Fact Finding scenario: Assessment 1 assignment writing service

Bill and Eve Lee provide you with the following information from their Fact Finder and they have emailed you.

 

1. Age, income & dependents.

 

Age:    Bill 40 years

Eve 39 years

They will be married 15 years in April 2007.

 

Income: Bill $85,000.  He is a Marketing Manager.  His Income after work related expenses and income tax is $65,750.                     

Eve $30,000.  her income after work related expenses and tax is $26,625.  She is a part time teacher who is thinking of returning to work full time (salary would be $50,000).

 

They have two children – Paul 12 years old who will attend Secondary School in 2007

– Wendy 7 years old who will be in grade 2.

Objectives:

• To match expenses with income so that they can effectively save
• To fund an $18,000 renovation to their house …the children need more room.
• To increase the level of savings so as to meet the educational needs of their children and other financial needs the family may have from time to time.
• To increase the level of investments so that they have additional sources of capital (assets) and income to meet their future retirement needs and funds.

 

1. Expenditures (per annum):

 

Food, groceries                       $20,000

Power, electricity & water       $2,500

Rates – council, water                        $1,500

Clothing                                   $3,500

Telephone/internet                  $2,000

Medical insurance                   $3,250

Home Insurance incl

Public liability                        $1,500

Education – Wendy                $1,000

– Paul                     $8,000 (he will attend a Private School)

Holiday                                    $4,000

Entertainment                         $4,000

Children’s related

entertainment expenses      $2,000

Motor Vehicle:

• Bill has use of an employer owned car for business use only.
• Eve owns a (value $10,000) that costs $3,500 in registration and running expenses.

 

Insurance:

• Bill has Life Insurance (incl. sickness cover) $1,200 pa Premium.
• Bil has PTD cover $800 pa Premium.

 

Repayment of credit card debt is estimated to be $1,500 (including interest).  Currently they owe $1,000.

House repayment incl interest (Mortgage)     $14,300 (The original home loan, 15 years ago, was $150,000 over 20 years – or $7,500 in home loan repayments each year.  Interest is $6,800 per year for a total of $14,300).  They still owe $37,550 of the original home loan.

 

Contribution to Superannuation:

Both contribute 12% to Superannuation in addition to their employer contribution.

 

1. What they own and what debts they have:

 

House – joint ownership          $400,000

Home contents                       $28,000

 

Superannuation:

Employer worksuper scheme:

– Bill                 $125,000

– Eve               $30,000

 

Managed Fund investment

Bill                         $50,000 (income growth of 4% reinvested & 5% growth)

Equity investment

Jointly inherited in July 2013        $30,000.

 

Mock interview to be conducted in class:

 

Discuss with the clients the following details

 

1. Calculate the joint Net Income of Bill and Eve.
2. Calculate the joint Net Worth of Bill and Eve.
3. Is any significant item of expenditure or income been omitted in your view?
4. Are there any hidden ‘agendas’ or needs that you can identify?
5. Identify their short, medium and long term goals.
6. Prioritise the goals you have identified in Q5 above.
7. Comment on whether in your opinion they are able to meet these goals. Why/why not?
8. Advise on the client’s requirements for a successful retirement (Prepare a strategy to discuss with the client and why it is in their best interest to follow your strategy.

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