Planning for Long Term Wealth Creation

Planning for Long Term Wealth Creation Essay example
Finance & Accounting
Pages 4 (1004 words)
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S2/2011 BEO3347 Planning for Long Term Wealth Creation ASSIGNMENT Name: ID Number: Email Address: Telephone Number: Question 1: Albert earns $60,000 per annum and Nancy earns $42,000 per annum. Albert and Nancy (both 45 and do not intend to retire for at least 10 years) believe they should use the equity in their home to invest.


Before borrowing to invest in the stock market, Albert and Nancy should first build an investment plan that clearly documents their retirement goals of savings and income. After identifying the level of income and savings that they require for their retirement goals, the couple can then develop several investment strategies that are potentially adequate in achieving these goals over time, using the principles of risk management to differentiate the advantages and disadvantages of each strategy. In summary, the couple should schedule meetings with a number of financial professionals and discuss the investment options available for achieving their retirement goals to compare advice and strategies in different stocks, bonds, and commodity investments. Once this information has been gathered, they should study each recommendation given by the financial advisors and make a final decision on an investment plan they are comfortable with dedicating their income to over the next 20 years. One serious concern that the couple must consider when contemplating taking a home equity loan for investment in a retirement fund is the rate of interest that they will pay on the initial sum and how that rate compares to expected stock market returns. For example, HSBC and UBank are both offering home equity loans at a 6.79% interest rate in Australia currently. ...
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