Financial Planning and Investment: Wealth Building Strategies Analysis

This report delves into the core principles of investment and financial planning, focusing on wealth-building strategies for individuals. It begins by defining investment and outlining the importance of identifying financial goals. The report then explores various wealth-building strategies, including budgeting, long-term investments, reinvesting profits, risk management, and tax savings. It provides a structured approach to implementing these strategies, covering cash flow management, health protection, debt reduction, superannuation engagement, and wealth structuring. The report also assesses the appropriateness of risk profiles in superannuation accounts and offers recommendations for retirement planning, considering factors like lifestyle expenses, children's education, and potential health issues. Ultimately, the report emphasizes the significance of financial planning and offers a systematic approach to help individuals achieve their financial objectives.

Investment and
financial planning

Contents
INTRODUCTION.................................................................................................................................3
TASK....................................................................................................................................................3
Discussion on the wealth building strategies.....................................................................................3
Structure for the implementation of wealth building strategies:........................................................4
Review of the superannuation accounts and comment on whether the risk profile is appropriate or
not along with the statement on their retirement and changes that are need to be made....................5
CONCLUSION.....................................................................................................................................6
References.............................................................................................................................................7

INTRODUCTION
Investment is the process where the financial goals are identified and then they are
converted for framing a plan. It is the major factor of the financial planning. The investment
planning always starts with identifying the fiscal goals and objectives. It has many
advantages, it provides with family planning, savings, standard of living. The upcoming
report looks into the case of Andrew and Mary who have decided to assess their insurance
policies. It comprises of the wealth building strategies, structure for the implementation of the
strategies. Moreover, it also assesses the risk profile and decision on whether their savings
will be enough for retirement or not.
TASK
Discussion on the wealth building strategies.
Wealth building can be defined as generating stable source of income. It is the procedure of
investing in different kind of assets to get the income so that the financial objectives and
goals can be fulfilled. Such strategies help the person to be in the good fiscal position when
they decide to retire. The strategies to build the wealth are as follows:
 By having a budget: Andrew and Mary shall make a budget for their expenses,
savings, giving and for other things as well. It is very important. It will help both of
them to allocate the money for each and every generation. This will help the Utley’s
family to save more and put that money in investment which will result in the
generation of income.
 By making long - term investments: Andrew and Mary Utley shall make investments
on assets and stock. They should invest around 20% of salary individually. It will help
the them and their kids to meet the future uncertainties.
 By reinvesting the profits: The Utley family shall assess their bank accounts also. This
family should go for the profitable investments, and the profit which is received by
such investing of money shall be reinvested.
 Risk Management: The crucial and relevant strategy that Utley family needs to
understand is the knowledge of risk. The risky investments shall be avoided. They
shall plan for the future emergencies like large medical bills, home repairs and other
events that they might face.

 Maximize tax savings: Andrew and Mary shall make payment of the taxes on time
and try to save with the advantages under the tax saving schemes. Like, as seen in the
case Mary is the part time gym trainer for 9 years and is receiving minimum
employee contribution so she shall make use of it to reduce the tax liability.
Structure for the implementation of wealth building strategies:
It is mentioned below:
 Managing cash flow: Cashflow is the key pillar to the personal finances and Utley
family shall ensure that they monitor cash inflows and outflows. This will help
Andrew and Mary in providing guidance for the future spending, and will give the
direction for the savings and investments goals.
 Protecting the ability of ongoing good health: It is seen in the case that Andrew
smokes on a regular basis. It can lead to the serious illness and can influence the
lifestyle of his family; this is something which they shall not take lightly. In addition
to this there are times when the person is impacted by the illness and it leaves the long
– term influence. While obtaining for any insurance the points that shall be
considered: The structure of the cover, the applicability of tax consequences and
selecting the good insurer. The family shall ask themselves the question about that if
the person has cover via the superannuation fund and does it show his current
requirements.
 Paying down inefficient debt: Inefficient debts are those for which the family cannot
claim the deduction of tax for interests on loan and cost on loan. When such debts are
paid, then the Utley family can examine where the profits should be applies to save
the financial goals.
 Engaging with super: Both of the parents are an employee. They can receive the
payment for their employer in around $ 400 - $500 as a superannuation guarantee
payment. The advantage of this fund is that there is low tax and makes it easy for the
employees to invest and grow the money for the purpose of retirement.
 Structuring the wealth to grow: Investing in other than superannuation is quite
complex. In this pillar the Utley family shall have an understanding of why they are
saving and investing the money.

Review of the superannuation accounts and comment on whether the risk profile is
appropriate or not along with the statement on their retirement and changes that are need to
be made.
The risk profile is not appropriate as there are so many things and needs that they will
have to encounter in future. So, Andrew and Mary shall collect more in their superannuation
funds, because this will help the Utley family in long term perspective. In the case it is seen
that the Andrew is planning for the retirement at the age of 60 and the lifestyle expenses are
to be traced at $ 70,000 which is just less than $ 15000 and $ 20000 of Mary and Andrew.
Now, they are also planning for the kids schooling in the private secondary school for which
good amount of money is required. Also, it is interpreted that Andrew smokes regularly so he
there are chances he will have to suffer from the lung infection in future. Keeping all this into
the consideration the retirement will only be beneficial if both of them start earning good
money. Because the age of their kids is 7 years and 10 years only. The changes that can be
made are, they shall make less expenses and create an annual budget so that they spend in
necessary things only and they should also assess their insurances.

CONCLUSION
From the above report it can be concluded that the wealth is not just money but it is
more than that. Investment in an asset, creation of budget, reinvesting the profits etc. are the
wealth building strategies that a person can adopt for achieving the financial goals. This
report also gives the clear representation on the importance of financial planning and the
systematic approach that can assist in the creation of wealth.

References
Books & Journals
Arpana, M.S.D. and Naidu, G., 2019. A study on financial literacy and its impact on investment
decision of professionals. ZENITH International Journal of Multidisciplinary
Research. 9(11). pp.49-54.
Barthel, A.C. and Lei, S., 2021. Investment in financial literacy and financial advice-seeking:
Substitutes or complements?. The Quarterly Review of Economics and Finance, 81.
pp.385-396.
Goyal, K. and Kumar, S., 2021. Financial literacy: A systematic review and bibliometric
analysis. International Journal of Consumer Studies, 45(1). pp.80-105.
Li, B., 2019, December. Research on optimal portfolio of financial investment based on genetic
algorithm. In 2019 International conference on economic management and model
engineering (ICEMME) (pp. 497-500). IEEE.