Corey Noltner
Financial Planning
January 30, 2015
Module 2 Assignment
Exercise 1: 1.) I have included all my assets at fair market value. I valued my house at $160,000 versus $157,500 which is what I paid for it. I valued it at a higher level due to the fact that was what the appraisal was at. I also included my employers match for my retirement accounts. I use an accrual based accounting for my own personal balance. That is also why I included the insurance as well because I anticipate the cost coming up for 2015. 2.) I have included all my debts within the liabilities section. I also included my school tuition payment under current liabilities in the other section. 3.) Yes I have included all my revenues on this. At least anything of value. Obviously there are small times where I receive gifts, but nothing of great value. I receive rent from my roommate for living in my house. He pays $450 a month and moved in around May. 4.) I have included all of my expenses for the last year. Once again I did not include gift purchases and other purchases. These are strictly monthly average over the course of a year multiplied by 12. My mortgage is multiplied by 26 due to the fact that I make a payment every 2 weeks versus twice a month. Although most of these are estimates they are very close and within 1 standard deviation of what I spend. 5.) Yes there are hidden expenses like gift purchases, but for the most part I over estimated other areas to cover those small missed expenses. A great example is the license plate fee. I included this expense because there is a line for it, but otherwise I would not have remembered it.
Solvency Ratio = TNW/TA = $132,175/$305,125 = .433
I have a high a $43% cushion as it comes to solvency. I have this due to the fact that I have made large payments towards my Loan payments. This gives me a lower outstanding