Personal Financial Plan Business Project

Posted: May 7th, 2022

Personal Financial Plan Business Project
Personal Financial Plan
Identify a client (an individual, a couple/family or yourself) and interview them. The person
must be either at least 25 years old or working full time.Based on the interview, you should write a financial plan for the person or family.
Section 1.
Personal Characteristics
a. Identity: Name(s), age, where they live, career, stage of life cycle, familysituation (single, married, children,etc.).
Section 2.
Current Financial Situation and Goals
i. What is the current financial state of your client? Show their financial statements: balance sheet, cash flow statement, and current budget (if they already have one). What is your assessment of your client’s current financial situation especially with regard to their present stage of life cycle? Are they doing very well, just getting by, in serious financial trouble,etc.?
In this section you will address the following two items:
1. Income Status andPlanning
a. Current sources: employment, investment, business,pension
b. Goals and plans about future sources ofincome
c. Financial planner’sanalysis/assessment/comments
d. Recommendations
2. Personal Financial Statements – Balance Sheet (Statement of NetWorth),
Cash Flow and Budget
a. Current situation (with some ratios ifpossible)
b. Goals and plans to improve on the current state (increase net worth,balance cash flows and have budget/cash flowflexibility)
c. Analysis/comments
d. Recommendations
ii. What are their main financial goals? If they don’t have any set goals as such, what would you recommend for them as an area of priority?
iii. Based on your assessment of the current situation and in light of their financial goals (if any) what aspects or areas of financial planning do you think they need help with the most or you think you can be of most use to them?Why?
Section 3.
Segment(s) of Financial Plan to be addressed in details with recommendations
Given the chosen area(s) of their finances you want to address, write a financial plan that the person or family can follow in to achieve their financial goals. Your recommendations for them should be clearly stated possibly as a numbered list of steps to follow or things to do. It should be clear from your analysis of their situation that if they follow the strategies that you are recommending they will be able to achieve theirgoals.
Below is a list of areas of Financial Planning that your plan can address.
1. Emergencyfund
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
2. Debt management and eliminationstrategies
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
3. Tax minimizationstrategies
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
4. RiskManagement
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
5. Home Purchase; and plans to payoff mortgage as quickly aspossible
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
6. Plans for acquiring other major assets (apart fromhome).
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
7. Investments
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
8. RetirementPlanning
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
9. EstatePlanning
a. Currentsituation
b. Goals and plans
c. Analysis
d. Recommendations
You are free to choose whatever or format you want to present your financial plan in. However, it is strongly recommended that your report (financial plan) should clearly address each point. You can provide additional comments, graphs, or illustrations that you think are useful and relevant.
It is a good idea to discuss the viability of the strategies or recommendations you are proposing with respect to their effectiveness, mentioning any weaknesses (potential pitfalls) of the plan as well as alternative lines of action in case the first choice recommendation does not work.
In the analysis section, you will state your opinion about their current situation – good, bad, dire situation etc. and why you think so. If they have already set some goals you should state your opinion as to whether you think the goal makes sense and/or realistic.
Where necessary, include any lifestyle/habit modification that you feel may be necessary to make the plan work. If relevant, discuss the present stage of the family’s life cycle and any imminent life cycle changes (getting married soon, starting a family, imminent divorce, children close to college age, etc.) and their impact on the plan and how those changes will beaccommodated.
Some of the key requirements that will make a good financial plan are that it must
• show a good understanding of the financial planning process and how your financial plan and recommendations fit into the person’s (or family’s) lifestyle and long-term plans;
• demonstrate a clear understanding of the family’s present financial situation, needs andpriorities;
• provide a workable step-by-step plan (list of recommendations) that the person or family will understand and be able to implement; don’t just write an essay on good financialplanning.