Budget and Financial Plan Project Report
Paper details:
Budget and Financial Plan Project Report
Each student will develop a full financial plan for their short-term and long-term goals. This plan will cover all the topics covered in the course along with any specific personal goals the student has for their life. The summary comments should be a detailed analysis of the choices you made and why you made them. These are a major part of each section. See detailed description below. Assignments will be turned in through Canvas using the external tool Unicheck and written in a common recognizable format (MS Word, docx; Adobe, .pdf) and MLA style formatting with references and bibiography, and are due by date/time specified in the assignment in Canvas.
Section I – You
Personal goals including professional, social, and financial goals
Summary comments on the changes you made and why
Section II – Your Budget
Your Personal budget (Excel/Google Worksheet) based on the four months of class. Planned income vs. actual income; Planned expenditures vs. actual expenditures; Net Surplus vs. deficit; New Planned budget based on average salary in the profession you aspire achieving to support financial plan objectives (Car, Home, Retirement).
Summary comments on the changes you made and why
Section III – Your Car
Part A – Research Car Options
Research and compare 3 different cars you might want to purchase
Purchase price
Monthly payments
Monthly gas costs
What it would do to your insurance costs
Estimated resale value after 5 years (depreciation)
Estimated annual maintenance costs
Which car would you choose and why? (Show an understanding of the financial consequences of the choice)
Part B – Research Financing Options
Loan Options
For the car you chose, research 2 different financing options for the car from two different sources (banks, credit unions, or a dealer).
What is the interest rate and term for each
What is the monthly payment
What is the effective total cost of owning the car over 3 years
Lease Option
Identify what a 3-year lease would cost you in monthly payments
Identify the down payment and any other costs they charge
Cash Option
State when you want to buy the car and how many years away it is.
Identify a mutual fund that could be used to invest for buying the car. Explain why this fund is appropriate and note it’s expected rate of return.
Using the calculator in the worksheet, identify how much you will need to save each month to be able to buy the car outright.
Section IV – Your Home
Part A – Identify The Home
Using the housing research you did for homework (or identifying a new city) identify a property that you would like to buy at some point in the future.
Analyze the purchase of a home from an investment standpoint including
Growth potential of the asset
Opportunity cost of paying a mortgage vs. being able to invest in other assets
Rental income potential of the asset
Maintenance and repair costs for the asset
Part B – Plan the Purchase
How long do you have to save: Analyze when do you think would be ‘right’ for you to buy a home (age) based on
Lifestyle needs
Financial abilities
Job stability/opportunities
How will you afford the down-payment needed to buy the house
How much of a down-payment would you need and by when?
What will you do to save the money needed for the down-payment?
Where will you invest the funds until you are ready to buy?
What investment classes will you use? Why did you choose those investments
If you are using a lifecycle fund or target date fund, identify the fund and its historical returns.
What is the expected return of your investment strategy?
Using the calculator in the worksheet, identify how much you will need to save each month to meet your down payment goal.
How much of “other peoples’” money would you be able to use with this strategy?
Section V – Your Retirement
Part A – Your Risk Tolerance
Determine your risk tolerance for your retirement investing.
Explain your tolerance for risk and what factors you used to come to that conclusion.
Part B – Your Asset Allocation
Develop an asset allocation model that is appropriate to that level of risk.
What asset classes do you want to invest in?
What % of your portfolio does each make up?
Analyze why that asset allocation make sense based on your risk?
Part C – Plan Your Retirement
Figure out how much you need to save for retirement
When do you want to retire (how many years away is it)
How many years will you be in retirement
How much income per year do you want in retirement
What will be your needed retirement account balance (calculated both ways)
Identify at least 4 mutual funds that you can use to create your asset allocation
Analyze 4 different mutual funds (Do the following four times, once for each fund)
Name of fund and ticker symbol
What is the fund’s investment strategy?
How has each performed over the past 10 years?
What asset classes does the fund invest in?
What individual companies that you like does the fund invest in and why do you like that?
Analyze the funds management team
What reviews do you see of each fund/management team
How does this fund fit into your investment philosophy and why
Calculate your investment portfolio’s percentage rate of return based upon each fund’s performance and how much of your portfolio is invested in them
Calculate (using the calculator) how much you need to save per year to reach your retirement goal?
Section VI – Your Class
Summary comments on how this class has impacted you. Focus more on what changes you are or will SOON be making in your relationship with money. How are you doing with meeting your goals? What habits have you changed? Are there any questions or information we did not cover that you woucgold have liked to cover?
