ii. Discuss four reasons for a policy statement in Financial Investment. iii. A 40-year-old civil servant client of yours is 20 years away from retirement; A 35-year-old self-employed also needs an investment policy statement. In writing their investment policy statement how might their investment policy statements differ.

ii. Discuss four reasons for a policy statement in Financial Investment. iii. A 40-year-old civil servant client of yours is 20 years away from retirement; A 35-year-old self-employed also needs an investment policy statement. In writing their investment policy statement how might their investment policy statements differ.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter14: Planning For Retirement

Section: Chapter Questions

Problem 2FPE

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A 40-year-old civil servant client of yours is 20 years away from retirement;A 35-year-old self-employed also needs an investment policy statement. Inwriting their investment policy statement how might their investment policystatements differ.
A 40-year-old civil servant client of yours is 20 years away from retirement; A 35-year-old self-employed also need an investment policy statement. In writing their investment policy statement how might their investment policy statements differ?
Suppose you are 28 and married. You and your spouse file for income taxes jointly. You are in the 25% tax bracket. You are considering a few personal investment issues. Suppose you expect a significant career or family change in three years, which requires substantial initial capital commitment (e.g., starting your own business, relocating abroad, buying a house, children going to college, etc.). Which of the following seems to be the most appropriate investment strategy? a.Take a loan to buy an investment condo. b.Use your savings to buy a small number of stocks that you believe to rise in price. c.Use your savings to buy well-diversified stock mutual fund shares. d.Use your savings to buy well-diversified bond mutual fund shares.
You are a financial advisor working with a client named John. John is a 35-year-old professional earning a gross monthly income of $7,000. He has recently received a significant raise and is determined to make the most of his newfound financial stability. However, John has a complex financial situation, with various financial goals, expenses, and debt obligations. He seeks your advice on how to optimize his financial situation, achieve his goals, and make wise investment decisions. John's Financial Goals and Information: Retirement: John aims to retire at the age of 60 and wants to maintain a comfortable retirement income of $60,000 per year (adjusted for inflation). Emergency Fund: John wants to establish an emergency fund that covers at least six months of his living expenses. Debt Management: John has outstanding student loans totaling $50,000 with an interest rate of 6% and a remaining term of 10 years. Homeownership: John plans to buy a house within the next five years. He…
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Consider the following scenario in relation to your Notary, Loan Signing Agent and Marriage officiant practice in Hawaii and determine the opportunity cost of leaving your job to become an entrepreneur. You currently make $90,000 per year at your job plus benefits (equal to 30% of your salary). On January 1 of the New Year, you start your own business. After the first year, your accountant informs you that you made $45,000 and out of that you paid $6,000 for health insurance. What was your opportunity cost? If your opportunity cost is higher than you would like, how can you lower your opportunity cost in the future years?
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Review the following scenario. Use the information provided to answer questions about the taxpayers’ 2020 return.Chris (45) and Allison (46) Castillo are married, and they will file a joint return. During the year, they earned $82,500 in wages. They also had investment income consisting of: $200 interest income from a savings account with their local bank, reported on Form 1099-INT. $350 interest income from a certificate of deposit held with another local bank, reported on Form 1099-INT. $250 interest income from a U.S. Treasury note, reported on Form 1099-INT. $500 tax-exempt interest income from a municipal bond investment, reported on Form 1099-INT. $1,700 in ordinary dividends from a mutual fund investment, reported on Form 1099-DIV. They had no other income. Question 1 What amount will Chris and Allison report for taxable interest on their Form 1040? The couple's partially completed Form 1040, page 1, is shown below. You may use the form to assist you in answering this…
Review the following scenario. Use the information provided to answer questions about the taxpayers’ 2020 return.Chris (45) and Allison (46) Castillo are married, and they will file a joint return. During the year, they earned $82,500 in wages. They also had investment income consisting of: $200 interest income from a savings account with their local bank, reported on Form 1099-INT. $350 interest income from a certificate of deposit held with another local bank, reported on Form 1099-INT. $250 interest income from a U.S. Treasury note, reported on Form 1099-INT. $500 tax-exempt interest income from a municipal bond investment, reported on Form 1099-INT. $1,700 in ordinary dividends from a mutual fund investment, reported on Form 1099-DIV. They had no other income. Question 1: What amount will Chris and Allison report for their total income on Form 1040? You may refer to the couple's partially completed Form 1040, page 1, which is shown below, to assist you in answering this question.…
Answer the following problems and explain it step by step: 1. A man who is 30 years old at the start of the year, is considering getting an MFM degree. He currently earns $40,000 per year and expects to continue earning that amount for the rest of his working life (until age 65). He will give up his income for two years and will pay $20,000 per year in tuition, if he attends business school. In exchange, he expects a raise in his salary after completing his MFM. Assume that the post-graduation salary grows at a 5% annual rate and that the discount rate is 8%. What is the minimum expected starting salary after graduation for him that makes attending business school a positive-NPV investment? (Assuming that all cash flows happen at the end of each year.) 2. Bob and Rose are both 62 years old and plan to retire in 3 years. They will receive $5,000 per month after taxes from pension plans and $1,000 per month after taxes from Social Security after retirement. Regrettably, their living…
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