Financial Planning Project: Analyzing Baxter Couple's Finances

This financial planning project presents a comprehensive analysis of the financial situation of Mr. and Mrs. Baxter. It begins with an introduction, current scenario, and personal details, followed by their financial objectives, which include purchasing a house, taking a holiday, and planning for retirement. The project includes a detailed cash flow statement and balance sheet from 2019 to 2023, along with an accumulated superannuation calculation. It assesses their risk profile and current financial situation. The project concludes with specific recommendations, including investment strategies, debt management, and retirement planning, to help the Baxters achieve their financial goals. The project also provides a covering letter and executive summary to outline the key findings and advice.

Running head: FINANCIAL PLANNING
Financial Planning
Name of the Student:
Name of the University:
Author’s Note:

1
FINANCIAL PLANNING
Table of Contents
Covering Letter................................................................................................................................2
Executive Summary.........................................................................................................................4
Introduction......................................................................................................................................5
Current Scenario..............................................................................................................................5
Personal Details...............................................................................................................................6
Objectives........................................................................................................................................8
Cash Flow Statement.......................................................................................................................9
Balance Sheet.................................................................................................................................10
Accumulated Superannuation........................................................................................................11
Risk Profile....................................................................................................................................13
Current financial situation.............................................................................................................14
Recommendations..........................................................................................................................15
Bibliography..................................................................................................................................18

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FINANCIAL PLANNING
Covering Letter
To Damian and Kathryn Baxter
10/1553 Point Nepean Road
Capel Sound-3940
Dear Damian and Kathryn,
I would like to show my deepest gratitude for giving me the honour of providing you with my
service and the advice that would be possible for me with the help of which effective level of
financial consultation can be provided on our behalf. I am happy that you have accepted my
offering of meeting up and having a face to face interview with the help of which I can
understand the needs and desires that you have and accordingly provide you with the service that
would be helpful for your future financial development. The advice that would be given would
be based on the data you have given to me and the advices that I would provide would be
seriously be effective for you. My advices would be helpful to you both in making any kind of
future investments that would be helpful in the development of a better retirement plan. The
investments would even provide you with returns that would be effective and accordingly a
better future life for your family can be ascertained.
The information that I have received from the fact finder table and the answers related to the
investment concerns have been helpful for me in creating an understanding of your desires and
accordingly prepare a Statement of Advice for both of you. The Advice report would act as a
record and a guideline that can be looked down upon at any point of time in the future with the
help of which better investment decisions can be undertaken and the goals and the desires that
you wish to attain would be accomplished. I would even inform you about the interests and the

3
FINANCIAL PLANNING
fees that would be levied on the advice that would be provided to you and in that manner better
understanding among each other can be accomplished.
I would even like to inform you that our relationship as a being the financial consultant would be
long term as I would be by your assistance even in the future and accordingly a better and safe
lifestyle can be maintained. Therefore I would be looking forward to be in your help at any point
of time and would be there to provide you with the help and assistance with the help of which
sustainable services can be provided. I would like to ensure that the advices and the
recommendations that will be given from our end will be on the basis of the guidelines that have
been put forth by ASIC.
Regards
Chris Simmons
Signature
Financial Consultant

4
FINANCIAL PLANNING
Executive Summary
The executive summary consists of the insight that would be assistive in the development
of an action course that would be helpful in the development of the ideas and the strategies that
would be effective enough in the development of a clear understanding of the advices and the
recommendations that would be given to them. The summary is looking to explain the current
scenario and in this manner assist the client in creating a plan that would lead to the attainment of
their current and future goals and objectives. The optimum outcome that can be provided to Mr.
and Mrs. Baxter would be based on the implementation of the strategies that would be
recommended to them. The client are in need of ideas and knowledge and therefore after reading
the summary the client would be able to undertake effective level of investment and accordingly
create strategies and plans with the help of which the client would be able to understand the
investment opportunities and risks. The fees and the charges that would be levied is even
explained and thereby an understanding of the recommendations can be attained. The
suggestions will be given on the basis of a precise and clear language and accordingly extensive
level of financial knowledge can be attained.

5
FINANCIAL PLANNING
Introduction
The initial section comprises of the elements that would be explained in the Statement of
Advice and accordingly would provide the results and the recommendations that would be
helpful in the attainment of the objectives and the goals with the help of which the client would
be able to reach their financial goals. The statement has even looked to explain the segments like
the calculation of the superannuation, the cash flow statement, balance sheet construction and
financial planning with the help of which effective level of future planning can be constructed. It
is seen that estate planning as well as the retirement planning of the couple is even provided with
the help of which the clients would be able to plan their future life in a cordial and effective way.
The clients are even made conscious of the risks and the problems that may face in the future
course of time and accordingly would be helpful for them in making use of contingency plans
that would reduce the level of risks.
Current Scenario
The current scenario of the couple suggests that in the current time period the couple
have effective level of combined salary and currently are having a life that is comfortable. They
feel that they are not able to save adequate money. They are expecting a child and therefore they
are looking to save adequate money with the help of which they can have a safe and secured life
in the future and can even take care of the future life life of their child. They are even looking to
purchase a house within 3 years and accordingly can construct plans in an effective manner.
Kathryn will not be working after the child is born and she would be working after 2 years after
the birth of her child. The couple are even looking for an effective level of retirement planning
with the help of which they would be able to save sufficient amount of money with the help of
which they can have a safe and secured lifestyle.

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FINANCIAL PLANNING
Personal Details
Client 1 Client 2
Title Mrs Mr
Surname Baxter Baxter
Given Name Kathryn Damian
Salutation Mrs Mr
Home Address 10/1553 Point Nepean Road
Capel Sound-3940
10/1553 Point Nepean Road
Capel Sound-3940
Business Address Not applicable Not applicable
Contact Phone NA NA
Marital Status Married Married
Age 30 30
Health Good Good
Employment
Status
Employed (full-time) Employed (full-time)
Occupation Marketing Assistant Chef
Employer NA NA
Sex Male X Female X Male Female
Smoker Yes X No Yes X No
Anticipated
Retirement
NA NA
Item Cost and year
of
purchase
Expected value
‐
30.6.2018
Owner Net return

7
FINANCIAL PLANNING
Contents $65,000 $55,000 Joint Nil
Cars $29,000 March $25,000 Damia
n
Nil
2016
$14,000 June $10,000 Kathry
n
Nil
2014
Shareholding:
‐ NAB Bank 2,000
shares
$20,500 ‐
March 2007
$59,000 Damia
n
Fully franked
dividend of 4% p.a.
of current
value
Savings account
with NAB Bank
Closing balance
of $53,000
Damia
n
1.5% p.a.
Term deposit –
NAB
1 year
rolling
deposit
$85,000 Damia
n
3.2% p.a.
Superannuation
‐balanced fund
$85,000 Damia
n
5.0% p.a. (net of fees
and taxes)
Superannuation
‐growth fund
$58,000 Kathry
n
7.0% p.a. (net of fees
and taxes)
Item Owner Amount
outstandin
g
Annual repayments –
includes principal and
interest
Interest
rate
Personal car loan
‐9 years
Damia
n
$2,220 $2,400 (Last payment on
30/06/2019)
8%
Credit card Joint $3,000
(averag
e
monthl
y
balance)
Paid in full each month
by due date so normally
no interest is charged
16.5%

8
FINANCIAL PLANNING
Objectives
The goals and the objectives of the client has been explained as follows:
 The couple wants to purchase a house within 3 years from now with the help of which
they can have a better lifestyle. The couple wants to purchase the house in the year 2021
within July.
 They even wants to go on a holiday on August 2018 and they want to so the same in
order to go for the same before the birth of their child.
 Kathryn is looking to enter the workforce in the year 2021 with a salary that would be
$42,000 and a part time work.
 Construct sufficient amount of wealth at the time of retirement within their
superannuation fund at the time of retirement and the expected retirement age has been
62 years.
 They anticipate that they would be requiring a real income that is combined of $60,000
yearly in the present value of the dollar
 The couple would even look to undertake an investment plan that would be helpful in
order to manage.
 They even want to reduce their extent of tax liability in order to increase their level of
income
 The couple are looking to mitigate their extent of debt as fast as possible.
 The investments that they want to undertake should be balanced so that the risk profile
would be suitable and the investment would be of appropriate quality

9
FINANCIAL PLANNING
Cash Flow Statement
In accordance to the current scenario, it is seen that the cash flow statement has been
provided that would comprise of the years 2019 to the year 2023. The table is given as follows:
Statement of Cash flow for 2019 to 2023
Particulars 2019 2020 2021 2022 2023
Cash Inflow
Salary of Damian Baxter
$78,000.
00
$80,340.
00
$82,750.2
0
$85,232.7
1
$87,789.6
9
Salary of Kathryn Baxter $0.00
$42,000.0
0
$43,260.0
0
Dividend
$2,360.0
0
$2,360.0
0 $2,360.00 $2,360.00 $2,360.00
Interest $795.00 $970.20 $1,200.13 $2,633.08 $3,453.24
Term Deposit
$2,720.0
0
$2,720.0
0 $2,720.00 $2,720.00 $2,720.00
Gift
$80,000.0
0
Superannuation balance fund
$4,250.0
0
$4,250.0
0 $4,250.00 $4,250.00 $4,250.00
Superannuation growth fund
$5,950.0
0
$5,950.0
0 $5,950.00 $5,950.00 $5,950.00
Total Cash Inflow
$94,075.
00
$96,590.
20
$179,230.
33
$145,145.
79
$149,782.
93
Cash Outflow
Rent
$21,840.
00
$22,495.
20
$23,170.0
6
$23,865.1
6
$24,581.1
1
Insurance Payments
$4,300.0
0
$4,429.0
0 $4,561.87 $4,698.73 $4,839.69
House Hold
$26,000.
00
$26,780.
00
$27,583.4
0
$28,410.9
0
$29,263.2
3
Utilities
$4,800.0
0
$4,944.0
0 $5,092.32 $5,245.09 $5,402.44
Car Running Expenses
$5,200.0
0
$5,356.0
0 $5,516.68 $5,682.18 $5,852.65
Entertainment
$5,000.0
0
$5,150.0
0 $5,304.50 $8,500.00 $8,755.00
Annual Holidays
$3,000.0
0
$3,090.0
0 $3,182.70 $4,500.00 $4,635.00
Work related expenses (Tax
deductible)
$2,500.0
0
$2,575.0
0 $2,652.25 $2,731.82 $2,813.77
Dividend $2,360.0 $2,430.8 $2,503.72 $2,578.84 $2,656.20

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FINANCIAL PLANNING
0 0
Personal Car loan
$2,400.0
0
$2,472.0
0 $2,546.16 $2,622.54 $2,701.22
Interest on Credit Card $495.00 $509.85 $525.15 $540.90 $557.13
Furniture
$3,500.0
0
others
$1,000.0
0
$1,030.0
0 $1,060.90 $1,092.73 $1,125.51
Total Cash outflow
$82,395.
00
$81,261.
85
$83,699.7
1
$90,468.8
8
$93,182.9
5
Cash generated
$11,680.
00
$15,328.
35
$95,530.6
2
$54,676.9
1
$56,599.9
8
Opening Balance
$53,000.
00
$64,680.
00
$80,008.3
5
$175,538.
97
$230,215.
88
Closing balance
$64,680.
00
$80,008.
35
$175,538.
97
$230,215.
88
$286,815.
86
Balance Sheet
The balance sheet for the couple has been constructed for the year 2018 to the year 2023
and this has been explained as follows:
Balance Sheet
Assets 2018 2019 2020 2021 2022 2023
Cars
$43,000.
00
$43,000.
00
$43,000.
00
$43,000.
00
$43,000.
00
$43,000.
00
Investment
$59,000.
00
$59,000.
00
$59,000.
00
$59,000.
00
$59,000.
00
$59,000.
00
Savings Bank Account
$53,000.
00
$64,680.
00
$80,008.
35
$175,538
.97
$230,215
.88
$286,815
.86
Term Deposit
$85,000.
00
$85,000.
00
$85,000.
00
$85,000.
00
$85,000.
00
$85,000.
00
Super Annuation
Balance Fund
$143,000
.00
$156,448
.50
$170,758
.38
$185,978
.38
$202,159
.84
$219,356
.85
Total Assets
$383,000
.00
$408,128
.50
$437,766
.73
$548,517
.35
$619,375
.72
$693,172
.70
Personal loan
$2,220.0
0
$2,220.0
0
$2,220.0
0
$2,220.0
0
$2,220.0
0
$2,220.0
0
Credit card
$3,000.0
0
$3,000.0
0
$3,000.0
0
$3,000.0
0
$3,000.0
0
$3,000.0
0

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FINANCIAL PLANNING
Provision for
Depreciation
$8,000.0
0
$7,700.0
0
$6,006.0
0
$4,684.6
8
$3,654.0
5
$2,850.1
6
Savings
$369,780
.00
$395,208
.50
$426,540
.73
$538,612
.67
$610,501
.67
$685,102
.55
Accumulated Superannuation
The following table consists of the accumulated superannuation has been given as
follows:
Yea
r
Ag
e Salary
Opening
Super
Balance
Add
Employer
super
contributio
ns
Less 15%
Contributi
on Tax
Add net
earning
Closing
Super
Balance
201
9 31
$78,000.0
0 $143,000.00 $7,410.00 $1,111.50
$7,150.0
0 $156,448.50
202
0 32
$80,340.0
0 $156,448.50 $7,632.30 $1,144.85
$7,822.4
3 $170,758.38
202
1 33
$82,750.2
0 $170,758.38 $7,861.27 $1,179.19
$8,537.9
2 $185,978.38
202
2 34
$85,232.7
1 $185,978.38 $8,097.11 $1,214.57
$9,298.9
2 $202,159.84
202
3 35
$87,789.6
9 $202,159.84 $8,340.02 $1,251.00
$10,107.
99 $219,356.85
202
4 36
$90,423.3
8 $219,356.85 $8,590.22 $1,288.53
$10,967.
84 $237,626.38
202
5 37
$93,136.0
8 $237,626.38 $8,847.93 $1,327.19
$11,881.
32 $257,028.43
202
6 38
$95,930.1
6 $257,028.43 $9,113.37 $1,367.00
$12,851.
42 $277,626.22
202
7 39
$98,808.0
7 $277,626.22 $9,386.77 $1,408.01
$13,881.
31 $299,486.28
202
8 40
$101,772.
31 $299,486.28 $9,668.37 $1,450.26
$14,974.
31 $322,678.71
202
9 41
$104,825.
48 $322,678.71 $9,958.42 $1,493.76
$16,133.
94 $347,277.30
203
0 42
$107,970.
24 $347,277.30 $10,257.17 $1,538.58
$17,363.
86 $373,359.76
203
1 43
$111,209.
35 $373,359.76 $10,564.89 $1,584.73
$18,667.
99 $401,007.90
203 44 $114,545. $401,007.90 $10,881.83 $1,632.28 $20,050. $430,307.86