Final Project-FIN250

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Southern New Hampshire University *

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250

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Finance

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Feb 20, 2024

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Uploaded by melarias142

Final Project Southern New Hampshire University FIN 250: Personal Finance Planning December 10, 2023

Final Project After completing an in-depth financial plan, balance sheets, personal goals and retirement needs, it is more than clear I am not as financially ready as I envisioned to be. By completing multiple worksheets, I’ve gained a deeper understanding of what is required of me to meet all my financial needs. Prior to this course I thought I was in a stable position to fulfill all my wants and needs. Worksheet one initially allowed me to focus on my current short term and long-term goals. Rather than aiming to “save money,” state the purpose of your saving efforts, such as buying a car, and determine exactly how much you want saved by what time (Keown, 2019, p. 7). My goals were focused on major home improvements, paying off debts and saving for my future retirement. Worksheet two focuses on financial objectives, like mentioned previously, most of my goals were based on paying off current debt. This plays a role in both worksheet four and five. Keown (2019) says, their cash mystery spending averages $59 per week, or $3,078 per year, with more than half of them saying their cash tends to disappear most often during a night out (p. 150). Before the course I had the habit of swiping my debit card with no trace on where my money was going. Using worksheets four and five allowed me to expand and better understand my income and determine where my money goes. The balance sheet shows me my assets, liabilities and debts and total net worth. I’ve been provided clarity on where I financially stand and areas that need to be improved. I was caught by surprise that my current net worth is far higher than I envisioned it to be. With the completion of those four worksheets, I’ve created a budget plan that suits me well enough to not spend unnecessary money and fall into the unknown when I look at my bank statements.

Since I recently purchased a home, I decided to complete worksheet nine which focuses on leasing or purchasing a vehicle. My goal for this worksheet was to find a car I was recently interested in and have my doubts about purchasing. After completing the worksheet, I realized that it wouldn’t suit my current financial means and would create a larger debt in my liabilities. It makes no sense to purchase a vehicle that will put such financial strain on you that either other goals or your lifestyle must be compromised (Keown, 2019). The chosen vehicle was a Toyota 4Runner, had I purchased the vehicle with a $5,000 down payment, my monthly payment would be $688 for 72 months. If I opted into leasing the vehicle, I would need to put a $6,783 down payment, with a $566 monthly payment for 60 months. Although the payment difference is a hundred-dollar difference, I would still save over $16,000 just by purchasing the vehicle. In this scenario, purchasing would be the most reasonable option. Of all worksheets, worksheet sixteen is the overall eye opener. Before this course I never realized the requirements needed to live a comfortable retirement. I never considered the funding necessary to give you financial security and independence. Listed below are the chosen stocks to fulfill my retirement shortfall. Stock Name Current Price Expected 5 Return Industry Wingstop WIN G 247.07 20.75% Restaurants Targa Resources Corp TRGP 85.63 21.30% Oil & Gas Midstream Pfizer PFE 28.79 -12.37% Drug Manufacturers Nike NKE 116.11 14.49% Footwear & Accessories Apple AAPL 192.32 6.14% Consumer Electronics Diversification is the process of spreading investments across different asset classes, industries, and geographic regions to reduce the overall risk of an investment portfolio (Lioudis, 2022). According to my worksheet I would need to make an annual deposit of $4,522 to cover my

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shortfall of $1,815,289. I decided to diversify my stocks to fill in the gap if one stock did not do as well as another. Based on my current income and my current cost of living I would need to make a decent amount of changes. One change would be the choice of career, although I’m in the military, the pay we receive would not cover everything I need to live a comfortable retirement. If I complete twenty years in service, I will be allotted a pension which would help upon my retirement. The type of retirement plans you’re on depends on when you entered the military, but the two major plans include both a pension and thrift savings plan, though you can only get the pension part after serving for 20 years (Gerson, 2022). Another source I would receive are veteran benefits. Aside from that, I would still need another source of income. Another change required of me is cutting out most of my debt outside of my home purchase and car. I need to be better at saving money or applying that money to the goals listed on worksheet twenty. Overall, all the worksheets have assisted me in creating my current and setting goals. Worksheet twenty focuses on exactly what I need to save on and my anticipated completion dates. Priorities are as follows, saving three months of living expenses, paying off debt, saving for a home project, saving for a second home down payment, saving for retirement and having money to the side to assist my parents with their retirement. My goal is to place annual deposits into a CD and allow my money to grow over time. To accomplish these goals, I will need to maintain my income statement and ensure I save the required money.

References Gerson, E. S. (2022, August 3). How military pensions work . Investopedia. https://www.investopedia.com/how-military-pensions-work-5271044 Lioudis, N. (2022, June 15). The importance of diversification . Investopedia. https://www.investopedia.com/investing/importance-diversification/ Keown, A. J. (2019). Personal finance: Turning money into wealth (8th ed.). Pearson Yahoo! (n.d.). Yahoo Finance - Stock Market Live, quotes, Business & Finance News . Yahoo! Finance. https://finance.yahoo.com/