University of New South Wales

University of New South Wales

FINS5510 Personal Financial Planning 23T2

Financial Plan Assignment

Student Details:

Student ID: Z5426379

Given name: Amin

Family name: Lalani

Degree program: Master of Commerce

Country: Australia

Word count: 9431 Excluding Reference List

Student Declaration:

This assessment is my own work and has not been done in collaboration with anyone else.

Contents

TOC o "1-1" h z u 1.Current Situation (Unit 1) PAGEREF _Toc142529568 h 22.Life Planning (Unit 2) PAGEREF _Toc142529569 h 83.Financial Strategy (Unit 2) PAGEREF _Toc142529570 h 124.Financial Independence (Unit 3) PAGEREF _Toc142529571 h 165.Career Strategy (Unit 4) PAGEREF _Toc142529572 h 186.Property and Loans (Unit 5) PAGEREF _Toc142529573 h 207.Risk Management (Unit 7) PAGEREF _Toc142529574 h 228.Taxation Planning (Unit 8) PAGEREF _Toc142529575 h 239.Investment Strategy (Units 9 and 10) PAGEREF _Toc142529576 h 2510.Action Plan (Unit 10) PAGEREF _Toc142529577 h 2811.Compliant Statements of Advice (Unit 6) PAGEREF _Toc142529578 h 29References PAGEREF _Toc142529579 h 30Appendices PAGEREF _Toc142529580 h 32

Current Situation (Unit 1)Please refer to Financial Plan Assignment Instructions for what you should write in this section.

Basic Information

Age: 25

Gender: Male

Relationship: Defacto (Getting Married soon)

Dependents: None

Country of Residence: Australia

Residential living circumstances: Currently renting at $464 per week, shared between my partner and I

Current mode of study: Full-Time

Current Employment Status: Full-Time

right159091Figure 1.1 Income Statement July 2022 June 2023

00Figure 1.1 Income Statement July 2022 June 2023

Income Statement

284513241427My partner and I keep track of our incomes and expense on the app called Spending Tracker. This is where we add all the cash flows. We have made different sub-accounts inside the app where joint expenses such as rent, and bills are added over there while our personal expenses are added under our separate sub-accounts.

Figure shown is the total income and expense of my share (joint expenses are divided equally). Many categories include many different things such as:

Bills include electricity, gas and internet.

Car includes rego, service and cleaning.

Subs include different subscriptions such as Amex, Netflix, OneDrive. Some of which are annual expense while some are monthly. This can be seen in figure 1.4.

To calculate car depreciation, I have used 12.5% depreciation Prime Cost Formula for next 8 years (ATOtaxrates, 2022). This formula helps me keep depreciation simple even though I do understand that depreciation can vary based of the year of the car, make etc. Toyota Corolla was purchased in 2022 for $40,000 = $5,000 depreciation for 8 years. If I do decide to sell the car after those 8 years, I can add this as a cash inflow.

To back track an income or expense, we leave a note with the expense that allows us to see the type of expense/income in the category as well as the date of expense/income. Figure 1.2 is an example of notes added on the expenses while Figure 1.3 is an example on how we organise repeated expenses by adding repeat function. If the amount changes, we can change the future amount to be updated number. For example: over the next few months, rent is going from $464 to $510, we will be updating this on our spending tracker app for our future income statement to be updated as well.

115570698500right688000

716280284480Figure 1.2. Notes Added on Expense

00Figure 1.2. Notes Added on Expense

481705317070Figure 1.3. Repeated Transaction

00Figure 1.3. Repeated Transaction

1433015588Figure 1.4 Income Statement Monthly Breakdown. July 2022 June 2023

00Figure 1.4 Income Statement Monthly Breakdown. July 2022 June 2023

-13652537782500

368449794937Figure 1.5. 2-year Balance Sheet Comparision

00Figure 1.5. 2-year Balance Sheet Comparision269494037528500Balance Sheet

I have been keeping track of my balance sheet and update this on a bi-annually basis.

I have invested in several different assets which includes shares, collectables (coins and notes) and cryptos. Changes can be seen for many categories such as:

Shares and Crypto are the present value as of 30th June 2023. They have not been sold or bought during the year and so have not been reconciled in the income statement.

Collectables were given as a gift to family and friends and so have been added as an expense to the purchase price.

Change in car price can be seen as there was change in car, sold old one and purchased a new car.

Annual leave balance was added as I do not use this during the year at all and choose to save up as a cash out once I leave this job. This allows my annual leave to be eligible for 17.5% bonus loading which is higher than inflation rate if I were to cash this out and invest. The increase in balance was from accruing more leave + guaranteed bonus.

4817110163830Figure 1.6. Current Aware Life Insurance

00Figure 1.6. Current Aware Life Insurance

Insurance

3916907899400Types of Insurance:

40594041179982004817423907254Figure 1.7. TAL Life Insurance Quote

00Figure 1.7. TAL Life Insurance Quote

Death Cover = Yes (Aware Super Company). Details can be found in Appendix 1. This has been taken out under superannuation in July 2023 and will be added in income statement for current financial year as an mention. As mentioned during lectures that this is usually a cheaper than taking it outside super account. This is correct based on my experience. Currently Aware Insurances underwriter is TAL insurance which is costing $11.89 per month figure (1.6) while getting exact same insurance directly from TAL is quoted at $24.94 per month (figure 1.7).

Total & permanent Disability (TPD) = None

Income Protection = None

Home Insurance = None

Motor Insurance = Yes Comprehensive Insurance (NRMA)

Private Health Insurance = Yes (Medibank)

Travel Insurance = Yes (Via Westpac Credit Card Member Perks Free Travel Insurance)

Estate Planning

Currently there is no will in place, but I have made by partner 100% beneficiary under my life insurance. In an event of accident, my partner and I will have the power of attorney for health and financial decisions for the other person.

Wills for myself and my wife will be created after getting married with a solicitor as having is a valid will is very important for me. Both wills will be created separately with separate solicitors so that there is no influence on each others decision and are making decision on personal choices.

The backup clause to be updated as we have kids because I would like to add them under the will as beneficiaries. There will also be a sub-backup clause if all family members in the previous back-up have passed away, all financial assets will be going to charity foundation that we plan to discuss in future.

My wifes bother will be appointed executor and backup executor will be a law agency in the event he refuses, or family disagreements are getting serious.

The distribution I would like to include in my will are as follows:

Option 1: 50% Wife, 25% Child 1, 25% Child 2

Option 2 if Wife passes away: 50% both children.

Option 3 if one child passes away: 50% wife, 50% other child.

Option 4: If both children pass away: 100% wife.

Option 5: If the wife and both children pass away: 100% to charity to be decided later.

Will be regularly updated every 10 years as life progresses and every 5 years after turn 60 years old. This is because by then, I expect to have grand-children and would like to leave some to them.

Anticipated Irregular Cash Outflows

There are few anticipate irregular cash outflows that are expected to arise within next 5 years. This includes (in order of expected occurrence):

Engagement in August 2023: Ring ($4,000), Travel ($3,000), Photographer ($500), Food ($500) and Shopping and other ($1,000) = $9,000.

These numbers are based on already purchase of ring, travel tickets, quotation from photographers and researching potential locations.

Overseas Summer Internship in Jan 2024: Ticket ($1,800), Accommodation ($2,130), Food ($500), Outing and Entertainment ($1,000), Shopping and other ($1,000) = $6,430.

These numbers are based on accommodation arrangement cost given by UNSW, Travel ticket cost based on Flight Centre and past travelling budgets made.

Small Wedding May 2024: Rings ($2,000), Location and Design ($10,000), Food ($5,000), Event Planner ($2,500), Musician ($500), Other ($2,000) = $22,000

Honeymoon August 2024: There are two options discussed between my partner and I (see appendix 1.4). The expected budget will be between $23,000 - $27,000.

Home Deposit Dec 2027: While our priority for next year is to focus on myself graduating from university and get a job as well as getting married, we expect to decrease our operating leverage (which is already in place for expected expenses mentioned above). We will rigorously save for a deposit from Dec 2024 over the 3 years. As per our budgets, we can save around $200,000 combined as 20% home deposit.

Life Planning (Unit 2)Life Values and Principles

Value Principles

Achievement (Shwartz, 1992) I will always work hard and smart so I can succeed in my work industry.

Gratitude (Harris, 2010) I will daily show appreciation for being able live and experience things around me.

Contribution (Harris, 2010) I will aim to go at least once every 3 months some type of volunteering service for the betterment of the community as well as helping others whenever I feel they need help.

Life Purpose: My lifes purpose is to be able to leave a positive mark on this world that can bring better quality of life which includes being able to donate time and money for volunteering work. In addition to that, I want to raise my children well and educated so that they can continue this too.

Value 1: Achievement

I chose achievement as a value because there are many people that think about doing several things in life but they lack motivation or do not know where to start. I have life goals that I want to achieve so that I can make a difference for my family and everyone in the society and this is my biggest motivation to show future generations an example of if you work hard and smart, you can succeed.

Value 2: Gratitude

I chose gratitude a value because no matter what anyone believes in (God or not), being able to breath and live in a safe and prosperous country like Australia after coming back from a developed country shows that you should not take things for granted because there are many people in this world that are suffering to even meet basic human needs.

Value 3: Contribution

I chose contribution as a value because it aligns with my other two values because I have seen suffering of many people unable to afford anything and which impacts on future generation. I want to make a positive difference in as many lives as possible because the 1 person have all the money vs several people with enough money is worth a lot more.

Life Stages

Life Path Age range

Student 24 26

Graduate 27 29

Couple with dependent children 29 32

Mid-Management role 33 51

Senior Management role 51 55

Couple with adult children 56 60

Financially Independent Couple 60 85

Life Path Student Life Stage (Current until June 2024

This is my current life stage where I am studying full-time while working full-time as well. I am in a defacto relationship and planning to be engaged in coming month. I am currently renting a unit with my partner.

Life Path Graduate (July 2025 - June 2027)

This is my expected next stage of life starting next year where I expect to graduate from university by May 2023 and start a Graduate role first half of 2025. In this stage, I see myself gotten married to my partner and we are starting to save for the upcoming home deposit over the next couple of years while starting to plan for our first child.

Life Path Couple with dependent children. (July 2027 - June 2029)

In this stage, I am working as a Senior Analyst while my wife is still at home with our two young kids but have now started to work part-time. We have just moved into our new place.

Life Path Mid Management Role (July 2029 - June 2048)

In this stage, I am at a Managerial position while my wife is also working, and we are raising young kids while trying to pay off mortgage and invest. We are also trying to teach kids about religious studies over the weekend and they have started to play sports too.

Life Path Senior Management Role (July 2048 June 2052)

In this stage I am expecting that by this stage I will be in a higher position of either a Venture Capital Firm or FinTech/Banking Sector as a Senior Manager, my wife will also be working in a similar field and position. Our kids are now teenagers so are somewhat independent. We do go on annual trips overseas and local trips. I am also investing in startup seed investment as an angel investor while also donating for poor and religious activities.

Life Path Couple with Adult Children (July 2052 June 2057)

In this stage I am expecting to pay off the mortgage with my wife and are planning to spend time for our kids as during this age they will be starting to get married. I plan to be semi-retired by this age. Extra time from working less will be dedicated to helping others in need and religious/community service.

Life Path Financial Independent Adults (July 2057 onwards)

By this age we have accumulated several income streams that will allow us to be fully retired and so we can spend time with grand-kids, travel rest of the world and spend time for community service.

Life Goals

Life Path Life Goal Career Goal Financial Goal Dwelling Goal

Student Get Engaged by 21st Aug 2023 with $10,000 budget Have an internship experience by 30th May 2024 Save minimum $250 per week (25% of net income) until Aug 2024 to contribute towards marriage and honeymoon Not currently planning

Graduate 1. Get Married by 30th June 2024 with $22,000 budget

2. Have 2 months honeymoon in Europe by 30th Aug 2024 with budget of $27,000. Secure a graduate role by Jan 2025 at either one of the big four banks or FinTech company like Stripe/Block earning over $70,000 per annum + Super. Save $50,000 by 31st Dec 2026 for the first property Save to Buy a 2-bedroom house in Penrith area for up to $680,000 by 31st Dec 2026

Couple with dependent Children Have 2 children by 30th Dec 2029. Secure a Senior Analyst role in the industries mentioned above by 31st Dec 2027 earning over $100,000 + Super Save $20,000 Financial Slack by 31st Dec 2027 Buy a 2-bedroom unit in Blacktown area for up to $680,000 by 31st Dec 2026

Mid-Management Role Spend at least 1 weekend per month in religious volunteering with my wife and kids by 30th June 2040. Secure a Senior Manager Role at an Investment Firm or Big 4 bank by 31st Dec 2037 earning $200,000 + Super. Save over $100,000 in financial slack investment + $100,000 in high growth investments by 31st Dec 2040. Buy a 3-bedroom house in Blacktown Area for up to $1.1 Million by 30th Dec 2040

Senior- Management Role Travel at least once a year overseas or domestic with wife and kids by 30th Dec 2045. Work at executive position in either FinTech company or VC Firm by 2050 earning over $300,000 + Super Save over $300,000 in high growth investment and $200,000 in low growth by 30th Dec 2046. Renovate primary home to a 5 bed-room double storey house that will cost $200,000 by 30th Dec 2049.

Couple with Adult Children Contribute at least once a fortnight towards either helping in religious services or external community charity events by 30th June 2055 Sit in a at least 2 company boards paying $100,000 each by 31st Dec 2052 and quit daily job so that it is a Coast FIRE Have super balance of over $500,000 and High-growth Investments including Shares of over $1,000,000 by 31st Dec 2055 Pay off house mortgage by 31st Dec 2055

Financially Independent Couple Visit at least 95 countries out of 195 countries in the world by 23rd Aug 2060 Financial Strategy (Unit 2)To achieve retirement by 2052 at the age of 55 with Coast FIRE lifestyle, there is a financial strategy that will be considered with different goals over the different life stages. For the early life stages, there is a forecasted weekly income statement showing all transactions including savings and investment budgets. All shares investment giving dividends will be re-invested to grow the portfolio quicker.

36234805099Figure 3.1. Fortnightly Income Forecast until June 2024

00Figure 3.1. Fortnightly Income Forecast until June 2024

Student Life Stage (Current until June 2024)

359346515368900Financial goal during the current life stage involves mainly saving for irregular cash outflow of getting married in Aug 2024 with $24,500 each (49,000 for both of us) budget for honeymoon and wedding. At the current income and savings of 26.5% for net income ($250 per week and excludes super) in my current BOQ high interest account of 5.45% (calculated and daily monthly), I will be able to save $12,304 (Annuity formula used. Figure 3.2). Remainder $12,196 from $24,500 will be given as a gift from my father.

-225235768170Figure 3.2. Annuity Formula

00Figure 3.2. Annuity Formula

left122511400During this life stage, I do not plan to use salary sacrifice option towards super as I would be planning to use all the savings. Current superannuation balance as at $17,320 as of 30st June 2023 which is expected to increase to $25,347 ($262.31 per fortnight employer contribution after super tax + 5% real return minus life insurance premium).

3909695109220Figure 3.3. Fortnightly Income Forecast Graduate Life Stage

00Figure 3.3. Fortnightly Income Forecast Graduate Life Stage

Graduate Life Stage (July 2025 - June 2027)

37623751270000During this next life stage starting in Aug 2024, I will be further decreasing my operating leverage to save $25,000 for the home deposit by 31st December 2026. This will be my contribution towards $175,000 home deposit my wife and I plan to have out of which she already has $150,000 deposit saved.

Currently Australia has one of the highest interest rates since 2008 (Trading Economics, 2023), over the next few years RBAs cash rate is expected to decline by mid-2025 (RBA, May 2023). If my current high-interest rate account drops from 5.45% to 3% with annuity payments of $700 per fortnight calculated and paid monthly (Figure 3.3. showing savings), I will be able to save $39,952 by 31st Dec 2023. Since the savings goal is $25,000, all additional savings will also be contributed by myself towards the home deposit so that it is fairer of my contribution towards our home being as much as possible as my wife will already contribution more than 50% of the home deposit.

Superannuation rate increase by 0.5% over the next 2 years will allow superannuation balance to increase higher than before along with new graduate role with $70,000 + super. By 31st Dec 2026, superannuation balance is expected to increase to $43,519 ($296.15 per fortnight employer contribution after super tax + 5% real return minus life insurance premium).

Couple with dependent children (July 2027 - June 2029)

Rather than two incomes between us, there will be one main income from my employment while my wife will be taking care of our children for the first few years. This will lead to operating cost to be higher than. To overcome, we will be building a bigger financial slack to have up to $20,000 ($10,000 my contribution) by 31st December 2027. This will be just before we are starting to have our first child and have two children by 31st Dec 2029.

Since, I am expected to finish my graduate role and start working as a Senior Analyst ($100,000 + Super), I will be able to save an average of $390 per fortnight over the 1 year while also saving $350 per fortnight to invest in high growth assets. This is also because we are repaying home 25% quicker than minimum repayment (see in property section). Financial slack will be stored in property off-set account to decrease interest paid on the property and will be drawn only if necessary while high-growth investments will include increase in international ETF and Australia blue-chip companies with high dividend payouts. This will allow me to manage risk exposure. Once we reach our financial slack and high-growth investment target, we will start salary sacrificing.

Any bonus paid will be kept separate during the short-term as they will be allocated toward startup ventures as an angel investor. This will most likely be through angel investment pools such as Sydney Angels. These angel groups allow new angel investors with insights on how to invest and what to look for.

By end of this life stage in 2029, my super balance is expected to be around $68,663. This is due to the following:

Super from before = $43,519

Employers contribution $70,000 salary between July 2027 Dec 2027, $100,000 salary from Jan 2028 June 2029) = $21,846.

Expected real returns = 5% per annum

Mid-management role (July 2029 - June 2048)

Over the next 7 years, I expect to be promoted 2 times to now be earning $200,000 per annum + super, and since my wife would have also started to work since 2031, I expect to save over $100,000 in high-growth assets and $100,000 in financial slack 31st Dec 2040. This is because my wifes expected income of $115,000 + super will allow us to start contributing at least 2.5% of our net income towards donations and charity events. This is mainly involving donations towards religious ceremonies and celebrations.

Furthermore, we will set a budget of $10,000 per annum for one trip as a family per year so that our kids can start experiencing and understand different cultures around the world. In addition to investing in high-growth asset, saving of over $350 per week over the last 5 years will allow our savings to reach $100,000 along with additional house repayment to be over $360,000 during which we will start to look for a property in Blacktown area for up to $1.1 million. This because we would like to be near our family that are living in Blacktown and kids can spend more time with their grandparents too.

If there are any bonuses paid during the time will be invested in startup ventures as angel investor.

We will also be starting salary sacrifice (to concessional cap of $27,500 each to further accelerate our super balance as well as taking advantage of tax savings which by now my super balance at the end of June 2037 (just prior to Senior Manager role) is expected to be $68,332, (7 years x $12,000), 5% average return = $159,948.

Since salary sacrifice + senior manager role =

$27,500 per annum

Employer contribution = $24,000 per annum

Number of years = 11

Expected real return = 5%

Previous balance = $159,948

Total = $762,770 as at June 2048.

By this stage we expect to have acquired over $3 million in total assets (40% combined in Super + <$500,000 house and <$500,000 in other assets.

3454324135957Figure 3.4. CBA Home Loan Calculator

00Figure 3.4. CBA Home Loan Calculator

Senior Management role (July 2048 June 2052)

357686935107000During this life-stage our aim is to pay off the mortgage by 2057 so that we can decreasing working and work just enough to pay some of the expenses as biggest expense of mortgage will be finished. This will be done by being able to work as an executive in either a VC or FinTech firm with more than $300,000 per annum + super.

More than 75% of the high-growth investment will be directed towards safe blue-chip investments by 31st Dec 2057 that have strong dividend history which will allow us to spend more time with our kids.

6070607620Figure 3.5. Weekly Combined Income Forecast Senior Management Role

00Figure 3.5. Weekly Combined Income Forecast Senior Management Role

74561320383500

Couple with Adult Children (July 2052 June 2057)

By now, we expect our kids to have grown up and be able to financially look after themselves. If there are potential startups exist from my investment as my wife is risk averse when it comes to investing in startup companies, we plan to start Barista FIRE by 2052. This will involve working part-time either as a board member of multiple companies paying more than $100,000 for each of us or part-time consulting and paying off the mortgage quicker.

Financially independent couple (July 2057 onwards)

By this life stage, we aim to be financially independent with house paid along with superannuation balance of more than $1 million each and investment portfolio of over $1 million each. This will allow my wife and I to spend more time volunteering and contributing to the society more often. As we expect our kids to have been grown and have their own families, we aim to spend more time with our grandchildren as well.

We plan to have multiple sources of income that will contribute to annual $133,333 income will be the following:

Super income from both accounts, growing perpetuity.

Dividend income from both accounts as most of the investment had been directed towards blue chip companies.

In terms of drawing from the investment, we will now switch to conservative investments which includes blue-chip shares with strong dividend history such as big 4 banks, super balance to be decline overtime with regular payments.

Financial Independence (Unit 3)32377891020919003418764509327Figure 4.1. RBA Inflation Calculator

00Figure 4.1. RBA Inflation Calculator

To be financially independent, I believe savings on more than $4 million ($133,333 per annum) between myself and my wife by 31st Dec 2057 will be sufficient to have a modest lifestyle for us. This is based on the FIRE Rule of Thumb from week 3 where comfortable lifestyle for a couple $2.04 million. This was then added to RBA pre-historic inflation rate calculator of last 25 years with an average of 2.6% inflation, $2 million will be $3.89 million ($1.9Mil each).

To achieve this financial independence, we will be buying our first residential home much smaller (budget $680,000) than pre-approved loanable amount ($900,000) in Penrith Area, allowing us to increase our repayments to higher than minimum and saving on long-term interest payments. This loan will have an offset account where we will be saving maximum amount of financial slack to further decrease interest payable. While we build principle in our home, we will also be investing in different portfolio such as international high-growth shares and ETF as well as start-ups as angel investors. Once we my wife and I have raised our kids to at least 10 years old and are earning combined $300,000 or more, we will start to contribute maximum amount as salary sacrifice toward super.

Sources of income that will contribute to annual $133,333 income will be the following:

Super income from both accounts, growing perpetuity. This will only come into effect once after 2057 while we aim to decrease working 2052.

Dividend income from both accounts. During retirement age, high growth investments will be changed to dividend income investments such as blue-chip companies like Westpac - 6.3% average (Simply Wall St, 2023) and ANZ 6.4% average (Simply Wall St, 2023). Expected investment combined by both of us by age 60 is expected to grow to $2 million. The annual 6% payout minus 2.5% inflation will provide us with $70,000 per annum income.

Potential startups exist from my investment as my wife is risk averse when it comes to investing in startup companies.

Barista FIRE. This will involve working part-time either as a board member of multiple companies paying more than $50,000 for each of us or part-time consulting.

Accumulation phase of superannuation is an important first step of building enough capital in the account as soon as possible to reap compounding benefits of them over coming decades. To have combined $2 mil in super account by 2057 growing above inflation (inflation being at 2.5%) with assumption of real investment of 5.45% per annum (Aware Super Balanced growth returns after fees and tax) will be $59,000 per annum. This can be seen by using the growing perpetuity formula = 2 million times (real growth rate minus inflation). During accumulation phase, we will start salary sacrificing from July 2029 = age 32. This is because prior to this, there are several irregular cash outflows that will require net income to be as high as possible. Contributing towards a superannuation balance of $27,500 per annum each on top of employers contribution will accelerate initial capital, allowing this to compound and expected to reach our target quicker.

-3449002086003Figure 4.3. Wifes Super Accumulation Projection Calculator Aware Super

00Figure 4.3. Wifes Super Accumulation Projection Calculator Aware Super

-53214056056300-409433114177Figure 4.2. Amins Super Accumulation Projection Calculator Aware Super

00Figure 4.2. Amins Super Accumulation Projection Calculator Aware Super

As per the Aware Super projections, if my wife starts with $68,663 (expected super balance by July 2029) with $27,500 salary sacrifice per annum and employers contribution on $100,000 (inflationary salary increase) and in balanced investment portfolio (5.45% return after fees and taxes), her projected accumulated balance will be $984,802 by age 60 assuming 3 years career break while having kids. Balanced investment portfolio is based on her risk profile while my expected accumulated balance will be $1,225,483 since I will be investing in high growth (average return 6.7%).

Few assumptions needed to be mindful when looking at this projection:

422891551600Inflation average taken is 2.5%

Salary growth assumptions is 4% per annum (1.5% higher than inflation)

Deflator before retirement is 4%

Calculator assumptions is $50,000 of personal assets. This is negligible as this is only used for asset test for age pension.

After age 60, my wife and I will be drawing $59,000 combined from our super accounts as income and rest from dividends payment. Aware projections calculations are assuming of taking out balance higher than required. Combining both, calculations after 60 shows decline in super if $121,892 are taken out annually ($66,082 from mine and $55,810 from my wifes super). Since we are aiming to withdraw $59,000 (more if needed on rare occasion) and the rest coming from dividend payments, our super will last much longer even after changing from balanced and high-growth investment to conservative investment just to meet inflation.

Since there is no tax on super withdrawals after age of 60, there will be tax only paid on dividends. However, most of blue-chip companies dividends are fully franked, providing investors with franking credits.

Career Strategy (Unit 4)Labour Market: I initially plan to compete in the banking and finance sector with expertise in Financial Technologies starting as a Graduate and quickly understanding the industry to be able to get promote. This is because FinTech sector is an upcoming industry that has seen exponential growth and shift from traditional finance move toward digital economy (Business Research Insights, June 23). I plan to stay in Sydney throughout the course of my career life as my priority is to be near my family which is all in Sydney.

Economic cycle: Current market trends in H1 2023 has seen decline in jobs due to inflationary pressures and investors demanding companies to be better positioned for future, demand for FinTech jobs in payments sub-industry have still seen to grow rapidly in Australia and Internationally since covid (KPMG, July 2023). This will allow me to be competitive in the job market with skills directly aligned with the company demands. If I do not manage to gain a job in a top tier company, I will also apply in smaller companies so that I can better position myself once economic outlook is looking better.

Structural change: FinTech sector is in better position and is growing rapidly which allows my skills to be in high demand. According to FinTech Australia, industry is facing a big challenge to finding enough talent which has allowed employees to be on more than 25% higher salaries than traditional jobs in every job title (FinTech 2022). Australian Government is also providing FinTech industry with several subsidies and grants so that local talent is also to compete in this space internationally and are much bigger players over the next 10 years (Australian Trade and Investment Commission, 2023).

Values: My values directly align with the career path that I have chosen because the world is becoming interconnected with technology and finance which can improve the world to be using less environmental resources for doing this more efficiently. By working in the FinTech sector, I want to help the community through knowledge and be able to help each other out.

Personality: My personality aligns with my chosen path because there are many people that lack education on how to use the growing trend of FinTech. As I understand this sector better, I have already been helping people around me on how to use this space to better improve their lives and those around them while also be careful about risks associated with the industry.

Work styles: Current shortage of employees in the industry that lacks the expertise demands employees to be working more than normal hours which aligns with my current needs as I would like to work more to be to gain as much knowledge as possible and save for the future and retire earlier.

Career goals: Different career goals are planned for different stages of life:

Graduate: Secure a graduate role by Jan 2025 at either one of the big four banks or FinTech company like Stripe/Block earning over $70,000 per annum + Super.

Couple with dependent Children: Secure a Senior Analyst role in the industries mentioned above by 31st Dec 2027 earning over $100,000 + Super.

Mid-Management Role: Secure a Senior Manager Role at an Investment Firm or Big 4 bank by 31st Dec 2037 earning $200,000 + Super.

Senior- Management Role: Work at executive position in either FinTech company or VC Firm by 2050 earning over $300,000 + Super.

Couple with Adult Children: Sit in a at least 2 company boards paying $100,000 each by 31st Dec 2052 and quit daily job so that it is a Barista FIRE.

Career strategy: There are several avenues I am and will also be persuing in future to stay informed and connect with industry its leaders along with better improving my skills. I am currently studying for a Master of Commerce Major in FinTech, and Strategy & Innovation. I also plan to be a member of FinTech Australia, NSW Startup Hub and other incubator such as Startmate. I also participate in industry networking which includes FinTech Summit.

Risk analysis: One of the biggest risks I see, especially in the start of the career is not getting a Graduate role in the FinTech or banking industry which can potentially cause my life and career goals to not be intact. However, in order to plan for this I had already started applying for graduate roles to see if my skills will be in demand. I was able to secure employment agreements prior to even my university degree finishing and was offered $70,000 + 5% annual bonus + super (15% higher than other graduates), I am confident that I will be able to secure the job once I graduate.

Career action plan:

Short Term: Finish university degree by May 2024.

Medium Term: Secure Graduate job and move up the ladder as quickly to understand the depth of the industry. This will involve regular networking amongst other leaders in the industry as well continuously gaining further skills as I progress through my roles.

Long Term: Securing an upper-management role will involve showing exceptional results throughout my career which I plan to as thrive in project work that improves efficient lives and FinTech industry was born for this.

Property and Loans (Unit 5)My wife and I have been discussing about property investment during different stages of life and what we want especially when aligning with our values that we do not want a massive house but rather good and near our family (Blacktown Area) in the long-term so that we can spend time with them as well as giving our extra time back to the community.

We do have a family friend property solicitor that is very experience which we will hire along with pest inspector. This allows us to work with someone that we can trust.

Ownership structure will be joint tenancy between the two of us and we will not be able to access first-home grant as my wife had a property prior.

Student Life Stage (Current until June 2024

3978275208280Figure 6.1. Forecasted Fortnightly Budget during Graduate Life Stage

00Figure 6.1. Forecasted Fortnightly Budget during Graduate Life Stage

Currently we are not planning to save or invest in the property. However, there is already more than $100,000 saved for home deposit that can be used during Graduate life stage.

Student Life Stage (Current until June 2024

During Graduate Life Stage after my wife and I come back from our honeymoon, we have decided that we will now plan to increase our home deposit saving to $175,000 ($25,000 savings by myself by 31st Dec 2026 + $150,000 for her) for a 23-bedroom house of up to $680,000 in Penrith Area to continue our married life in and in which we would live for more than 10 years.

I used Westpac loan calculator to estimate the borrowing power between two of us at expected incomes and expenses inc $6,000 credit card. Our estimated borrowing power is $911,947 (Figure). Borrowing less than our capacity will allow us to pay off the mortgage quicker because we want to also spend our time travelling and helping others. This figure is very similar to a property agent that we have spoken with that allowed us to get a pre-approval which was just for us to get some insights of our current borrowing power.

-190377491404Figure 6.2. Westpac Home Loan borrowing power calculator

00Figure 6.2. Westpac Home Loan borrowing power calculator

Figure shows that even after all the expenses, I will be able to save over 30% of my net income (excluding super which is on top savings) for the home deposit. Over the 1.5 years, I will save over $25,000.

-218364226392

Couple with dependent children (July 2027 - June 2029)

Since savings will be more than 20% deposit, it will save us Lenders Mortgage Insurance charged by the bank. Expected repayment (P + I) at 6% will be $734 34251900Figure 6.3. Realestate estimated repayments.

00Figure 6.3. Realestate estimated repayments.

per week. 6% was taken assuming the current rate 353559434908900seen in Westpac website with stamp duty $25,690 (realestate, 2023 figure 6.3).

As I expect to have a graduate role by Jan 2025 with $70,000 + super, at this income I will be earning $2,128 net per fortnight + super which will be sufficient to cover 50% of the repayment while my wifes income is already at that level.

left4871Figure 6.4. Realestate potential first home

00Figure 6.4. Realestate potential first home

left1206500

351994743901Figure 6.5. Forecasted Fortnightly Budget during Couple with dependent children life stage

00Figure 6.5. Forecasted Fortnightly Budget during Couple with dependent children life stage

4358469562000

Figure 6.5 shows the forecasted weekly cash flow budget of combined income between my wife and myself and that even after all expenses, we can save $750 per week ($500 for investment and $250 for bigger financial slack for upcoming increase in future cost once we do have our first child and then 2nd child by 30th Dec 2029. We plan to negotiate our repayment to weekly as well as being able to pay up to 25% more than minimum required repayment. Both of this will allow to pay off the mortgage as soon as possible while decrease interest charged over the years.

-95534282651Figure 6.6. Realestate Potential Property

00Figure 6.6. Realestate Potential Property

Mid-Management role (July 2029 - June 2048)

left57817500By 31st Dec 2040, we expect to have saved more than $360,000 in principle from current home (figure 6.5) and savings kept aside for the future house that we expect to buy for up to $1.1 Million in Blacktown area with 3-4 bedrooms and backyard for the kids to play on. Our ideal land size will be 700sqm which at the current market price of Blacktown can be seen for around $850,000 (Figure 6.6). In saying that, we will be happy to purchase a smaller house if we aim to be within $1.1 million budget and home is close to our family and other religious activities.

Senior-Management (July 2048 June 2052)

By 31st Dec 2047, we expect to renovate few of the areas of the home that we agree needs upgrading. Which can be possible as by now I expect to be working in a senior-management role and so will my life. This upgrade might potentially be through savings or addition on the loan if the loan servicing is lower than 4% at the time. Our aim is to pay off the mortgage over the next 8 years.

left5810Figure 6.9. Weekly Income and Expense Forecast Senior Management

00Figure 6.9. Weekly Income and Expense Forecast Senior Management

left21506600

Couple with Adult Children (July 2052 June 2057)

By 31st Dec 2055, my wife and I will be around 57 58 years old and expect to pay off the mortgage since we have purchased the property smaller than what we could afford along with paying off mortgage faster than normal with additional contribution will allow us to be able to pay off the mortgage quicker and now we can focus working part-time only and spending extra time with family, travelling, and helping others through volunteering and donations. Figure shows the difference between loan paid as monthly repayments over the lifetime with no additional repayments verses our expected additional contributions of 25% more weekly. This strategy will allow us to save up $267,450 interest charged over the years.

Risk Management (Unit 7)Most of the risk management tools required in life are covered in unit 1 as these insurances are already by of my risk minimisation process. This includes Life Insurance, Health Insurance, Motor Insurance and Estate Planning.

Home and Content Insurance: This insurance will be taken out once we buy our first home as securing the property against unforeseen circumstances is important. This will be updated as the value of the property appreciates or depreciates.

Guardianship of Children: In the event of myself and my wife passing before our kids are under 18, we have already requested (and have consent) my wifes parents to be guardian and her younger brother as a back-up guardian in the even her parents pass away. This is because the values between us are aligned, and they also have the financial strength to be able to do support our children.

Health Insurance for Kids: This will be taken out as we have kids.

Health Insurance when getting older: Currently I have minimum hospital coverage (Medibank Bronze) with Top Extra, however, I plan to increase hospital coverage as we get older because of high possibilities of health issues that arise over time.

Taxation Planning (Unit 8)There are many different tax strategies that will used to maximise income return over different life stages. Tax agent will always be used to properly guide the true expenses claimed appropriately.

Salary sacrificing will be used where $7,000 or more are being added to super in addition to employers contributions which will allow capital to faster and compound to meet our expected $4mil retirement savings plan as well as decrease tax bill.

Dividend investment. 10% of all share investment will be added toward stable companies that provide regular dividends. This will allow the use of franking credit to decrease tax paid in income.

Charitable contributions. As I plan to give back to the community as much as possible and one of the ways is through donations to charity, this is a claimable deduction approved by ATO (ATO, 2023). This donation will sometimes be given to Red Cross Red Shield appeal, Cancer Council and other organisations that are working towards the betterment of community (my values and principles).

Education resource: Where appropriate, I will be claiming for courses and other materials used that are directly related to my work if my employer is not willing to pay for it (ATO, 2023).

The income splitting method will be used for the time while we are having kids and my wife starts her professional career again. This will allow better manage our income.

Interest offset account: This account will be used as a savings mechanism as well as reducing tax and interest paid towards the mortgage. This strategy has been used by my wife during her investment property.

Strategies mentions above (except income splitting) throughout all other life stages as the income grow, allowing us to maximise salary sacrificing to max capacity of $27,500 per annum.

Investment Strategy (Units 9 and 10)Several different strategies will be considered during different life stages which can be seen below.

Student Life Stage (Current until June 2024)

There are several irregular cash outflows during the current life stage which includes upcoming engagement, wedding, and honeymoon.

Currently I have saved for the engagement ring and proposal in BOQ High Interest Future Savers. Pending savings is outflow of getting married in Aug 2024 with $24,500 each (49,000 for both of us) budget for honeymoon and wedding. At the current income and savings of 26.5% for net income ($250 per week and excludes super) in my current BOQ high interest account of 5.45% (calculated and daily monthly), I will be able to save $12,304 (Annuity formula used). Remainder $12,196 from $24,500 will be given as a gift from my father.

Savings in high-interest account is currently the most appropriate approach for as the time horizon for this expenditure is less than 12 months. Fixed Interest Deposit currently in the market is providing 5.4% for 12 months locked in (Canstar, 2023) which is even lower than BOQs current savings account that also has no lock-in.

Superannuation will be kept at high-growth investment for the long-term strategy.

Graduate Life Stage (July 2025 - June 2027)

During this next life stage starting in Aug 2024, another irregular cash outflow will be for the home deposit of $25,000 savings by 31st December 2026. Currently Australia has one of the highest interest rates since 2008 (Trading Economics, 2023), over the next few years RBAs cash rate is expected to decline by mid-2025 (RBA, May 2023). If my current high-interest rate account drops from 5.45% to 3% with annuity payments of $700 per fortnight calculated and paid monthly, I will be able to save $39,952 by 31st Dec 2023.

Saving for home deposit in Term Deposits will be considered if this option in future is providing better returns. If this is the case, increments of $10,000 will be added to the term deposits for 1 year lock-in with last year being less than 1 year. Currently this option is paying less than BOQ 5.45% interest on up to $450,000 which is much higher than my deposit requirements and no monthly fees.

Just like current life stage, superannuation will be kept at high-growth investment for the long-term strategy.

Couple with dependent children (July 2027 - June 2029)

During this life stage when we have purchased our first home, investment strategy will include the following:

Increase minimum home repayment by 25% and pay weekly rather than monthly. Both will allow us to decrease interest paid over long term. Figure 9.1. And Figure 9.2. shows the comparison between minimum monthly principal and interest payment vs additional $187 per week will save more than $200,000 in interest and pay off the mortgage from 30 years to 18 years.

364909028254370036157572483617Figure 9.3. Westpac Offset account calculator.

00Figure 9.3. Westpac Offset account calculator.

Offset account that will further reduce the interest payable on the home loan. This is where we will deposit our financial slack as this will be a safe option and rather than 32250235424700018475735105100left15619Figure 9.1. Home loan with no extra payments

00Figure 9.1. Home loan with no extra payments

31790281811Figure 9.2. Home alone with $187 per week extra payment

00Figure 9.2. Home alone with $187 per week extra payment

earning savings account interest currently being 5.45% (highest in 15 years), this will save more than 6% interested payable on the savings amount. Figure 9.3 shows the potential savings further savings on the payable interest (Westpac calculator, 2023).

There will also be $390 per week as shown in the strategy, will be allocated towards shares and other high-risk and long-term horizon investments. Australia shares and ETF purchases will be made via Superhero account as this provides the cheapest share purchase cost of $5 per transaction plus gives 100 Qantas points every time. International shares and ETF will either be purchased from Superhero or CommSec.

In addition, out of $390 depending on upcoming startup companies raising for funds, some allocation will be made as angel investment via startup associations such as Sydney angels. At any given time, angel investment will not be allocated for more than 2% of the total portfolio. This will be mainly in FinTech startups locally and globally as this is my expertise and would like to be involved in this space.

This difference will allow risk to be transferred across multiple industries and profiles with startup potential to be more than 10x.

Mid-management role (July 2029 - June 2048)

Through investment options mentioned above by July 2040, expected offset savings is expected to be $100,000 and $100,000 in high-growth assets (excluding startup investments).

Over the years, I expect to have invested in more than 10 startups with an average $5,000 seed funding. More than 9/10 startup fails (Statista, 2022) so diversifying in different startup in local and global space will potentially allow better risk management.

Senior Management role (July 2048 June 2052)

During this life-stage our aim is to pay off the mortgage by 2057 so that we can decreasing working and work just enough to pay some of the expenses as biggest expense of mortgage will be finished. This will be done by being able to work as an executive in either a VC or FinTech firm with more than $300,000 per annum + super.

More than 75% of the high-growth investment will be directed towards safe blue-chip investments by 31st Dec 2057 that have strong dividend history which will allow us to spend more time with our kids.

If any of the startup investment has exponentially grown in valuation and allows investors an exit option via listing in stock exchange, I will decrease my stake potential just enough to pay off the mortgage and be financially free.

Couple with Adult Children (July 2052 June 2057)

By now, we expect our kids to have grown up and be able to financially look after themselves. If there are potential startups exist from my investment as my wife is risk averse when it comes to investing in startup companies, we plan to start Barista FIRE by 2052. This will involve working part-time either as a board member of multiple companies paying more than $100,000 for each of us or part-time consulting and paying off the mortgage quicker.

Financially independent couple (July 2057 onwards)

By this life stage, we aim to be financially independent with house paid along with superannuation balance of more than $1 million each and investment portfolio of over $1 million each. This will allow my wife and I to spend more time volunteering and contributing to the society more often. As we expect our kids to have been grown and have their own families, we aim to spend more time with our grandchildren as well.

We plan to have multiple sources of income that will contribute to annual $133,333 income will be the following:

-Super income from both accounts, growing perpetuity.

-Dividend income from both accounts as most of the investment had been directed towards blue chip companies.

In terms of drawing from the investment, we will now switch to conservative investments which includes blue-chip shares with strong dividend history such as big 4 banks, super balance to be decline overtime with regular payments.

Action Plan (Unit 10)Goals in order of action:

Save minimum $500 per pay in BOQ account until 31st Aug 2024 for wedding and honeymoon.

Secure a graduate role by Jan 2025 at either one of the big four banks or FinTech company like Stripe/Block earning over $70,000 per annum + Super.

Save minimum $650 per pay in BOQ account for home deposit until 31st Dec 2026.

Buy a 3-bedroom house in Penrith area for up to $680,000 by 31st Dec 2026.

Save minimum $20,000 in offset account by 31st Dec 2027.

Secure a Senior Manager Role at an Investment Firm or Big 4 bank by 31st Dec 2037 earning $200,000 + Super.

Donate a minimum of 2.5% of our net income towards charity or religious causes. This can also be put aside for the time being and must be fully donated with interest accrued.

Spend at least 1 weekend per month in religious volunteering with my wife and kids by 30th June 2040.

Buy a 3-bedroom house in the Blacktown Area for up to $1.1 Million by 30th Dec 2040.

Take at least one international trip per year during school holidays with a budget of $10,000 by 31st Dec 2045 onwards.

Work at executive position in either FinTech company or VC Firm by 2050 earning over $300,000 + Super.

Save over $300,000 in high growth investment and $200,000 in low growth by 30th Dec 2046.

Renovate the primary home to a 5 bed-room double storey house that will cost $200,000 by 30th Dec 2049.

Sit in a at least 2 company boards paying $100,000 each by 31st Dec 2052 and quit daily job so that it is a Coast FIRE

Contribute at least once a fortnight towards either helping in religious services or external community charity events by 30th June 2055

ave super balance of over $500,000 and High-growth Investments including Shares of over $1,000,000 by 31st Dec 2055

Pay off house mortgage by 31st Dec 2055

Visit at least 95 countries out of 195 countries in the world by 23rd Aug 2060

Compliant Statements of Advice (Unit 6)Few of the main differences between Statements of Advice and Financial Plan written are:

SOA requires a licensed financial advisor providing recommendations based on the clients situation while financial plan is a detailed version of how different life stage are taken into account in order to meet final goal financially free while not forgetting other important aspects of life such as values and attributes that drives a person on they want.

A financial plan created involves different risk management strategies such as life insurance and estate planning (wills), however advice does not contain insurance as since advisor need separate license for this.

Since Financial plan was created without a professional, SOA has self-managed super funds as recommendation with exact equities that should be bought in shares. While this allows the client to distribute the risk over different industries, it does not consider benefits of ETF that might be even cheaper for the client.

The financial plan also considers the career strategy that will be in place to fund the investment that client needs to make to meet retirement income. This allows you to research more in depth about the industry and what might be some skills that can potentially help you stand out. Financial plans will also take into consideration if this career is right for you when it comes to your values and what you want to achieve in life.

Creating financial plan allows the client to think more in depth about what they want to achieve during different phases of life, how much will be give back to the community, where would a person live and how can they afford paying for the property, in summary every aspect of life while SOA will focus more only on the investment side for best possible outcome to be financially free.

The structure of the SOA starts with an SOA letter from representative followed by the summary of advice, cost associated with it and risk associated with the advice while Financial Plan starts the content followed by current situation.

References235 bungarribee road, Blacktown, NSW 2148 - house for sale - realestate ... Available at: https://www.realestate.com.au/property-house-nsw-blacktown-142591524 (Accessed: 09 August 2023).

54 Illawong Avenue, Penrith, NSW 2750 - realestate.com.au, Realestate. Available at: https://www.realestate.com.au/property-house-nsw-penrith-142612996 (Accessed: 02 August 2023).

ANZ Group Holdings (ASX:ANZ) Dividend Yield, History and Growth, Simply Wall St. Available at: https://simplywall.st/stocks/au/banks/asx-anz/anz-group-holdings-shares/dividend (Accessed: 9 August 2023).

Australian fintech industry well-positioned for a challenging 2023, shows significant maturity in 2022, FinTech Australia. Available at: https://www.fintechaustralia.org.au/newsroom/https/wwwfintechaustraliaorgau/australian-fintech-industry-well-positioned-for-a-challenging-2023-shows-significant-maturity-in-2022 (Accessed: 4 August 2023).

BOQ, Savings and Term Deposits, www.boq.com.au. Available at: https://www.boq.com.au/personal/banking/savings-and-term-deposits/future-saver?cid=PAIDSEM%7cGOOGLE%7cFUTURE%7cBRAND%7cBAU%7cRSA&utm_medium=search&utm_source=google&utm_campaign=bau&utm_content=rsa&utm_term=savings&gad=1&gclid=CjwKCAjw8symBhAqEiwAaTA__L13bWV1dN77DwqHV6IrX51wGeoLBDGetsyu8dWSDecKoeJXZQSxbBoCyGsQAvD_BwE&gclsrc=aw.ds. (Accessed: 3 August 2023).

cycles, T. text provides general information S. assumes no liability for the information given being complete or correct D. to varying update and Text, S.C.D.M. up-to-Date D.T.R. in the (no date) Topic: Startups in Australia, Statista. Available at: https://www.statista.com/topics/4729/start-ups-in-australia/#topicOverview. (Accessed: 3 August 2023).

Daniel Teper, D.K. The pulse of fintech H123, KPMG. Available at: https://kpmg.com/au/en/home/insights/2023/08/pulse-of-fintech-h1-2023.html (Accessed: 5 August 2023).

Depreciation of work-related motor vehicles (no date) atotaxrates.info. Available at: https://atotaxrates.info/tax-deductions/work-related-car-expenses/depreciation-of-vehicles/#:~:text=Depreciation%20of%20most%20cars%20based,vehicle%20cost%20for%208%20years). (Accessed: 01 August 2023).

Explorer - Income Projection Calculator (no date) Aware Super. Available at: https://aware.com.au/content/ftc/member/forms-and-resources/calculators/super-projection/retirement-income-projection/ (Accessed: 9 August 2023).

Fintech | Global Australia (2023) Globalaustralia.gov.au. Available at: https://www.globalaustralia.gov.au/industries/digitech/fintech. (Accessed: 4 August 2023).

FinTech Market Size, Share, Growth Rate, Trends, Research Synopsis, Forecast Analysis Report [2023-2030], www.linkedin.com. Available at: https://www.linkedin.com/pulse/fintech-market-size-share-growth-rate-trends-research/ (Accessed: 9 August 2023).

Mortgage calculator, Westpac. Available at: https://www.westpac.com.au/personal-banking/home-loans/calculator/mortgage-calculator/maximum-borrowing-calculator (Accessed: 10 August 2023).

Office, A.T.O, Gifts and donations, www.ato.gov.au. Available at: https://www.ato.gov.au/Individuals/Income-deductions-offsets-and-records/Deductions-you-can-claim/Gifts-and-donations/. (Accessed: 7 August 2023).

Office, A.T.O, Self-education expenses, www.ato.gov.au. Available at: https://www.ato.gov.au/Individuals/Income-deductions-offsets-and-records/Deductions-you-can-claim/Education-training-and-seminars/Self-education-expenses/. (Accessed: 7 August 2023).

Pay calculator, pay calculator. Available at: https://paycalculator.com.au/ (Accessed: 10 August 2023).

Penrith property market, house prices, investment data &amp; suburb ... Available at: https://www.realestate.com.au/nsw/penrith-2750/ (Accessed: 02 August 2023).

Pulse of Fintech H123 Global analysis of fintech funding (2023). Available at: https://assets.kpmg.com/content/dam/kpmg/au/pdf/2023/the-pulse-of-fintech-h1-2023.pdf (Accessed: 9 August 2023).

R. (2015) Inflation calculator, Reserve Bank of Australia. Available at: https://www.rba.gov.au/calculator/annualDecimal.html (Accessed: 10 August 2023).

Repayments Calculator, www.commbank.com.au. Available at: https://www.commbank.com.au/digital/home-buying/calculator/home-loan-repayments#. (Accessed: 4 August 2023).

Seeto, T. (2021) Highest Term Deposit Rates: May 2021, Canstar. Available at: https://www.canstar.com.au/term-deposits/highest-term-deposit-rates/ (Accessed: 3 August 2023).

The elaboration likelihood model of persuasion - researchgate. Available at: https://www.researchgate.net/publication/270271600_The_Elaboration_Likelihood_Model_of_Persuasion (Accessed: 01 August 2023).

Trading Economics (2023) Australia Interest Rate, Tradingeconomics.com. TRADING ECONOMICS. Available at: https://tradingeconomics.com/australia/interest-rate. (Accessed: 7 August 2023).

Westpac Banking (ASX:WBC) Dividend Yield, History and Growth, Simply Wall St. Available at: https://simplywall.st/stocks/au/banks/asx-wbc/westpac-banking-shares/dividend (Accessed: 9 August 2023).

What is mindfulness? what are the benefits?: Act Mindfully (2019) Actmindfully. Available at: https://www.actmindfully.com.au/about-mindfulness/ (Accessed: 01 August 2023).

AppendicesAppendix 1.1 Life Insurance

Insurance Provider Aware Super

Account Number Not Provided for Privacy

Product Name Life Insurance

Insurance Cover $500,000

Annual Premium $140

Type of Payout Fixed or Aged Base Fixed

Telephone for making claims 1300 650 873

Website link https://memberonline.aware.com.au/

Appendix 1.2 Private Health Insurance

Insurance Provider Medibank

Product Name Bronze Assured Hospital Cover + Top Extra 75%

Account Number Not Provided for Privacy

Insurance Cover https://www.medibank.com.au/health-insurance/cover/bronze-plus-assured-top-extras/

Annual Premium $2,347.32

How to claim? Medibank App

Contact Number 1300 497 446

Government Subsidy 24.608% - Couple Earning under $186,000 threshold

Notes 2 Free Dental Annually, $250

Appendix 1.3 Motor Insurance

Insurance Provider NRMA

Account Number Not Provided for Privacy

Product Name Comprehensive Insurance

Insurance Cover My car, third partys vehicle and property

Annual Premium $1742.32

Excess $1,500

Expiry 5th April 2024

Website link https://www.insuranceonline.nrma.com.au/

Contact Number 1300 317 526

Notes Currently on 12.5% discount given as long-time customer

1.4. Honeymoon Options

University of New South Wales

FINS5510 Personal Financial Planning 24T2

Financial Plan Assignment

Student Details:

Student ID: Z5415207

Given name: Kushagra

Family name: Agrawal

Degree program: Master of Commerce (Extension)

Country: Australia

Word count: Student Declaration:

This assessment is my own work and has not been done in collaboration with anyone else.

Contents

TOC o "1-1" h z u 1.Current Situation (Unit 1) PAGEREF _Toc89941439 h 22.Life Planning (Unit 2) PAGEREF _Toc89941440 h 23.Financial Strategy (Unit 2) PAGEREF _Toc89941441 h 34.Financial Independence (Unit 3) PAGEREF _Toc89941442 h 35.Career Strategy (Unit 4) PAGEREF _Toc89941443 h 36.Property and Loans (Unit 5) PAGEREF _Toc89941444 h 37.Risk Management (Unit 7) PAGEREF _Toc89941445 h 38.Taxation Planning (Unit 8) PAGEREF _Toc89941446 h 39.Investment Strategy (Units 9 and 10) PAGEREF _Toc89941447 h 310.Action Plan (Unit 10) PAGEREF _Toc89941448 h 3References PAGEREF _Toc89941449 h 4Appendices PAGEREF _Toc89941450 h 5

To update page numbers in table of contents:

Click on Table of Contents then go to References then select Update Table under the Table of Contents group

Current Situation (Unit 1)Please refer to Financial Plan Assignment Instructions for what you should write in this section.

Basic Information

Age: 24

Gender: Male

Dependents: None

Country of Residence: India

Residential living circumstances: Renting at $680 per week, shared between my friend and I.

Current mode of Study: Full-time (International Student)

Employment Status: (Part-time)

Income Statement

As an international student, I need to track my income and expenses. Since arriving in Australia, I have been using the two most important apps to gauge my costs. Firstly, Money Manager and Expense help to categorize each expense into specific sub-accounts and what mode of transaction has been used to pay the expense. Secondly, to split my expenses with my flatmate, I use Tricount which splits day-to-day groceries, rent, utilities, and house supplies. At the end of every month, I accumulate all the transactions from these apps and my banking account in a spreadsheet for monitoring and estimation of future requirements to fund substantial expenses.

Figure (1.1) represents the personal income statement for June 2024 and for the year (June 2023-24), the figures have been rounded off to get clarity. The explanation of the categorization is as follows:

Family Aid To pay the fees of my master's education at UNSW, my family sends me funds every quarter which I have denominated in monthly payments.

Subscriptions- It includes various subscriptions such as Netflix, Amazon, and iCloud which are monthly expenses, whereas some are annually paid.

Depreciation- I purchased a laptop last year for $1350 and used the straight-line method to calculate depreciation expense, wherein I estimated that the usability of the laptop would be for the next three years and assumed 10% for the salvage value ($135). Therefore, my yearly depreciation would be $400. This formula gives me simplicity and predictability to plan out my expenses every year.

Utilities- It includes electricity, gas, and internet plans monthly.

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Fig 1.1

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5520662592070Fig 1.2

Fig 1.2

45869992607554Fig 1.3

Fig 1.3

Figure 1.2 depicts how I split the expenses with my flatmate with the groceries and other expenses on the app. Moreover, to describe succinctly, we leave a note on the description to elaborate on the categorizations. In Figure 1.3, the budget-tracking app shows the details of the transaction that occurred and what account it will be deducted from. For recurring expenses, I can switch to repeated transactions which will automatically deduct it from my income based on the frequency period of month or year.

Balance Sheet

115559360736600I have been preparing and tracking my balance sheet on an annual basis, specifically during the time to lodge my tax returns. The concise balance sheet includes various assets such as cryptocurrency, collectibles (Souvenir coins and exchange notes)

center3968893Fig 1.4

Fig 1.4

The balance sheet can be seen in Figure 1.4. Following are the amendments and differentiation explained between the two balance sheets:

Received gift cards from friends and family during special occasions. This has been increased by $50 in the current year.

The collectibles are my congregated mints and notes which have been valued and have increased in the current year. They have not been sold yet but are valued every year by specialists. mhones (2018)

The change in the laptop price can be seen as it decreases due to the depreciation in the past year.

Moreover, I invested in crypto assets a few years back, and the values have increased every year and are similar to the shares I have held in my investment account.

My family has given me additional support as a part of my long-term deposit. This will help me in future during the times of uncertainty.

42216096566900Insurance

Types of Insurances:

Death Cover Not Applicable

45358057747000Total & Permanent Disability (TPD) None

Income Protection None

right64663Fig 1.5

00Fig 1.5

Home Insurance Not Applicable

Motor Vehicle Insurance Not Applicable

Overseas Student Health Cover (OSHC) Yes (Medibank Essential OSHC), the details are provided in Appendix 1. The figure 1.5 states that the health coverage belongs to the selective visa I have and will expire until the period my studies are finished. My family paid the full cost upfront during my admission to the university, therefore it has not been added to the income statement.

Travel Insurance Yes (Westpac Credit Card Member Perks Free Travel Insurance)

Estate Planning

At the moment there is no designated will in place. However, I have decided to make my partner (future wife) 100% beneficiary under my life insurance policy. In the event of an accident, both my partner and I will have the power of attorney for financial and health decisions for the other person.

The will for my partner and me will be created once we are legally married with the help of a solicitor. The two wills will be created discretely from two different solicitors which avoids the impact of interference in decision-making. The clause in the wills will be restructured as we move forward and have kids in the future making them beneficiaries. Moreover, there will be a sub-backup clause as well in case of unforeseen circumstances all the family members in the previous plan have passed away, and the entire financial assets will be transferred to a societal foundation. My brother will be appointed executor and a law agency will be the backup executor in the case he refuses, or the family discrepancy worsens.

The following is the distribution I would like to include in my will:

Selection 1: 46% Wife, 27% 1st Child, 27% 2nd Child

Selection 2: If the Wife passes away: 50% to each child

Selection 3: If one of the children passes away: 50% wife, 50% the other child

Selection 4: If both children pass away: 100% to the Wife

Selection 5: If the wife and both children pass away: 100% to the chosen charity.

The amendments will be regularly updated within the gap of 10 years as life progresses and exponentially every 5 years after I turn 65 years old. The decisions are made in the fact that I would have my extended family in the future.

Anticipated Irregular Cash Outflows

In the future, there will be a few anticipated irregular cash outflows that are expected to arise within the next five years which include the following expenses in chronological order:1. Visa Expense- December 2024: After graduation, I have to file for a work visa which includes Visa Expenses ($4,765), Overseas Visitors Health Cover (OVHC) ($1,411.8), Medical Test ($ 200), and lawyer fees ($1,500) = $7,876.8

The above numbers for visa expense and insurance are based on the given facts and figures in real-time but the rest are just assumed. au (2024)

2. Motor Vehicle- May 2025: To cover my daily transportation cost in Sydney, I will buy a second-hand car which includes Car Expenses ($12000), stamp duty and Vehicle inspection ($650), and Registration and insurance ($2000) = ($14,650)3. Home Deposit- November 2028: From this year on my main objective is to get employed in a stable career and save money by decreasing the operating leverage for the irregular expenses mentioned above. Moreover, I will encourage and make a decisive goal every month to save money for a home deposit after June 2025 for 3 years. My objective as per the budget is to save $50,000 which can aid in making 20% of the home deposit.

Life Planning (Unit 2)Life Values and Principles

Value Principles

Gratitude (Harris, 2010) Each day, I will dedicate time to contemplate the positive elements of my life and convey my gratitude to those who enhance my well-being

Adventure (Harris, 2010) I will consistently pursue new experiences and challenges, welcoming uncertainty and change as valuable opportunities for personal development.

Contribution (Harris, 2010) I am committed to making a meaningful contribution to my community and the world by utilizing my skills and resources to assist others.

Purpose of Life: The purpose of my life is to leave a positive and lasting impact on the world, enhancing the quality of life for everyone I encounter. This mission fuels my curiosity to explore the globe, contribute to society, and set an inspiring example for future generations to emulate. Through my actions and endeavors, I aim to foster a sense of optimism and possibility, encouraging others to pursue their potential and make meaningful contributions to our shared world.

Value 1: GratitudeI chose gratitude as it plays a crucial role in sustaining a positive perspective on life and nurturing meaningful relationships. Engaging in daily gratitude practices enables me to improve my overall well-being and mental health. By expressing gratitude, I recognize the beneficial influence others have on my life, thereby fostering a sense of contentment and fulfillment.

Value 2: Adventure

I value adventure because it pushes me out of my comfort zone, leading to personal growth and resilience. Engaging in new experiences enables me to acquire knowledge, adapt to change, and broaden my viewpoints. To me, adventure signifies an ongoing journey of learning and the thrill of discovering the unfamiliar, which enhances my life and contributes to my growth as a person.

Value 3: Contribution

I chose contribution as a core value due to its ability to instill a sense of purpose and fulfillment in my life. Utilizing my skills to assist others not only enhances my feeling of belonging but also increases my satisfaction. By prioritizing contribution, I strive to make a significant impact on the lives of those in my community, thereby strengthening my conviction in the value of service and community engagement. This dedication resonates with my aspiration to leverage my abilities and resources to foster positive change and provide support to those who require assistance.

Life Stages

Life Path Age range

Student 22 24

Graduate 25 27

Associate role Mid Manager role 27 29

Couple with dependent Children 29 33

Senior Management role/ Executive 33 51

Couple with adult children 52 60

Financially Independent Couple 60 89

Life Path Student Life Stage (Currently until December 2024)

This is my present life stage where I am an international student studying full-time but working part-time to manage expenses. I live with my flatmate renting a unit but soon after I graduate, I will shift to a studio apartment.

Life Path Graduate (January 2025- December 2027)From here on, it is the anticipated stage of my life starting from the beginning of next year. Herein, I will already be graduated and start a graduate role within the first quarter. At this point, I foresee myself getting firsthand experience with work culture and buying a car to travel around. During this phase, I will also tighten up my cash outflow to save for the home deposit.

Life Path Associate Role Mid-managerial role (January 2027 December 2029)

At this stage of my life, I will be working in a managerial position in a consulting firm. Simultaneously, I would find the right one and get married as well. The wedding would take place in my home country where my family would bear the expenses.

Life Path Couple with dependent Children (Feb 2029 December 2033)

During this period, I and my wife will both work at a good level in their respective organizations whilst having two young kids. By this time, we would have moved to a new place.

Life Path Senior Management role/ Executive (Feb 2033 December 2051)

At this stage of my life, I expect to work in a sophisticated position within the organization or hold an executive position in one of the Private equity firms. This will coincide with my wife as well within a similar field and position. I am also keen to invest in the global startup space and find any novel idea that helps the world. Moreover, the kids would be teenagers by this age to a certain degree and would be financially independent. Together we go on trips to overseas and local places to explore.

Life Path Couple with adult children (January 2052 December 2060)

During this stage, I will ease out from work or semi-retire and spend time with our kids as they will get married. I will also pay off my mortgage by this age and push to give time and do community service.

Life Path Financial Independent Adults (January 2061- Until the Life Goes)

Coming of this age I would have accumulated various streams of income and cash inflows which will ease my life to be fully retired, therefore, spending time with my grandchildren and traveling around the globe.

Life Goals

Life Path Life Goal Career Goal Financial Goal Dwelling Goal

Student Get graduated by 1st week of December Had already done an internship during the summer break of 2023 Save at least $220 per month (30% of the net income) till the time I graduate to pay off the Visa Expense Live with my flatmate in a rented apartment.

Graduate Got the work Visa done before I started working

Spent on buying a car for daily travel to the workplace Got into a consulting firm for a graduate role which will help me earn over $75,000 + Super Save $50,000 by the end of the year for a home deposit Looking forward to buying my first property of a 2-bedroom apartment at Telopea for $550,000 by the end of 2027

Associate role Mid Manager role Get married by January 2027

Get a promotion in the job I have been promoted to a mid-managerial role in the Big 4 consulting firm by 31st January 2028 earning $100,000+super. Contribute together for the home deposit by 31st Dec 2027 Buy a second apartment of 2 bedrooms in Castle Hill for $725,000 by December 2028

Couple with dependent Children Have 2 Children by December 31st, 2029. Get a pay rise at the workplace and increment to $ 150,000+ Super. Accumulate income through long-term investing in moderate and risky assets worth around $100,000 by 31st December 2029 Buy a 3BHK in Glebe area CBD for 1.25 Million by 30th December 2033

Senior Management role/ Executive A trip with the family to a foreign destination Be in an executive position in a private equity firm and earning over $300,000 + Super Have a super balance of over $450,000 and High-growth Investments including Shares of over $800,000 by 31st Dec 2050 Renovate the primary home into a five-bedroom, double-story house with a budget of $200,000 by December 30, 2053.

Couple with adult children Contributing towards societal welfare and providing amenities to the unprivileged once. By 31st December 2055 be a part of two of the companys board and get paid $150,000 each. Hence quit a full-time job for Coast FIRE. By December 31, 2059, aim to have a superannuation balance exceeding $500,000 and high-growth investments, including shares, totaling over $1,000,000. Pay off house mortgage by 31st Dec 2059

Financially Independent Couple Visit at least 90 out of the 195 countries in the world by August 23, 2065. Financial Strategy (Unit 2)To attain retirement by 2052 at the age of 55 while embracing the Coast FIRE lifestyle, a comprehensive financial strategy will be developed, taking into account various objectives throughout different phases of life. During the initial stages of life, a projected weekly income statement will be prepared, detailing all transactions, including allocations for savings and investment. All dividend-generating stock investments will be reinvested to accelerate the growth of the portfolio.

Student Life Stage (Current until December 2024)

435927571893Figure 3.1. Annuity Formula

Figure 3.1. Annuity Formula

Financial goals during the current life stage involve mainly saving for the Visa expense which will be an irregular cash outflow and managing the health expenses for it by December 2024 for $7876.8. At the current income and savings of 30% for net income ($220 per month which excludes the super) in my current Westpac A/c high-interest account of 5.45% (calculated daily monthly), I will be able to save $5,565.18 (Annuity formula used. Figure 3.1). The remaining $2316.2 will be given by the family as financial aid.

Graduate Life Stage (January 2025- December 2027)

At this phase of my life, commencing in January 2025, I will be reducing my operating leverage to accumulate $50,000 for a home deposit by December 31, 2027. This amount will contribute to the total home deposit of $55,000 and anything above that will be taken as loan from the bank.

At present, Australia is experiencing one of the highest interest rates (Taylor 2024 ). It is anticipated that the cash rate set by the Reserve Bank of Australia (RBA) will decrease by mid-2026(Reserve Bank of Australia 2024). Therefore, my current high-interest rate account reduced from 5.45% to 3%, with annuity payments of $500 every fortnight calculated and disbursed monthly, I project that I will accumulate $15,000 in 13.6 months by December 31, 2024. Hence, this will help me to fund my new car and the expenses around it which is $14,650. A superannuation rate increase by 0.5% over the next 2 years will allow the superannuation balance to increase higher than before along with a new graduate role with $75,000 + super.

Associate role Mid Manager role (January 2027 December 2029)

At this stage after getting married, there will be two streams of income in the house which will support getting a new house for expanding the financial assets. Therefore, we will buy a residential building and put the 10% ($72,500) deposit which is split between the two by December 2028. Moreover, this would help us to cover our operating leverage which is the future expense after having a child, and avoid financial risk.

Couple with dependent children (Feb 2029 December 2033)

As I am set to complete my graduate role and transition into the position of Senior Analyst, with a compensation of $100,000 plus superannuation, I anticipate being able to save approximately $390 every fortnight over one year.

I have already transitioned into a position of managerial role in the past years year for $100,000 and ascertaining an increase to $150,000. Hence, I anticipate saving $500 every fortnight over one year for which I plan to allocate $325 per fortnight towards investment in high-growth assets This strategy is further supported by our commitment to repaying our home loan at a rate of 25% faster than the minimum required payment, as detailed in the property section. The financial surplus will be deposited into a property offset account to minimize the interest incurred on the mortgage, and these funds will only be accessed when necessary. My high-growth investment strategy will focus on increasing allocations in international ETFs and Australian blue-chip companies known for their substantial dividend payouts, thereby enabling effective risk management. Any bonus paid will be kept separate during the short term as they will be allocated toward an accumulation target of $100,000 by December 2029.

Senior Management role/ Executive (Feb 2033 December 2051)

During this life stage, we aim to pay off the mortgage by 2059 so that we can decrease working and work just enough to pay some of the expenses as the biggest expense of the mortgage will be finished. This will be done by being able to work as an executive in either a private equity firm for more than $300,000 per annum + super. More than 80% of the high-growth investment will be directed towards safe blue-chip investments by 31st Dec 2057 that have a strong dividend history which will allow us to spend more time with our kids.

Couple with adult children (January 2052 December 2060)

At this stage, we anticipate that our children will have matured and be capable of managing their own finances. Given that my wife is cautious about investing in startup ventures, we are considering potential startups that may arise from my investments. Our objective is to initiate Barista FIRE by the year 2055. This plan entails engaging in part-time work, either as board members for several companies that compensate us over $150,000 each or through part-time consulting, which will also facilitate a quicker repayment of our mortgage.

Financial Independent Adults (January 2061- Until the Life Goes)At this stage of our lives, our objective is to achieve financial independence, having fully paid off our home, alongside each of us possessing a superannuation balance exceeding $1 million and an investment portfolio also surpassing $1 million. This financial stability will enable my wife and me to dedicate more time to volunteering and making meaningful contributions to society. As we anticipate that our children will have matured and established their own families, we also look forward to spending increased time with our grandchildren.

- Income from both superannuation accounts, which will continue to grow indefinitely.

- Dividend income from both accounts, as a significant portion of our investments has been allocated to blue-chip companies.

Regarding our investment strategy, we will transition to more conservative investments, focusing on blue-chip shares with a robust history of dividend payments, such as the major four banks, while our superannuation balance will gradually decrease due to regular withdrawals.

Financial Independence (Unit 3)Career Strategy (Unit 4)Property and Loans (Unit 5)Risk Management (Unit 7)Taxation Planning (Unit 8)Investment Strategy (Units 9 and 10)Action Plan (Unit 10)Compliant Statements of Advice (Unit 6)

ReferencesPlease refer to Financial Plan Assignment Instructions for what you should write in this section.

AppendicesAppendix 1 Overseas Student Health Cover (OSHC)

Health Cover Provider Medibank

Account Number Not Provided for Privacy

Product Name Essential OSHC

Insurance Cover Medical and Hospital cost

Annual Premium $651.00/ Year

Telephone for making claims 134 148

Website link https://www.medibank.com.au/overseas-health-insurance/oshc/essentials-oshc/