Financial Plan

FINANCIAL PLAN by [Name] Course Professor Institution Date Table of Contents TOC \o "1-3" \h \z \u Current Situation PAGEREF _Toc173012296 \h 4Basic Information PAGEREF _Toc173012297 \h 4Income Statement PAGEREF _Toc173012298 \h 4Balance Sheet PAGEREF _Toc173012299 \h 4Insurance PAGEREF _Toc173012300 \h 5Estate Planning PAGEREF _Toc173012301 \h 5Life Planning PAGEREF _Toc173012302 \h 6Life Values and Principles PAGEREF _Toc173012303 \h 6Life Stages PAGEREF _Toc173012304 \h 6Life Goals PAGEREF _Toc173012305 \h 7Financial Strategy PAGEREF _Toc173012306 \h 7Financial Independence PAGEREF _Toc173012307 \h 8Career Strategy PAGEREF _Toc173012308 \h 10Labour Market PAGEREF _Toc173012309 \h 10Economic Cycle PAGEREF _Toc173012310 \h 10Structural Change PAGEREF _Toc173012311 \h 10Values PAGEREF _Toc173012312 \h 10Personality PAGEREF _Toc173012313 \h 11Work Styles PAGEREF _Toc173012314 \h 11Career Goals PAGEREF _Toc173012315 \h 11Career Strategy PAGEREF _Toc173012316 \h 12Risk Analysis PAGEREF _Toc173012317 \h 12Career Action Plan PAGEREF _Toc173012318 \h 12Property and Loans PAGEREF _Toc173012319 \h 12Property Strategy PAGEREF _Toc173012320 \h 13Property Borrowing Strategy PAGEREF _Toc173012321 \h 13Risk Management PAGEREF _Toc173012322 \h 14Key Risks PAGEREF _Toc173012323 \h 14Life Insurance PAGEREF _Toc173012324 \h 14Health Insurance PAGEREF _Toc173012325 \h 15General Insurance PAGEREF _Toc173012326 \h 15Estate Planning PAGEREF _Toc173012327 \h 15Taxation Planning PAGEREF _Toc173012328 \h 15Taxation Strategy PAGEREF _Toc173012329 \h 16Investment Strategy PAGEREF _Toc173012330 \h 16Action Plan PAGEREF _Toc173012331 \h 17Compliant Statements of Advice (SoA) PAGEREF _Toc173012332 \h 17Reference List PAGEREF _Toc173012333 \h 19Appendices PAGEREF _Toc173012334 \h 21 Current Situation Basic Information I am a 24-year-old male, currently single, and a resident of China without plans to pursue Australian residency. I have no financial dependents. Presently, I am renting an apartment while studying full-time as an international student at UNSW. I am enrolled in the Master of Finance program, with an expected graduation date in 2025. I am not employed, but I own a small business—a PC game playground store in China, which generates a monthly net income of $4,000 AUD. Additionally, I am preparing to open a lounge bar to expand my business ventures further. Income Statement Category Monthly (AUD) Annual (AUD) Income Support from Parents $3,500 $42,000 Income from my gaming business $4,000 $48,000 Total income $7,500 $90,000 Expenses Rent $2000 $24,000 Food $300 $3,600 Transport $200 $2,400 Utilities $100 $1,200 Education (Fees) Covered by parents - Miscellaneous $200 $2,400 Total Expenses $2,800 $33,400 Profit/Loss $4700 $56,400 Balance Sheet Assets Current Value (AUD) Bank Account $2,000 Laptop $800 Furniture $500 Gaming Accessories $3000 Total Assets $6,300 Liabilities Current Value (AUD) Student Loan $30,000 Credit Card Debt $1,000 Total Liabilities $31,000 | Net Wealth -$24,700 Insurance Insurance Type Status “Death Cover/Term Insurance” None Total & Permanent Disability None “Income Protection” None “Home and Contents Insurance” None “Vehicle Insurance” N/A “Private Health Insurance” None “Travel Insurance” None Estate Planning I have no valid will and have not appointed any “Powers of Attorney.” Anticipated Irregular Cash Outflows Expense Amount (AUD) Timeframe New Laptop $1,500 Within two years Relocation Costs $2,000 Within one year Holiday Abroad $3,000 Within three years Property Deposit $20,000 Within five years Life Planning Life Values and Principles One of my core values is thriftiness, which I define as carefully managing my financial resources. This principle guides me to practice contentment and avoid unnecessary expenditures. For example, I buy items based on needs rather than trends or social pressures. Another key value is open-mindedness, which is crucial for understanding and empathizing with diverse perspectives (Snow, 2022). I aim to build meaningful relationships and enhance my problem-solving abilities by practising active listening and compassion. Additionally, honesty is a fundamental principle in my life. I believe in maintaining integrity in all interactions, which means being truthful even when challenging. This principle fosters trust and respect in personal and professional relationships, aligning with my long-term goal of building a reputable career in finance (Torka, 2018). Life Stages I envision my life unfolding in several stages. The first stage (24-30 years) is focused on building my professional foundation as a single worker, dedicating time to gain experience and establish financial stability. In the second stage (31-50 years), I anticipate transitioning into a committed relationship and starting a family. This period will be marked by balancing career advancement with personal responsibilities. The third stage (51-60 years) involves nurturing grown children and focusing on long-term financial goals, such as planning for retirement. Finally, in the fourth stage (61+ years), I aim to achieve “financial independence,” permitting me to enjoy a comfy retirement, pursue hobbies, and engage in community service. All stages represent personal and financial goals and accomplishments, thus providing a well-balanced and successful path in one’s life. Life Goals Considering the age range “first stage (24-30 years)”, the leading financial factors include saving $20000 for the property down payment before 30. Regarding my career, I want full-time employment for a well-established firm in the financial sector and eventually be promoted to the managerial level. During the second stage (31-50 years), the primary financial goals include buying a family home and saving for children’s education with an expectation of accumulating $50,000 by age 50. Besides, I want to acquire a top management position within my organization. For the third stage (51-60 years), I want to invest to have a steady flow of income for retirement. My target of attaining a portfolio worth $500,000 should be realized by 60. In the fourth stage (61+ years), monetary concerns will be geared at sustaining financial affairs to finance philanthropic activities, including contributing not less than $100,000 to charities in the later years of retirement. These goals are created using SMART criteria, which makes them specific goals that are both measurable and realistic so that I can map out my financial plan. Financial Strategy My strategy is to realize my financial objectives across the various phases of my life, ensuring stability and growth. In the first stage (24-30 years), my primary focus is building a solid financial foundation by saving diligently and managing expenses. Given my current situation as a student with minimal income, I plan to allocate a portion of the financial support I receive from my parents towards a high-yield savings account to accumulate funds for future investments. I aim to save $20,000 for a property down payment by the age of 30. This will be done by saving $500 monthly and the balance from any earnings from a part-time job I plan to seek once I am employed after my studies. Also, I will devote attention to giving preference to student loan repayment to avoid more long-term consequences. In the second stage (31-50 years), as I transition into a committed relationship and possibly start a family, my strategy will evolve to balance career growth with family responsibilities. I will begin by investing in “stocks, bonds, and mutual investments” to diversify my investments to balance growth and risks. Monthly deposits to arrangements like the superannuation package will be a prominent feature of this plan to develop constant investment. Also, I will invest in a family home to acquire a house valued at around $ 500,000. I need to boost my savings and consider a mortgage with a feasible interest rate to accomplish this. Also, adequate insurance cover for my family in disaster cases will be considered, including life, health, and disability insurance. In the third stage (51-60 years), my focus will be maximizing retirement savings and reducing debt. By now, I expect to have significant equity in my home and a well-established investment portfolio. I will prioritize paying off any remaining mortgage and other debts to enter retirement with minimal financial obligations. I will use catch-up contributions to my superannuation account to enhance my retirement savings and consider additional investment opportunities in real estate and dividend-paying stocks. This strategy aims to create multiple income streams to support a comfortable retirement lifestyle (Tretina and Beck, 2024). Throughout each stage, I will frequently review and fine-tune my financial plan to guarantee it aligns with my evolving goals and life circumstances, maintaining flexibility and responsiveness to changes in the economic environment. Financial Independence Achieving financial independence is a crucial long-term goal that involves strategic planning and disciplined execution. I will employ a multifaceted approach that leverages regular savings, investments, and retirement planning to build and maintain financial independence. The foundation of this strategy is consistent and disciplined saving, starting with allocating a portion of my income to high-interest savings accounts and investment vehicles. Regular contributions to my superannuation account will be essential, as will taking advantage of employer contributions and government incentives to maximize growth. Diversifying my investment portfolio across asset c...