities within each class). The risk of mutual funds arises from the risks associated with the investments they hold. * For example, a bond fund will be subject to interest rate risk – as interest rates rise, the value of the bonds owned by the fund will decline. | Mutual Funds With and Without Loads A load is a sales commission. In a load fund, the investor pays a commission every time he or she buys units (front-end load)...
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...FINAL 1. Financial Planning What are the three most valuable concepts you learned about the financial planning process? What actions will you take in your personal life based on what you have learned? Financial planning is a systematic process that considers the important Elements of an individual’s financial affairs in order to fulfill financial goals (Pg.5). The financial planning process involves six steps translating Personal financial goals into specific plans and strategies, and implements them and then uses budgets and financial statements to monitor and evaluate and revise plans and strategies as needed. The three most valuable concepts that I learned about the financial planning process include defining goals, creating a plan, implementing plan through action, and evaluation. They that time that it is impossible to an actively manage your Financial Resources without financial goals. Defining goals is Crucial after defining these goals you must formulate and develop plans and strategies in order to reach these goals. These plans goals strategies all need to remain realistic and attainable. It’s important to consider priorities and can raise them into long-term and short-term goals. Ann’s and strategies which to me is the most difficult because it requires control and monitoring. Spending money wisely and would be an example of implementing financial plans and strategies in order to reach financial goals. 2. Credit In what ways do you use credit...
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...life and financial goals. This proposal will address the action plans from several key and fundamental financial aspects, namely, insurance and risk management, savings and investments, education planning, retirement and estate planning and also, tax planning. The action plans and recommendations shall act as a guide in assisting Mr. Tom Ho to achieve sufficient financial protection, lower tax burdens, increased investment (passive) income, good retirement planning and also proper estate planning. The financial plan outlines all the financial planning and strategies that are designed and developed to: • Help to set aside an emergency fund preparing the client for unfortunate events and mishaps. • Provide client with budgeting plan and cash flows planning to support client and family's current lifestyle. • Help client in accumulating sufficient retirement funds to support him and his spouse's retirement lifestyle and needs. • Establish a profitable investment portfolio with balanced assets allocation according to client's risk profile and prospect analysis report. • Assist client in reducing client's tax burden by utilizing tax reliefs and other tax savings methods and strategies. • Distribute client's wealth by using appropriate estate planning tools and strategies when client departs. • Reduce and settle out housing loans, car loans and credit card loans. • Assist client in accumulating sufficient funds to support children's tertiary...
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...1/1.05^5=1,600/1.2763=1253.62 $2,473.10 2. Gathering information in different types of planning in a comprehensive financial plan you will need the following: -Retirement planning your will need what is the goal of the person, what does the person is looking for when they retire. You need to gather all the resources the person has that is money or will be money in the future: savings, investments, real estate, etc. A person needs to take into consideration things that might affect the retirement plan; inflation of rates, buying a retirement home, cars, long trips and rates of return. -Estate planning you need to know who will be receiving your estate upon your death. You will need the wills and trusts of the person. You need to know what are the wishes of the person for their estates, how is distributed. -Risk management, the person needs to know what are the household feelings of risk and how much they are willing to take. You need assets and estimate the risk of each asset for the household and avoiding or controlling the risk. -Employee benefits you will need to know the company benefits, health insurance, life insurance and retirement savings plans and any other alternatives. You need the entire description of the company benefit s. -Family planning you need to know the amount...
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...Family Owned Business Estate Planning In this case study, as John’s financial advisor, I have been tasked with reducing, or eliminating the potential estate tax burden of John’s estate. Additionally, I am tasked with maximizing the amount of wealth transferred to John’s heirs. John, age 61, is married to Jane, age 60. He owns Victory Company, a family business professionally valued at $5.6 million. He and Jane have three children and seven grandchildren. One son, Paul, manages Victory Company and will someday own it. John's overall wealth is about $15 million. This includes the $5.6 million value of Victory Company, which nets $1.5 million before tax and after paying John a $300,000 salary plus liberal fringe benefits. After taxes, John earns about $400,000 to $600,000 more per year than he and Jane spend. The balance of John's wealth includes two homes (a main residence and a vacation home) worth a combined $2.7 million; $1.7 million in his 401(k) plan; cash assets and a stock and bond portfolio totaling $1.8 million; $2.9 million in income-producing real estate; and $300,000 in sundry assets. There also is $6.2 million in insurance on John's life that is now owned by an irrevocable life insurance trust (ILIT). This insurance includes a $1.2 million whole life policy and $5 million in 10-year term insurance with six years remaining in the term. Business This first thing I need to get a handle on is John’s company. The $5.6 million value of Victory Company represents over...
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...of Phoenix Material Retirement and Estate Planning Worksheet Retirement Planning Step 1: Estimate your retirement income at: http://www.bankrate.com/calculators/retirement/retirement-plan-income-calculator.aspx You will be asked to answer six questions. If you are unsure of what the fields are, the definitions are below on the same page. There are some assumptions about how much your investments will earn, inflation rates, and tax rate; you can edit these to see how they impact the calculation. • Based on your inputs, what is your estimated monthly retirement income before tax/inflation? • Based on your inputs, what is your estimated monthly retirement income after tax/inflation? Step 2: Determine how your current retirement strategy will provide for retirement income: http://www.bankrate.com/calculators/retirement/retirement-plan-calculator.aspx You will be asked to answer eight questions. If you are unsure of what the fields are, the definitions are below on the same page. There are some assumptions about how much your investments will earn, inflation rates, and if Social Security income is considered; you can edit these to see how they impact the calculation. • Based on your inputs, how much monthly income is your current strategy estimated to provide? • Assume that monthly income will not be sufficient. In at least 100 words, what steps can you take now and/or in retirement to live comfortably in retirement? Step 3: Calculate...
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...topics covered in your plan for easy navigation (heading outline provided below). * As always, carefully proofread and spell check before submitting your final draft. * I DO NOT GRADE ON QUANTITY BUT RATHER QUALITY OF WORK. Nevertheless; this is you FINAL PROJECT (worth 15% of your total class grade) and all points must be THOUROUGHLY addressed. * If you have questions, do not hesitate to ask me. Please use the following prompts as the headings for your financial plan: Part 1 – 10% -Overview: Review exhibit 1-1 in your textbook (page 5) and describe your life stage. In addition, review your financial goals. If necessary, refine and/or expand your goals so that they address key issues from your current age through post-retirement age. Please make sure that your goals meet the S.M.A.R.T goal-setting guidelines in your textbook. Specifically address areas where you perceive there may be tension between current goals and longer-term goals. For example, living in the...
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...Wills, Trusts & Estates Prof Blog http://lawprofessors.typepad.com/trusts_estates_prof/ Wills, Trusts & Estates Prof Blog Editor: Gerry W. Beyer Texas Tech Univ. School of Law A Member of the Law Professor Blogs Network Sponsored by Wolters Kluwer Wednesday, September 10, 2014 The Changing Seasons of Financial Planning By Gerry W. Beyer Share Just as there is a spring, summer, fall and winter, there are also four financial seasons of life that include accumulation, preservation, distribution and succession. Approaching your finances with these four seasons can help keep you on track to reaching you long-term goals. 1. Accumulation Season. This is the longest financial season and the time spent accumulating wealth sets the foundation for your entire life. This is an important stage to set your financial goals and save and invest wisely. 2. Preservation Season. During this time, it is important to protect the money you have worked hard to accumulate so you can depend on it during retirement. This is the time to begin assessing your risk tolerance and perhaps become more conservative with investment dollars. 3. Distribution Season. Income planning is critical during this season, as you determine how to make the most of your financial savings. Consider your tax liabilities in retirement and the order from which you withdrawal from your retirement savings. 4. Succession Season. You must consider what will happen with the remainder of your life savings after you pass...
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...Personal Financial Planning The number one goal of Century Management is to assist our clients in the attainment of financial security through financial planning and money management. The financial planning process combines planning with ongoing advice to help each client make certain that the total financial picture is constantly being evaluated with respect to changing conditions. We make specific recommendations that are designed to provide more efficient use of the client's growing resources, to improve net worth, to reduce income and estate taxes, and to increase after-tax cash flow. A fact-finding session helps us become totally familiar with your current financial situation, as well as your personal goals and priorities. Working from the comprehensive information gathered in the fact-finding session, a detailed financial plan is prepared which documents your current situation, identifies all areas that will be impacted, and makes specific goal-oriented recommendations. Recognizing our ever-changing tax environment, we also work to assure that you are positioned in the most effective manner relative to your personal tax situation. Each recommendation in our analysis is then thoroughly reviewed with you to confirm your understanding and support of each recommendation. If desired, we actively assist in the full implementation of every plan recommendation in conjunction with the other members of your financial advisory team. The following example is a combination...
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...QUARTERLY NEWS AND TOOLS FROM TIAA-CREF | SPRING 2005 Three Steps To Improve Your Financial Planning Understand your savings and investment habits Create a winning budget Find the right retirement product for your needs What’s the future of Medicare? COMMENT BERT SCOTT Designing Products to Meet Your Financial Needs T hroughout our 87-year history, TIAA-CREF has been an innovator in the retirement investment field. We created the variable annuity, pioneered the use of real estate and foreign investing in pension plans and helped bring inflation-linked bonds to America. But stay tuned; there’s more to come. As the leader of TIAA-CREF’s Product Management area, I am proud to be part of the team that will be bringing you our newest products and services. At Product Management, TIAACREF’s “manufacturing” center, top-notch professionals develop new investment and insurance products and make sure those we already offer are still working for you. In a continually changing financial services marketplace, our mission remains simple: to provide the tools you need to help reach your financial goals. A large part of our work involves listening to you. This enables us to know what you need now, and what you may need down the road. So we begin the product design process by asking questions: What do you, our clients, want to accomplish? ■ How will those goals change over time? ■ What do you like about what’s currently available to you? ■ What do you need that we don’t offer...
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... Benefits, Medical insurance. The ability to live comfortably What is necessary to get there?- finish school and obtain a business degree. Get a better paying job abd work my way up. Invest wisely and purchase affordable medical insurance. 3. Action Plan I will need to finish school and obtain my Bachelor’s degree. Get a job with a company that offers a 401K. Establish a savings account that gains interest. Also invest in an IRA for retirement purposes. 4. Importance of retirement planning. It is super important to plan for retirement. Social security only supplements your income while you are retired. You need to plan accordingly, so you are not left financially unstable in your end stages of life. If you are able, you should also have employment that offers payment while you are retired. 5. What effect will federal and state taxes have on estate planning? What will you do to prepare? You will need to prepare accordingly so you are able to pay taxes. You have to pay taxes if you buy, sell . or inherit any estate. You will need to make sure you set enough money aside to pay all of the taxes. Have a savings account. Or if necessary, when borrowing money to purchase, borrow extra to cover expenses. If selling, sell for a higher amount to cover the...
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...1. Define investing and speculating. The main difference between speculating and investing is the amount of risk undertaken in the trade. Typically, high-risk trades that are almost akin to gambling fall under the umbrella of speculation, whereas lower-risk investments based on fundamentals and analysis fall into the category of investing. Investors seek to generate a satisfactory return on their capital by taking on an average or below-average amount of risk. On the other hand, speculators are seeking to make abnormally high returns from bets that can go one way or the other. It should be noted that speculation is not exactly like gambling because speculators do try to make an educated decision on the direction of the trade, but the risk inherent in the trade tends to be significantly above average. As an example of a speculative trade, consider a volatile junior gold mining company that has an equal chance over the near term of skyrocketing from a new gold mine discovery or going bankrupt. With no news from the company, investors would tend to shy away from such a risky trade, but some speculators may believe that the junior gold mining company is going to strike gold and may buy its stock on a hunch. This would be speculation. As an example of investing, consider a large stable multinational company. The company may pay a consistent dividend that increases annually, and its business risk is low. An investor may choose to invest in this company over the long-term to make a...
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...clients achieve their goals and dreams, whether it’s living in luxury, providing charitable contributions and/or leaving a legacy for family and friends; consult and advise clients how to best save and structure their investments to reach their goals. 1. What would your specific goals be for new assets under management? a. Year 1 – 10 Million of Assets Under Management ( 10 qualified contacts per day, 1-2 new accounts per week ). b. Year 2 – 20 Million of Assets Under Management ( 20 qualified contacts per day, 2-3 new accounts per week ). c. Year 3 – 30 Million of Assets Under Management ( 30 qualified contacts per day, 3-5 new accounts per week ). 2. What would your value proposition be to a prospective client? Financial planning will become a more important part of financial advisors' value proposition as regulators in key financial markets draft legislation that requires financial advisors to act as fiduciaries with all clients, and wealth management firms seek to...
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...resources that have been set aside to pay for the pension obligations are not enough. The pension crisis is mainly caused by the factors explained below; Firstly, rapid growth of the ageing population as a result of couples postponing child bearing coupled with the general decline in the rate of birth per couple. Consequently, the working-age population decreases hence the taxes collected to cater for the pension payments. As a result the government system of pay-as-you-go becomes unsustainable. Secondly, the crisis is caused by longer lives of people sue to medical improvements thus consuming pensions for a longer time. Thirdly, a shift in prioritization of targets that are short-term like travel and purchasing of houses over planning for retirement among the young working population is also a cause for the pension crisis. Fourthly, the mounting pressure on governments for tax reduction and the competing demands for government expenditures reduce the available funds to sustain the pensions. Lastly, over optimistic returns forecasts by the managers of pensions and the declining performance of stock markets reduce the returns of the pension’s investments. This is because the pension funds are invested in different assets like bonds and stocks and...
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