You are a financial adviser and have been employed to write a report recommending a financial plan for your clients (the Wellington family). This plan will be based on their current financial circumstances, and you will need to justify your advice. Income : Ben - aged 42 net monthly $6200 Prue- Age 39 net monthly $1100 Assets: House $680 000 market value Joint bank savings account $12500 Bens supperannuation $85000 currently invested in a cash fund. Prue's super : nil. Ben's redundancy payout from previous job $58000 Other investments: nil. Liabilites: Outstanding 4.75% variable rate mortagage $180 000 Credit Card balance (interest rate 17.5% pa.) $4400 Cost of necessary home repairs $4000 Cost of upgrading car: $5000 CHILDREN GOALS: Luke, 17, is completing high school and hopes to commence work as an apprentice electrician next year. Brook is age 15 and wants to study drama at university after completing high school in 2 years. BEN AND PRUE'S GOALS: Ben intends to continue working fulltime for the next 20 years and is in hurry to pay out the mortgage early. Similarly, Prue intends to continue working part time. They both agree they want to build up savings for their retirement in the most tax effective manner and to make better use of long term investments such as shares.. THIS IS REALLY CONFUSING ME?!? I NEED HELP!! AND ADVISE WILL BE GREATLY APPRECIATED.
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They are not giving you any guidance here. You need to find out what the savings rate is. I will assume 10% or about $700 a month. I would put it in the deferred savings plan and get it vested in the market. I would maximize the previous super and top load Ben since he is older. After he is maximized I would max out Prue. I see a glaring life insurance need, about $800k for Ben and about $250 for Prue. 20 year term should do the trick. It is very vague, but that is how I would do it in real life.
