Answer to Question 1: A Computation of Savings Particulars Janet Steven Total Salary $70,000.00 $54,000.00 Dividend

6,000.00 Car loans repayment ($8000 a year for 5 year term) $8,000.00 Petrol $6,000.00 Car Register $800.00 Public Transport $2,800.00 Other expenses Food $12,500.00 Clothing $5,500.00 Medical $2,500.00 Entertainment $6,000.00 Teacher Union Membership (Janet) $1,000.00 Gifts - Birthdays/Christmas $3,000.00 Total Expenses (2) $98,400.00 Net Savings (1-2) $27,010.00 Computation of Net Income After Tax Particulars Janet Steven Total Salary $70,000 $54,000 Dividend Income $770 $410 Interest Income $230

Running head: PERSONAL WEALTH MANAGEMENT
Personal Wealth Management
Name of the Student:
Name of the University:
Authors Note:

1PERSONAL WEALTH MANAGEMENT
Table of Contents
Answer to Question 1......................................................................................................................2
A..................................................................................................................................................2
B...................................................................................................................................................5
C...................................................................................................................................................7
Question 2: Infographics..................................................................................................................9

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Answer to Question 1
A
Computation of Savings
Particulars Janet Steven Total
Salary $70,000.00 $54,000.00
Dividend Income $770.00 $410.00
Interest Income $230.00
Total Income (1) $71,000.00 $54,410.00 $125,410.00
Rent $33,800.00
Electricity $3,000.00
Telephone $2,200.00
Television $1,100.00
Insurance $1,200.00
Car insurance $3,000.00
Credit cards repayment ($500 a month for 12
months). $6,000.00
Car loans repayment ($8000 a year for 5 year term) $8,000.00
Petrol $6,000.00
Car Register $800.00
Public Transport $2,800.00
Other expenses
Food $12,500.00
Clothing $5,500.00
Medical $2,500.00
Entertainment $6,000.00
Teacher Union Membership (Janet) $1,000.00
Gifts - Birthdays/Christmas $3,000.00
Total Expenses (2) $98,400.00
Net Savings (1-2) $27,010.00

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Computation of Net Income After Tax
Particulars Janet Steven Total
Salary $70,000 $54,000
Dividend Income $770 $410
Interest Income $230
Assessable Income $71,000 $54,410 $125,410.00
Tax Payable $14,622 $9,230 $23,852
Net Income After tax $56,378 $45,180 $101,558
Computation of Savings Ratio
Particulars Amount
Savings $27,010
Net Income After Tax $101,558
Savings Ratio 0.27
The above table is displaying the computation of saving ratio. This is calculated through
dividing savings with the net income after tax. This might be observed that the saving ratio will
be 27%. This means that they have savings of 27% of earnings for accomplishing the objectives.
There are mainly two methods of raising the savings through expenses or diminishing the
payables towards the tax. The decrease of expenses might be problematic due to this includes the
modifications in the lifestyle. While on the other hand, the savings might be improved by
diminishing the tax payable through adoption of distinct tax strategies of saving tax.

4PERSONAL WEALTH MANAGEMENT
The payable amount of tax is governed majorly through the legislations of Income Tax
Assessment Act, 1997 and Income Tax Assessment Act, 1936. As per Section 8-1 of Income Tax
Assessment Act, 1997 provides that a person is permitted to claim a deduction for the expenses
that are incurred for generating of the assessable revenue. Therefore, this is essential that this
expenses are claimed that must be associated to the job. The expenses must be appropriately
documented in way that this might be claimed against the assessable income. As a result, the
strategy of reducing of tax is to claim the expenses after giving a sufficient documentation. In
this case the revised income that is taxable will be:
Statement showing Calculation of Net Income After Tax
Particulars Janet Steven Total
Salary $70,000 $54,000
Dividend Income $770 $410
Interest Income $230
Assessable Income $71,000 $54,410 $125,410.00
Allowable Dedication that can be claimed
Telephone $2,200.00
Car insurance $3,000.00
Petrol $6,000.00
Teacher Union Membership (Janet) $1,000.00
Total Deduction $6,907 $5,293 $12,200
Taxable Income $64,093 $49,117 $113,210
Tax Payable $12,377 $7,510 $19,887
Income After Tax $51,716 $41,607 $93,323

5PERSONAL WEALTH MANAGEMENT
Calculation of Savings Ratio
particulars Amount
Savings $27,010
Net Income After Tax $93,323
Savings Ratio 0.29
The implementation of the strategy of claims for the expenses through providing a proper
documentation has ended in improving the saving ratio to 0.29. This can be inferred that the
latest tactics will aid the taxpayer to save more tax on the income.
B
Diversification in the composition of the portfolio results in various types of benefits in
various other manners. A few of them involves are:
i. Protection of capital:
This aids in saving the capital or principal of the investors as a whole. This diversification might
enormously secure the savings of the investors.
ii. Reduction of the risk of loss:
If in case one of the specific investment may perform badly for a specific period but investments
may perform well for that specific period. Therefore, minimisation of the sum of loss will be
encountered.
iii. Production of good reasonable returns:

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The investors are getting a reasonable rate of return is helping the investor to generate another
source of income other than main source of income. The better returns are maintained for the
investors by generating reasonable returns in the specific period.
The course of action of diversification includes proper detecting of the risks. Blake might
accomplish the same if he is involved in the following activities below:
Across asset class
a) The investments are made all over the distinct class of assets that might consist of
securities and instruments like distinct types of properties, international shares, domestic
shares, cash and fixed interest bearing securities.
Within similar asset class
b) Within the class of asset, Blake might buy shares that are owned the companies
operating all over the various sectors and industries.
According to the current conditions, the investment portfolio of Blake consists of three
instruments that are an investment in the shares of Macquaire Group Limited, an investment
made in bonds and the savings account in a particular bank.
This is evidently observed that the diversification of investments done by Blake is not adequate
because this consist of diversification is only in across asset class however there is no
diversification in the within the asset class. Additionally, the nature of the investments of two out
of the three is very similar to each other. The similar nature investments are earnings from the
bonds and interests from the savings account in a particular bank is alike in amount and nature.
Both of this is free of any risk and the returns are very low. Therefore, the probability of making

7PERSONAL WEALTH MANAGEMENT
of higher value or returns by Blake is considerably reduced. For improving the value that is
being produced for them, in this Blake should right away choose to diversify the portfolio in the
most favourable manner. For accomplishing this objective, they are required to follow a specific
few steps:
 Decreasing the investments on the shares of Macquarie Limited by $ 10000 and use that
fund to invest in the other companies shares who in the infrastructural sector. For
example: Transurban Group, Sydney Airport Holding Limited, etc.
 They must decrease their investments in bonds and savings account by $ 5000
respectively and use that amount of fund in procurement of properties for the rental
purposes.
The investments made on shares of distinct businesses that belongs to distinct sectors will
decrease the subjectivity to risk of the volatility in companies operations and the industry in total.
Therefore, in case of the other sector is performing well and this will result in benefiting the
investors at the end through a reasonable good returns on investments.
If Blake procures a property for rental purpose, the revenues earned through this will get higher
returns than earnings from the company. Therefore, this will facilitate Blake to make a value for
the investors. This will ultimately result into efficient and effective creation of value for the
investors on their investments.
C.
Computation of FV of Current Investment
Particulars Amount

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Current investment $60,000.00
Return p.a 5%
Period 10
Future Value of Current Investment $97,733.68
Calculation showing Future value of Yearly Savings
Year Savings Amount Future Value
1 5000 $8,144.47
2 5000 $7,756.64
3 5000 $7,387.28
4 5000 $7,035.50
5 5000 $6,700.48
6 10000 $12,762.82
7 10000 $12,155.06
8 10000 $11,576.25
9 10000 $11,025.00
10 10000 $10,500.00
Total $95,043.50
Calculation of Future Value of Investment
Particulars Amount
Future value of Current investment $97,733.68
Future Value of Annuity Savings $95,043.50
Total Future Value of Investment $192,777.18
The needed savings is $ 200000 but with a plan that was already in existence which
might save a sum of $ 192777.18. The deficit might be adjusted through creating of investment
at the present rate of return. The additional investment will be needed that to be made which is
given below:

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Calculation of Further Investment
Particulars Amount
Required Savings $200,000.00
Savings that can achieved $192,777.18
Required Further investment $7,222.82
Current value of the required Investment $4,434.19
Question 2: Infographics