Financial Planning Project: Developing Investment Recommendations

This project centers around providing financial planning advice to a medical doctor and his wife, who are seeking guidance on investments to achieve their short and long-term financial goals. The couple has surplus cash after meeting monthly obligations and aims to invest for a new home, family car, children's education, and overseas travel, while also supplementing their superannuation. The project involves assessing their current financial situation, including income, debts, insurance, and superannuation, to develop suitable investment strategies. The analysis considers their risk tolerance, time horizon, and specific goals, with a focus on growth assets. The project also addresses concerns about insurance needs and the importance of a will. The ultimate goal is to offer personalized financial recommendations that align with the client's ambitions and provide a roadmap for financial success. The assignment brief provides detailed client information, including income, expenses, and financial goals, to facilitate the creation of a comprehensive financial plan.

After meeting our obligations every month, my wife and I remain with some cash surplus
which we normally leave it idling in our bank accounts.
Recently I had some sort of brainstorming with my wife about our future. We decided to
set some short and long term financial goals for ourselves. During the process, we came to
the realization that it would take an extremely long time before our savings could enable us
to achieve a fraction of our goals. We knew our fortunes would multiply exponentially if we
invested, but we did not know what kind of investments brings maximum returns with
minimum risks.
We have set for ourselves very ambitious goals which we will struggle very hard to
achieve. Among our top priorities is to buy a new home. We are thinking aloud here. It is
our dream that we invest in high yielding schemes which will give us good money at the end
of it all. We do not know whether it will be possible but we are thinking of how to
accumulate enough money so that we could buy a home without going for a mortgage. The
other goals are having a new family car, being able to send our children to a private
secondary school and being able to travel overseas.
Buying a new family car has been on the cards for a long time. It is a priority for us
because we love travelling a lot. Travelling is one of our hobbies and the sooner we get a
new car our plans of interstate whistle-stop exploits will come to fruition.
It is still a long way off but we have started thinking about our children’s education. It is
our dream that they get a very good education by attending quality schools. From our own
research, the schools we are thinking of are very expensive but we do not mind so much
about the cost. Our focus is the quality of education which our kids will get regardless of
cost implications. In our plans, we are dreaming of sending our kids to private secondary
schools. We need to save money to enable educate our children well and comfortably. We
are confident that they will perform well in secondary school and then proceed to very
good universities which we shall struggle to pay for as well.
We are members of superannuation schemes. We are not so much worried about our golden
years because we know that it is well taken care of by the superannuation but it would do
us greatly if the investments we intend to make would give additional incomes to
supplement the superannuation. We have not even bothered to seek clarification from
superannuation managers to tell us how much our investments in the scheme will earn us
in the future. We are also not sure for how long we shall remain being formally employed.
At the moment it is not in our immediate plans to quit and join a private practice. I could
easily do so because of my profession as a medical doctor but for my wife who works as a
speech pathologist, it will not be easy for her to become a private practitioner. Quitting our
jobs would also affect our superannuation accounts. At the moment, as employees, part of
our contributions comes from the employer and another part comes from our salaries.
Should we join private practice our contributions to superannuation scheme will climb
down.

We have some debts but they do not weigh us down very much. Compared to our monthly
income and surplus we are in a position to clear those debts as soon as possible. It is our
intention to free all our money from all other commitments to enable us to direct a huge chunk of
it to the investments you will advise us to enter into.
Our lives are well insured. We have insurance policies which we think are good for us. We
believe that as you review our data you will be able to advise on this matter also. We are not sure
if the insurance policies whose premium we pay monthly are best suited for us. At times when
my wife and I discuss the issue, we fail to arrive at a consensus on certain areas of our insurance
policies. As a doctor, I at times feel that I am not as exposed to certain risks as the general
population is, and I would as well align my insurance needs with the level of my of true risks so
as to save on premiums.
We have not given a careful thought the issue of writing a will. I believe it is part of the issues
which you will advise us on. I do not understand why we have not given the matter the
seriousness it deserves, but I tend to blame our relative youthfulness. There is a misconception
among the younger population that the writing of wills belongs to the very elderly who are in the
sunset years of their lives.
As experts in the field of finances and investments, my wife and I have come to see you in
confidence. We require from you the best financial advice and guidance on how and where
to invest. At the moment we have no investments talk to about. I do not want to classify
superannuation as a form of investment although we have that one. Superannuation would
be beneficial to us at old age, after our retirement, but that is still a very long way off.
We have placed the money we have in the bank in fixed deposit accounts but it is not
growing at a rate that will see our financial dreams realized. We have some idea as to
where we would like to invest in and we seek your guidance. We have limited options
because of our limited knowledge also but our priority is to invest in growth assets.
You will help us to determine whether investing in growth assets should indeed be our
priority depending on your evaluation of our current financial status.