University Finance Course: Personal Finance Report for an Individual

This report presents a comprehensive analysis of personal finance for an individual, encompassing risk assessment, client needs analysis, and financial planning. It includes a detailed examination of the individual's balance sheet, projected balance sheet, cash flow statement, and investment analysis. The report also covers tax minimization strategies, estate planning, and superannuation plans. The introduction establishes the importance of financial planning and outlines the steps involved, while the body of the report delves into key assumptions, budget/cash flow statements, and risk assessment, providing a holistic view of personal financial management. The report also touches upon investment strategies, insurance needs, and estate planning, providing a well-rounded approach to financial well-being.

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Name:
Course
Professor’s name
University name
City, State
Date of submission

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Executive summary
This report covers all the aspects of personal financing for an individual. The report shall cover
a complete risk assessment of the individual, clients needs analysis , the balance sheet for the
individual and the projected balance sheet . Also included in this report is the individuals cash
flow statement and projection, risk assessment, investment analysis , estate planning and the
superannuation plan.

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Table of Contents
Introduction.................................................................................................................................................4
Risk Assessment and Insurance Table.........................................................................................................4
Clients Need Analysis.................................................................................................................................6
Key assumptions..........................................................................................................................................8
Balance sheet and Projected balance sheet..................................................................................................8
Budget/ cash flow statement......................................................................................................................10
Risk assessment Insurance Needs..............................................................................................................12
Tax minimization Strategies......................................................................................................................13
Investment Analysis..................................................................................................................................14
Superannuation plan..................................................................................................................................18
Estate plan.................................................................................................................................................19
References.............................................................................................................................................20
Appendix...................................................................................................................................................21
Personal Finance Questionnaire.................................................................................................................21

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Introduction
Like any strategy, this planning of the financial aspects requires following a method, with these
general steps: Establish the goals of the organization, in general or by areas, and define in what
order they should be achieved.Define dates for the achievement of the proposed
objectives. Prepare a budget that identifies the financial instruments to be used, for what period
and for what purpose to obtain the results sought.Manage the budget and measure the results to
follow the route plan and make adjustments when necessary.
Main Benefits of Financial Planning
This planning is the basis of business growth, as it guides how resources will be used to achieve
expansion, the development of new products or services, or increased sales.
With optimal financial planning, the organization will anticipate many anticipated risks by using
tools that allow it to prepare for the changes, and seek funding when needed (Billingsley, Gitman
and Joehnk, n.d.).
It is also a way of predicting the future performance of the company through sales and income
projections, valuation of assets and liabilities, and to develop strategies to improve cash flow in
times that are expected to be difficult.
Risk Assessment and Insurance Table
Risk Probability of loss Size of Loss( wks) Risk Exposure
Addition of Unknown features 35% 8 2.8
Overly optimistic schedule 15% 5 2.25

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New programming tools and savings 25% 15 2.5
Additional requirements 20% 20 2.5
Project approval 18% 15 0.75
Facilities not ready on time 20-25% 5 0.2-0.4
Project approval 10% 10 0.5
Insurance risk 10% 15 1.5
General risk 5% 5 0.75
Medium- and long-term planning should be a guide for purchasing equipment and inputs based
on expected demand, but it will also serve as a valuable document when looking for investors or
financing, as it details the real prospects of the business.
Evaluate the efficiency of financial planning
Evaluate the efficiency of planning
It is always necessary, rigorously, to evaluate the results of planning.
This implies the constant formulation of projections that take as basis the norms, the
performance of a process of feedback and its later adjustment.It is necessary to use several types
of budgets per area of an organization. In order for a good financial plan to exist, there needs to
be a strategy (Ho and Robinson, 2012).
The quality of the plans, programs and financial budgets will always be conditioned to the form
and elements used in such planning.

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Elements to Consider in Financial Planning
Financial plans cannot be perfect, since they are based on projections of the behavior of the
organization to various variables, so it is necessary to constantly evaluate and adjust them when
necessary.
Clients Need Analysis
The important thing is to consider all aspects that can influence business performance, both
positively and negatively, as the company must be prepared to face, either a pick-up in demand
and good management of additional revenues, sales and their impact on cash flow (Ho and
Robinson, 2012).
Planning how the organization's operations will be financed during a difficult time will be the
key to its survival, hence the importance of having the finances in order to access funding
sources.
A notable factor is not losing sight of the company's overall financial landscape, getting too
involved in small setbacks.
Precisely from general planning must come the solution for the small stumbles that can represent
a bad sales season or a shake-up of the general economy or the financial markets.
Do not leave out of the forecast any variable and develop strategies for all kinds of circumstances
will also better prepare the organization to face them, giving you greater chances of success in

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the goals that have been established.
The forecasting, management and control of the resources are the objectives of the financial
planning in the company, that will guide the decision making.This will ensure that all such
decisions, in all areas, lead to a common purpose and have the necessary financial backing to
bring them to fruition (Swart, n.d.).
No organization will grow, or get ahead of the market shakes, if you do not have planned the
steps to follow in any of those situations.
Improvisation can have serious consequences for any business, because it will be born of despair
and will not take into account future risks.
Analyzing variables, setting goals, anticipating favorable or unfavorable situations, designing
budgets and strategies, measuring results and making adjustments are essential actions for good
organizational performance (Swart, n.d.).They are also constant actions. You can not plan in the
medium or long term, make decisions and trust that everything will go according to plan.
Observation of the company's behavior, of the markets and the forecast of possible risks is also
an essential aspect of the work of the organization's financial planner or adviser.
Do not leave loose and pre- If you want to know the advantages of financial planning in the
company, we believe that the following Manual can help you a lot to sort your work. The
Financial Director of the Future

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Key assumptions
1. The first key assumption is the rate of return to use for the growth of the investments. A
balanced portfolio uses 35% rate of return in bonds, 4% in cash. And 61% in a stock
portfolio that is diverse would yield a return an 8.87%.
2. The second assumption is to be made on the rate of inflation. Records have it that from
1975 to 2014 inflation has been on an average of 4.1%. However, inflation should be
projected at 2.5% but it is important to consider the nature of the expense or income.
3. The third assumption is the standard deviation used for investment return. A higher
investment rate means that a higher standard deviation is used. A BALANCED portfolio
has a standard deviation of 10.44% (LLP, Nissenbaum and Raasch, 2004).
Balance sheet and Projected balance sheet
Assets
Amount in
Dollars$
House property
Cash - checking accounts 750,000
Cash - savings accounts
250000
- 120000
Certificates of deposit -

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Securities - stocks / bonds / mutual
funds
Notes & contracts receivable 25000
Life insurance (cash surrender value)
10000
-
Personal property (autos, jewelry, etc.)
22000
-
-
Real estate (market value)
120000
-
Other assets (car)
30000
-
-
Total Assets
$ 1,327,000
-
Liabilities
Amount in
Dollars
Current Debt (Credit cards, Accounts) $
250000

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-
Notes payable (describe below)
27000
-
Taxes payable -
Real estate mortgages (describe) 750000
Other liabilities (loan ) 300000
)
Total Liabilities $ 1,327000
Net Worth $ 1,327,000
Budget/ cash flow statement
INFLOWS Per
month
Per year
INCOME
Salaries, wages and commission 40000 480000
Rental income 10000 120000
Interest and dividends 200 2400
Social security benefits 300 3600

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Realized capital gains 500 6000
Other income
Refunds/rebates/reimbursements 0 0
Tax returns 0 0
TOTAL INFLOWS 51000 612000
OUTFLOWS
income tax federal 2000 24000
savings plan 6000 72000
Charitable contributions 0 0
FINANCING ACTIVITIES
Mortgage payments 1000 12000
Loan payment auto 500 6000
Other living expenses 7000 84000
Auto(insurance, fuel,service) 1000 12000
Daily living(Food,clothing,supplies) 6000 36000
Education 2500 30000

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Medicare 1000 12000
Health insurance 1000 12000
Medical 300 3600
Property tax 3500 42000
Vacation and travel 0 0
Miscellaneous 5000 60000
Total Outflow 36800 441600
Net Cash flow 14200 170,400
Risk assessment Insurance Needs
Finances have their origin in the completion of an economic transaction with the transfer of
financial resources. This receives mainly contributions of disciplines like the economy,
management, and accounting and of the quantitative methods of analysis. Finance can be defined
as "the art of managing money", while financial management "refers to the tasks of the financial
manager". Finances contain a set of principles, techniques and procedures, which are used to