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Instructions:
Making Investments and Finishing Your Financial Plan
Making Investments and Finishing Your Financial Plan
You did such an outstanding job with Frank’s finances during your previous assignment that he has hired you as his financial consultant. Frank’s financial house is in excellent order thanks to you. He’s sticking to his monthly cash flow plan, and he’s paid off all of his debts except for a house he recently bought with a mortgage, and he’s built up a sizable emergency fund to help him deal with unforeseen events in the future. Frank is able to set aside $400 per month for investment
purposes. Of course, he has no idea how to proceed and is turning to you for your vast experience in this field.
The concept of risk is one of the first things Frank should learn about investing money. Describe the five components of the risk factor in detail. Outline a risk-reduction strategy based on the factors that affect investment risk.
Frank’s coworkers are always talking about the stocks they buy and sell on a weekly basis, and Frank is completely overwhelmed by the number of stock transactions his friends make in a week. Frank believes he will have difficulty deciding whether to buy or sell a particular stock. Give Frank some ideas for reducing his anxiety when it comes to making stock investment decisions.
3. This information has been extremely beneficial to Frankthank you! Frank now requires an investment strategy for the stocks he intends to buy.
Provide Frank with an analysis of his stocks’ long-term and short-term investment strategies.
4. Now that Frank has a plan in place for his newly acquired stocks, he’d like to add some bonds to his investment portfolio. Frank’s issue is that he has no idea what types of bonds are available.
Explain to Frank the different types of bonds he could use in his investment portfolio.
A friend of Frank’s told him last week over lunch that she invests all of her money in mutual funds. Frank was on the verge of passing out because he had no idea what she was talking about and realized he had a lot more to learn about
investment vehicles.
Describe the concept of a mutual fund to Frank, as well as the characteristics of mutual funds.
Excellent work. Frank now has a much better grasp on mutual funds. Frank learns that he can choose from a variety of mutual funds for his 401K portfolio after meeting with his company’s human resource director. Frank just texted you,
requesting the following information: Explain to Frank the various fund categories in which he can invest his 401(k). Choose three categories in which you would advise him to invest as he embarks on this adventure.
Your financial advice has proven to be an invaluable resource for our friend Frank once again. Explain to Frank both the advantages and disadvantages of real estate investments. He loves his new home and is wondering if real estate would be
a good investment vehicle to include in his overall portfolio.
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So, you’ve been a fantastic personal financial planner for our friend Frank, and his life is benefiting from your vast knowledge of the subject. Frank has bought a nice house, has two nice cars that he paid off thanks to your advice, has gotten a promotion at work as a senior computer programmer/gamer ($87,000 per year salary), and has started a small online gaming consulting business on the side. He married his childhood sweetheart, and the couple is expecting their first child by
the end of the year. Frank, you rocked it!
Frank’s financial plan must now be completed with insurance, retirement, and estate planning.
With all of the recent changes in Frank’s life, he now needs to factor in financial considerations that he never had to consider when he was young, beautiful, and single. He needs to lower the level of risk associated with potential financial loss.
? Outline and explain the four Risk Management Methods that Frank can use to lower his risk of financial loss.
? Which approach do you recommend Frank take?
Frank is still a young man, and his employer has agreed to match his 401K retirement plan up to $10,000 per year at 100%. Frank thinks that sounds fantastic (and it is an incredible deal), but he wanted to buy a $10,000 bass boat this year and
will consider retirement later.
? Persuade Frank of the importance of beginning to save for retirement early in life. How would you persuade Frank to contribute to the company’s 401K plan, which is matched 100 percent? ($10,000)s? How much money is Frank giving back
to his company (philosophically speaking) if he only contributes $2,000 to his 401K plan?
10. Your persuasion worked, and Frank is taking full advantage of the company retirement plan. You’ve gotten Frank so excited that he’s considering opening an Individual Retirement Account, or IRA. There are many different types of IRAs, but Frank has narrowed his options down to two.
? Explain the differences between a Traditional IRA and a Roth IRA to Frank, and then recommend which one he should invest in. What is the maximum amount of money Frank can put into an IRA in a calendar year?
11. Last but not least, I have a question for our good friend. Frank, like 70% of the population of the United States, lacks a will. He believes he is still young and that estate planning is something he should do later in life.
Persuade Frank of the value of estate planning and the necessity of having a will. What is Frank’s strategy for obtaining a will? Frank has a sizable online presence as a computer programmer and gamer. He has a second website that generates revenue, keeps his Facebook and Instagram pages up to date on a daily basis, blogs about game development, and regularly updates his Linked-in and eBay pages.
Explain to Frank what kind of will he needs to protect the online content he created.
DELIVERABLES:
You must explain each answer in detail to receive full credit for this project. To complete this project, use your textbook, notes, and Internet research.
? This project is worth 200 points.
? This project should be at least 1,200 words long (not including the repetition of the question or references). For full credit, each question must be answered.
? Provide a number and/or a brief heading. Please do not copy and paste the questions into your work. To get an accurate word count, I’ll simply delete the question’s wording.
? The document should be sent in either Microsoft Word or PDF format. Include a title page with your name and the project’s title. Your project should be saved with your name in the file name.
o For instance, my filename would be petra ray Project 3 Investments. Examine the
Tip
If you answer three questions per week, you’ll be able to complete this project without stress by the deadline!
The due date can be found in your Course Organizer.
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Link to a grading rubric and an example of how to format your projects
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that I have made available to you.
Making Investments and Finishing Your Financial Plan
RUBRIC |
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Excellent Quality 95-100%
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Introduction
45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Literature Support 91-84 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met. |
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Average Score 50-85% |
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided. |
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration. |
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met. |
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Poor Quality 0-45% |
37-1 points The background and/or significance are missing. No search history information is provided. |
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration. |
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met |
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Making Investments and Finishing Your Financial Plan |
Making Investments and Finishing Your Financial Plan