Financial Literacy Case Study: FINC 250 Signature Assignment

This case study analyzes the financial situation of Robert and Carole Ann Adams, a young couple with specific financial goals including buying a house, having a baby, and retirement planning. The case study begins with an introduction, detailing the couple's current situation, including income, assets, and liabilities. It then presents a goals worksheet, a statement of cash flow, and a statement of net worth. The analysis section identifies the couple's strengths, weaknesses, opportunities, and threats. Recommendations are provided, addressing income, expenses, savings, investment, risk management, insurance, and retirement planning. The case study also includes projections of their future financial situations based on their current trajectory and if they adopt the recommendations. The document provides a comprehensive financial plan, offering insights into personal finance and wealth management strategies.

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Template for Case Study for Financial Literacy
The attached template will give you a framework for preparing your case study for your signature
assignment. While professional planners may produce a document that is 70 – 100 pages long for their
clients with complex financial affairs, what you as a consumer need to know how to do is apply the
financial planning process to making decisions about your own affairs. Even though you are mostly very
young people, you still need to plan for your retirement. Only a few dollars put aside now will make a
big difference to you and how well you live in your later years.
Basically, you will start out by figuring out where the subject of the case study stands now. Most of this
information will be made up by you in the case study narrative. Then you will need to prepare a goals
worksheet, current balance sheet and a statement of cash flow. You also will list the assumptions that
you are making as to future inflation, future investment return, increases in wages, etc. This will take
care of Step 1 and 2 of the financial planning process. You should approach the case as if you were a
financial planner and the subject is your client.
The next section of your plan will be the analysis. This is where you will use all that information that you
learned about life and health and property and casualty insurance, taxation, debt, education financing,
retirement planning, etc. in the subject matter that we covered in the course. You will analyze the
situation for Strengths and Weaknesses, Opportunities and Threats, and prioritize the steps that need to
be taken to help the subject of the case reach his or her financial goals. If someone is head over heels in
debt, their first step is to get that handled, then they can start saving and investing. As you do your
analysis, you will start to compile your recommendations, and develop a timeline for what needs to be
done. You will then present your recommendations in a recommendations section.
In your final section, you will present what the person’s future will look like if they continue as they are
now, and also a projection of what their future will look like if they follow your recommendations. Your
final statement should state the time until the next review. When doing the steps in your plan, be sure
to note places if you were unable to meet all of the client’s goals and why.

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SIGNATURE ASSIGNMENT
FINC 250 – Prof. Jayaraman
Student Name: xxxxxxxx
Write a narrative describing the situation of your case study. For example,
Robert and Carole Ann Adams are a young couple, ages 26 and 22 respectively. He has a BS. In
Management and is a lower-level manager at ABG Industries, where he is regarded as an up and comer.
His salary is $75,000 per year. She has a bachelor’s in marketing, and is working on a marketing team for
a major manufacture of textiles. Her salary is $60,000 per year. They would like to buy a house and then
have a baby sometime in the next 5 years. They have $10,000 in a savings account, and Robert
participates in the 401(k) plan at work. Robert likes to collect and restore old automobiles, but finances
most of his hobby by selling about half the cars he restores. Storage is sometimes a problem. Below is a
Statement of Net Worth and a statement of Cash Flow for the Adams.
Once the baby is born, Carole Ann hopes to take off work for at least 3 years to care for the baby.
What do Carole Ann and Robert need to do to achieve their goals.

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Introduction
The report deals with planning the future of an individual for achieving the goal and objectives
of his life and meeting any future liabilities. The age of Robert and Carole Ann Adams are 26
years and 22 years. Robert salary is $75000 and Carole is $60000. Further, Robert is a low level
manager at ABG Industries and Carole is a part of marketing team for textiles. They have
$10,000 in savings account.
CURRENT SITUATION
Name(s) of client: Robert and Carole Ann Adams
Address: United States
Telephone Numbers: 040-78676
Home: Cell: Work:
Email addresses: Robert.adams@ gmail.com and Carole.adams@ gmail.com
Date of Birth: 01-01-1993 and 01-02-1997
Employer and Occupation: Robert is a low level manager at ABG Industries and Carole is a part of
marketing team for textiles
Medical or Mental concerns: No medical and mental concerns as on date
Goals Worksheet: (use the goals worksheet that is in your book.)
(a) Buy a house in 5 years;
(b) Have a baby in 5 years;
(c) 3 years work take off post birth of child for Carole;
(d) Retirement Planning
Prepare Statement of Cash Flow (Use format in your book.)
Sl No Particulars Amount
1 Salary of Robert 75000
2 Salary of Carole 60000
3 Living expense (assumed) (30000)
4 Taxes (Assumed) (30000)
5 Savings 75000

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Prepare Statement of Net Worth (Use format in your book.)
Particulars Amount Particulars Amount
Liabilities - Savings 10000
Net Worth 10,010,000 Human Capital
Estimated
10,000,000

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ANALYSIS OF CURRENT SITUATION
After looking at the information on the client’s current situation, identify the strengths, weaknesses,
opportunities and threats affecting the client.
STRENGTHS: Young age, High Human capital, little or no liabilities, educated, stable job, risk bearing
WEAKNESSES: No assets, heavily dependent on human capital for survival. Risk tolerance decreased post
five year on account of increase in liquidity requirement
OPPORTUNITIES: Young, Growing market, alternative job and education to boost career.
THREATS: Competition, recession etc.

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RECOMMENDATIONS
(Remember that you may not be able to meet all goals in the client’s timeline. Recommend which goals
need to be postponed and why.)
Income and Expenses: Regular expenses shall be met
Savings and Investment: Savings shall be high and major chunk shall be invested in equity both domestic
and international for diversification
Risk Management and Insurance: Risk shall be managed by taking proper insurance involving life, term
and financial loss insurance
Taxation: Tax rate is high in US and shall be planned accordingly. Further, investment shall be locked in
equity hence tax shall be deferred
Retirement Planning: Since, there is a lot of time available for retirement. The risk capacity is high and
major investment can be made in equity to maintain proper portfolio balance.
Wealth Transfer and Estate Planning: Wealth Transfer and estate planning shall not be a big criteria as
both the client are young. Further, the asset shall be transferred partly to 1st generation and partly to
second generation to avoid dual taxation.
(If your client is young, there may not be a lot here.)

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Disclaimer: These are only projections and are not guaranteed.
How your situation will look in five years if you continue as you are:
The situation shall be good with increase in FC and capital set aside for meeting the future goal and
liabilities
How your situation will look in five years if you accept the recommendations:
If the recommendation are accepted, goal and objectives shall be met.

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This page lists specific steps that the client needs to take and any steps you need to take.
Next steps:
Examples:
Contact insurance broker and change coverage on your automobile.
Contact HR and sign up for 401(k) plan
Etc.
Please feel free to contact us if you need any help doing the tasks above. We will contact you to set up
an appointment to review your plan in 3-4 months. Thereafter, we will expect to meet with you at least
twice per year. Please contact us immediately if you have a change in your financial circumstances,

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REFERENCES
Using APA 6th style, put in references (if any) that support your recommendations.