MCS2100 Personal Financial Management
Task:
Please create a financial strategy (a.k.a. financial plan, a.k.a. financial blueprint) for the couple, by providing actionable guidance around their
(i.) spending & savings
(ii.) debt & mortgage
(iii.) tax situation
(iv.) insurance & risk management
(v.) investments. Your answers must
Be justified by quantitative metrics as well as reasonable forward-looking assumptions about interest rates, stock market returns and tax rates.
If you feel information is missing (Note: Michael & Sandra are currently not available for a follow-up interview) then make some careful assumptions and/or create contingencies.
For example, it’s not acceptable to simply write: “Michael and Sandra should consolidate their debt.”
Rather, such a suggestion should be phrased as: “Michael & Sandra would save $X in interest over the next T years, if they consolidate their debt at a rate of R%.”
In other words, avoid generalization, magazine headlines and popular clichés.
In sum, I would start by creating and reporting a family balance sheet (FBS).
Then, proceed by breaking-down your recommendations (in essay format) into the five above-noted categories, per the pentagon discussion we had in class.
