Personal Finance Management And Investment Recommendations

Basics: age & income & specific responsibilities in life matter in the mix of assets in one’s portfolio.

As I begin my personal financial plan, I will start with my goals for different points in my life. This will outline the overall plan for getting my finances in order. Even though I may not have enough time to complete my goals, completing my goals are important because of financial well-being and being able to retire comfortably.

1. You are planning to retire in twenty years. You'll live ten years after retirement. You want to be able to draw out of your savings at the rate of $10,000 per year. How much would you have to pay in equal annual deposits until retirement to meet your objectives? Assume interest remains at 9%. [$1254]

One of the negative externalities of the Federal Reserve's zero interest rate policy to stimulate lending and borrowing has been the effect on savers and investors throughout the economic landscape. Historically low rates on CD's, bonds, and treasuries have forced investors to take on more risk in order to meet their required return on investment. Amidst this backdrop Granny Smith has a difficult task ahead of her in saving for her grandchild's college education. Financially savvy, Granny Smith has scoured the internet and found a five year CD at Ally Bank paying 1.72 percent (Bank Rate.com. 2012. PP. 1). She is reluctant to tie up her money for longer than five years given that the stated rate is actually below inflation, which in effect provides her a negative real rate of return. However, she cannot take the risk of losing her $25,000 capital in the stock market, so even if this return over the next five years is the best she can get, that will at least ensure she will have not lost principal.

a. How much must be invested today in a CD paying 8.4 percent annual interest in order to

Evaluation will be based on End-of-Topic quizzes, a midterm exam, four assignments, and a final exam as listed under “Grading Scheme” below. There is a quiz at the end of each topic/chapter. The midterm quiz covers chapters 1 to 9 inclusive and the final quiz covers the entire course. All the quizzes are True/False and multiple choice types available in Blackboard. All the quizzes are open-book but because of the limited time available to take a quiz, you must have good knowledge of the content before taking the test. You are responsible for checking Blackboard for the opening and closing dates and times of the quizzes. No extensions will be allowed.

Many professionals, young and old, are looking at investing their money in different areas. Some would choose investing on a start-up or banking it all on mutual funds. But there is one way people can invest their money for the “Betterment.”

After retirement, she wants to live a life style that will cost about $35,000 per year, payable at the beginning of each year. Her planning horizon is 30 years (i.e. she does not expect to live longer than age 95). Assume the rate of interest is 5%, all investments are made at the end of the year, and all expenses are payable at the beginning of the year. (a) How much money will she have when she retires at 65? (4 marks) (b) How much money does she need at age 65 to support her post-retirement years? (4 marks) (c) If her post-retirement expenses start as stated above at $35,000 per year but increase at the expected rate of inflation of 2% per year, how much money does she need at age 65 to support her retirement? (5 marks) (d) To reach the amount found in part (c) she is planning to invest $X this year, and increases this amount every year at the rate of 3% per year, what is this amount X? (5 marks) Answer (a) She will have FV = PMT x FVAF(5%, 40 years) = $603,998.87 (b) She will need PV of Annuity Due: PV = PMT x PVAF(5%, 30 years) x (1.05) = $564,937.58 (c) She will need PV of Growth Annuity Due: PV = [(35,000)(1.05)/(5% - 2%)] x [1 - (1.02/1.05)30] = $711,592.43 (d) She needs to have the amount calculated in (c), i.e. $711,592.43: [(X)/(.05-.03)] x [(1.05)40 - (1.03)40] = 711,592.43 X = $3,767.08

• Cash and Investments - current balances in TD chequing account and mutual fund investments of $1,000 respectively

The common question when are in our ‘youth’ days, is always about our future. Whether it’s our career or collegic plans, we don’t always know the answer. I know many of us thought the day would never come, but most of us are nearing that decision. The correct choice for us isn’t always right in front of our eyes, but we have tools to help relieve some of the stress of this decision. A student who enjoys basics math and working with people, like myself, may be interested in being a personal financial advisor. Personal financial advisors are needed to help consumers invest and plan where their money will go.

Personal Finance is the financial management which an person or a family unit performs to spending plan, spare, and invest fiscal assets over time, considering different monetary risks and future life events (Salohalla, 2011).

Find the amount that would need to be deposited monthly for a person to have $100,000 in 25 years’ time, if the initial investment is $3000 and the interest rate is 6% p.a, compounding monthly.

The author, in order to complete the report studied several texts with regards to financial management. The author also researched many useful websites and journals with regards

The assignment being completed by the author of this paper asks the author to take half a million euros and take one of two general strategies with the money. The first strategy is to invest in a pension with a life insurance company and have that be the income that pays a pension the rest of one's life and the other is to self-manage and invest the money whilst taking annual withdrawals to pay bills and otherwise live one's life. Both options will be explored but a firm choice shall be made between the two in the content of this report.

This workbook is a guide for financial planning that anyone can use for his or her own lives. David Bach gives ten steps and coaches the reader as they work towards planning for the future and “living richer”.