Personal Finance Plan
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Personal Finance Plan
Shawanda Comer
FIN - 210
August 18, 2019
1
Personal Finance Plan
Planning and financing a life can be daunting but it does not have to be difficult.
As a child, and as a young adult, I was never taught financial literacy. This included how
to manage my income for my expenses, and savings for both the future and rainy days. It was not
until 3 years ago that I began to inquire about my financial life and where I wanted to be in the
upcoming years. I know that I want to begin to work for myself and employ others, mainly
because I want my family to be financially set in terms of readily available money and the
opportunity to work for themselves as well. As I put together my personal finance plan, I have
considered my life goals, my financial goals, and the practices I could use to meet these goals.
Life Goals
Ten years form now seems like a long time, but as the old saying goes “Time flies when
your having fun”. In these years the things that I would like to accomplish include operating a
trucking company, purchasing vacation rentals, buying land and building a home, and traveling
outside the country at least once a year.
Goal #1
To begin investing and supporting other aspects of my life, my plan is to begin with
operating a general freight company. The freight transportation industry is a lucrative industry
that has many opportunities for individuals and companies to gain liquidity. My plan is to start
with one truck and after one year begin to add an additional truck every six months. In a ten-year
time span I would hope to have eighteen, if not more, working trucks on the highways.
Goal #2
I have always wanted to explore real estate, but my initial thought was just to offer yearly
rentals. After traveling and having to use sites such as Airbnb and VRBO, I have come to realize
that there is more money to be made through short term vacation rental. I will target major tourist
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Personal Finance Plan
destinations such as my home town of Philadelphia, Panama City Beach, Virginia Beach, and
Atlanta. After the first year of successful transportation, I will begin the transition and purchase
my first property. My intention is to purchase one home a year with a goal of ten units within
eight years.
Goal #3
Over the next few years, money will be saved from the trucking company and real estate
to purchase land and build a home. My goal is to pay cash for the ten acres of land and cash for
my home so that I will only have to pay yearly taxes on my property. With the ten acres of land
both myself and my children will have a starting place to build a home and settle down when
they are ready. I will continue to save so that their homes can be paid for in cash as well. I do not
want a mortgage or to pay more money in interest fees then I have already paid over the years
from renting.
Goal #4
Last but not least I want to see, smell, taste, and feel everything that the world has to
offer. Traveling outside of the United States will allow me to do this. I will start in the upcoming
year with one trip to a new country every year. At the ten-year mark, my children will have
enough experience and information, from working alongside my husband and I, that they can
take on more responsibility within the businesses that we have established. This will permit us
more time to experience life and begin taking two trips a year in a more relaxing atmosphere
versus stressing to get ideas off the ground.
Financial Goals
As with all goals and adventures in life, there is money involved. Money to purchase
products or equipment, and money to pay for the journeys and expenditures. Currently speaking
3
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Personal Finance Plan
my financial situation is limiting what I want to accomplish. I currently have a few more
expenses and liabilities than I have assets and liquidity. But not too much to where it prevents me
from making any future moves. Both my husband and I still work full time jobs, our cost of
living is relatively low compared to other cities around the United States, and we have begun to
save and invest in the stock market.
Goal #1
To become financially free from any loans and credit cards is the first step in my financial
plan. Over the past few years, my husband and I have accumulated quite a bit of credit card,
personal loan, and student loan debt. This is majorly due to him switching career paths. We knew
that this would happen, but we agreed that it would benefit us within the long run. We are
currently on schedule to be free of all debt (minus school loans) by March 2021. When we began
acquiring debt, we discussed this as our pay off date, partly because we did not want to graduate
college with more than our student loans. We have set up payment schedules outside of what was
given by the loan companies so that we can pay it off before the time that they have given us.
This leaves room for life’s errors and if something were to happen, we can still make the original
payments that the companies are asking for.
Goal #2
To pay for my children’s college tuition. The cost of an education seems to be one of the
most stressful situations that I have encountered, and I hope to alleviate some of that for my
children. Student loans are not ideal, and if anyone can get a higher education and graduate with
no student loan debt, then they should most definitely try. With my oldest son planning to enlist
in the armed forces, I will have four years from now to save for my daughter’s education. She
has not made a career decision yet, this and the fact that the cost of an education keeps rising, I
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Personal Finance Plan
do not have a specific idea of how much she will need so I am basing it off what I must pay per
course plus $200. Saving this amount while I am in school and paying for mine seems a little
hard to do, so I am starting with a small savings and will hopefully be in a position to pay for
each of her courses as they come up.
Goal #3
To have enough cash inflow to retire. Retiring comfortably is the life goal of every citizen
around the world, and I am not different. While I do not plan to fully retire (as of now), I do plan
to teach my children, or whoever wants to learn, how to properly run the businesses that I have
established so that I can take more of a hands-off approach. By age 45, I plan to be off the road
an in office overseeing others that are still out in the field either acquiring properties, moving
freight, or facilitating duties to others. By age 55, I would like to be able to pass the torch of who
has the final say on transaction including what direction the business should take. By the time
that I am 65 years old, I want to have as little involvement as possible in the daily activities.
While I will be checking in randomly to ensure that there is still a smooth process, my telephone
should only ring when I am called into a meeting that requires all the shareholders of the
company. I know that in the real-world hiccups happen and things do not go as planned, but as I
develop this financial plan more, I will be sure to have a plan B and C within the back of my
mind.
Implementation Plan
Now here comes the fun part. What will I do to help my plan get off the ground and how
will I see it through? There are so many options in terms of financing a life and investing in a
future. One thing for sure is that you do not need to start out at a high level of savings or at an
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Personal Finance Plan
advanced level of investing. Simply coming up with a game plan, and back up, will help in
seeing your vision become truth. When life events affect my financial needs, this financial plan
will provide a vehicle for adapting to those changes. Regularly reviewing this will help you make
priority adjustments that will bring your financial goals and activities in line with your current
life situation.
Planning Tools
Throughout my life I will periodically analyze my financial values and goals. This
involves identifying how I feel about money and why you feel that way. The purpose of this
analysis is to differentiate your needs from your wants. What I may feel is important at this
specific time in my life may change in ten to twenty years form now. An example of this would
be in the case of life insurance. Right now, I would want to replace my income for my children if
I were to pass away, therefore I would need a substantially large amount of insurance. Where as
in twenty years from now my children will be grown and no longer be dependent upon me for a
source of income so I would only need enough insurance to cover any outstanding debt as well
as funeral arrangements. Keeping track of my needs versus wants will be the key tool I will
utilize to succeed in this financial plan.
Managing Liquidity
As I have learned, liquidity is the ability to generate cash on short notice. It is not about
how wealthy we are, but about how much of cash we can pull out as and when needed. My
current liquidity consists of a few older vehicles, checking and savings account, household
furniture, and electronics. As my business and salary grows this too shall grow which means that
I will need to adjust my spending habits so that I do not reduce liquidity. Creating an emergency
fund is a much-needed step in managing my liquidity. I would like to set aside money that covers
6
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Personal Finance Plan
6 to 12 months of my expenses in an easily accessible investment option. Since one of my goals
is to own my home with no mortgage, if a situation occurs that I need more liquidity, then a
home equity loans will permit lower cost money that can be raised as needed. Ensuring a good
quality long-term relationship with the bank is a good tool in liquidity management. Banks can
offer presanction loans and pre-approved overdraft limits. Not only will banks help with the
paperwork and process but they are eager lenders during times of need.
Financing
With retirement in thirty-one years, I have a cash goal of $400,000. This seems a bit
farfetched, but I am optimistic that is can be done. For starters, a savings plan with compounded
interest at a rate of 2.6% and monthly contributions of $200 would suffice. This would yield me
around $75,000. Secondly is the 401K that both me and past employers have been contributing
to for the past sixteen years as well as continuing to contribute to in the future. This should yield
about $185,000. To top all the savings off will be what liquid assets I sell while “downsizing” to
retire. I expect to sell most of whatever stocks, bonds, CD’s, and real estate that I have
accumulated over the years. This includes some that I have purchased years ago when I knew
nothing about the stock market and was at an event and wanted to fit it. I am glad that I did
because one of those stocks are Netflix, which was something I did not see going as far as it has.
While I have a little more planning to do in this area, I do know that I have not intention as of
now to sell my personal home.
Protecting Wealth
Insurance, insurance, insurance. Many believe that insurance is a waste of money and that
they will never need it, I beg to differ. If I continue full coverage on my vehicles, then it will
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Personal Finance Plan
protect my personal assets in case of the unforeseeable future. I would hate to lose my business,
savings, or home because of an auto accident that was my fault and I did not have enough
coverage. Renters, and eventually home owners, insurance will protect the worldly possessions
that my husband and I have obtained over the years. Many are easily replaceable, and even the
ones obtained through travel, a quick internet search can result in those being replaced as well. If
God decides to call either my husband or myself home, life insurance will see to my children
being cared for. Initially, the thought of whole life was ideal because I would not have to worry
about it for the rest of my life, but after comparing it to term life I have come to the decision that
it is not good for me. If I choose a term of 30 years, it will surpass the time that my youngest
child will turn 25 and all my children should be self sufficient to where they no longer depend on
me financially. Once this term has expired, I will likely purchase an additional twenty years but
at a rate that will be substantial enough to cover my funeral expenses and any debt that I may
leave behind.
Investing
I would personally consider myself a risk taker. I am not satisfied with the tiny interest
that is associated with most saving accounts, CD’s, or money market accounts. I have done this
for my children just so that will have money put aside instead of going into it with nothing, but
for myself and my business plan, this alone will simply not work. This is where I will turn to the
stock market. Stocks have a huge risk associated with them but the payout it extremely
rewarding. While I will save half of the cash inflow (minus expenses) from my trucking
company, the other half will be put into stocks. I have considered less, maybe a quarter, but my
payout will be less. When the time comes and I lose on an investment, I still have the other half
in a CD account accumulating interest waiting for maturity.
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Personal Finance Plan
Retirement and Estate Planning
Retirement is the goal of every human, and to do it comfortably is a bonus. Retirement is
less expensive than working because there is no longer a need to saving for retirement, no more
job-related expenses, and lower taxes due to lower income. To help set a nest egg for retirement I
have taken a few different courses. The first is a 401K with the company that I am employed
with now. Although I do not plan to work for them permanently, the account is through a
reputable company that allows for the transfer of account allocation. This way I can take it with
me at any stage in life and continue to make contributions. The second is an online savings
account that offers a higher interest rate than traditional banks and they offer compounding
interest. The company is well known and have been in business for quite some time so there is
less of a chance for the company to fall apart to where I would lose my investment. As stated
before, I plan to retire at the age of 65 and with the next thirty years of savings with compounded
interest and regular contributions, I should be able to retire comfortably. As for my estate, writing
a will should clearly state how things should be disbursed and should help the process run
smoothly. My companies and personal assets will be distributed evenly amongst my children, or
anyone who has helped me build my empire. I will also identify a power of attorney who can
make financial decisions for me in the event that I am unable to, and a health care proxy who can
make life-or-death medical decisions for me.
Conclusion
When it comes to my financial future, I want to make sure that I am the one in control.
By clarifying objectives and constraints, identifying retirement issues early, and documenting
everything, I hope to have a solid plan in place that aligns with my wishes. As I sit back and
think of where I would like to be financially over the next ten years. I have realized that I have a
9
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Personal Finance Plan
better idea of what I want more than I thought that I had. I understand my specific goal both
personally and financially and I have a general idea of how I want to reach these goals, and I
realize that I need just a little more planning in terms of how I am going to finance my
retirement. When I am done with this plan, I understand that I will continuously have to revisit
this idea to make any necessary adjustment, so I am going to print this and place it on a board
that can hang on my bedroom wall where it can be clearly seen and remembered. Financial
planning is a dynamic process that does not end when I take a particular action. I will need to
regularly assess my financial decisions as changing personal, social, and economic factors will
require more frequent assessments. It's called "financial planning" for a reason. Just like life
itself, plan change and evolve as well. Once the plan is created, it's essentially a piece of history.
10
Related Questions
the concept "pay yourself first". With this in mind, what is your advice to someone on paying off credit card debt and investing for their retirement? Do you feel as though they should pay off all credit card debt before investing for their retirement or is it best to start investing for retirement as soon as possible? Why? * 350 word minimum
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Activity Worksheet #5 (Chapter 5)
Name
1. What should you do if your ATM or debit card is lost or stolen? Why
2.
When might it be appropriate for you to save via a CD versus a money market account?
3. Caryn Thorton age 18, recently received an inheritance of $50,000 from her grandmother's
estate. She plans to use the money for the down payment on a home in ten years when she
finishes her education. Right now the funds are in a savings account paying 1%. How much
would she have in ten years if instead she purchased a ten-year CD paying 4%?
4. Twins Kathy and Mary are both age 25. Beginning at age 25, Barbara invests $2,000 per year
for 10 years and then never sets aside another penny. Mary waits 10 years and then invests
$2,000 per year for the next 30 years. Assuming they both earn 5%, how much will each twin
have at age 65?
5. You want to create a retirement account so you can retire at age 65 (you are now 25). You
would like the account to grow to $1M. The investment can earn…
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5 you dont need to include timeline
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6. Chos Financial Planning Exercise B
eBook
Chapter 5
Financial Planning Exercise
Home affordability analysis
Use Worksheet 5.3. Rachel and Alexander Harrison need to calculate the amount they can afford to spend on their first home. They have a combined annual income of $67,500 and have $37,000 able for a d
payment and closing costs. The Harmsons estimate that homeowner's insurance and property taxes will be $225 per month. They expect the mortgage lender to use a 30 percent of monthly gros cone) mortgage
Worksheet
payment affordability ratie, to lend at an interest rate of 6 percent on a 30 year mortgage, and to require a 10 percent down payment. Based on this information, use the home affordability analysis form i
5.3 to determine the highest priced home the Harrisons can afford. Assume that closing costs are one-half of the down payment. Round the answer to the nearest dollar
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General accounting
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Concept Review 3.4- Future Value of a Tax Savings
Please turn to page 152 of the text and complete Financial Problem 14.
On December 30, you decide to make a $2,500 charitable donation. If you are in the 24% tax bracket and you expect to itemize your deductions, how much will you save in taxes for the current year?
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webwork / mat110e_oncampus_f/ finance.set.3/6
Finance.set.3: Problem 6
Previous Problem
Problem List
Next Problem
Eugene began to save for his retirement at age 31, and for 15 years he put $ 425 per month
into an ordinary annuity at an annual interest rate of 9% compounded monthly. After the 15
years, Eugene was unable to make the monthly contribution of $ 425, so he moved the
money from the annuity into another account that earned 9% interest compounded monthly.
He left the money in this account for 19 years until he was ready to retire. How much money
did he have for retirement?
Retirement amount =
If Eugene had waited until he was 43 years old to start saving for retirement and then decided
to put money into an ordinary annuity for 22 years earning 9% interest compounded monthly,
what monthly payment would he have to make to accumulate the same amount for
2.
retirement as you found in the first part of the question?
Retirement amount =
3.
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Provide correct answer general Accounting
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please solve in great detail
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PLEASE HELP (please try to get an answer close to Ans. $167 884.49 )5.21 Repeat Problem 2.32(a) for continuous
compounding. Ans. $167 884.49 2.32 Ms. Frank is planning for a 25-year retirement period and wishes to withdraw
a portion of her savings at the end of each year. She plans to withdraw $10 000 at the end of the first year, and then to
increase the amount of the withdrawal by $1000 each year, to offset inflation. How much money should she have in her
savings account at the start of the retirement period, if the bank pays (a) 9'10, (b) 7: % , per year, compounded annually?
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Question 25?
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Problem Set for Credit Card Debt
MATH 113: Section 9.4a
Page 2 of 2
3. Rachel is purchasing a new camera that costs $3800 for her photography business. Rachel
uses a credit card that has an APR of 16.99%.
a. How long will it take her to pay off the camera if she makes monthly payments of
$75?
b. How much will she pay in the long run for the camera if she makes monthly
payments of$75?
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Home and Automobile Insurance
Newlyweds Joanne and James have had several milestones in the past year. They are newlyweds, recently purchased their first home and now have twins on the way! Joanne and James have to seriously consider their insurance needs. A family, a home and now babies on the way, they need to develop a risk management plan to help them should an unexpected event arise.
Current Financial Situation:
Assets (Joanne and James combined):
Checking account
$4,300
Savings Account
$22,200
Emergency Fund savings account
$20,500
Retirement Account balance
$26,000
Car
$10,000(JOANNE)
$18,000(JAMES)
Liabilities (Joanne and James combined):
Student loan balance
$0
Credit Card Balance
$2,000
Car Loans
$6,000
Income:
· JOANNE : $50,000 gross income ($37,500 net income after taxes)
· JAMES:$75,000 gross income ($64,000 net income after taxes)
Monthly Expenses (Joanne and James combined):…
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