Help with my finance homework

Personal Finance

You will continue your financial plan based on the following prompts:

Retirement Planning:

1. How much savings do you need to support yourself during retirement?
2. How much will you contribute to your retirement? Into what type of plan(s) will you contribute?
3. What are the present-day tax savings from your retirement planning?

Estate Planning:

1. Will you create a will on your own or with an attorney’s assistance? What special stipulations (for
an heir, executor, or donations to charity) will you include?
2. Do you need to establish trusts or gifts to reduce your estate’s tax liability?
3. Will you assign power of attorney and/or durable power of attorney?

I have attached my financial plan that I add to every week please use it.

1. Describe the actions you will take to increase your net cash flows in the near future.

The first step is to reduce living expenditures. It is critical to lessen the amount spent on living expenses and other variables and save for future use. I will have to prevent luxuries such as vacation costs or keep them in check to avoid spending a hefty amount on them. I should check the option to cook for myself and avoid buying food. Also, I will choose a destination I can drive myself to save on rental car expenditures and airfare. I will have a detailed budget indicating the amount required for savings, debt repayment, and investment that will assist only to spend the money on essential expenditures. Further, the savings can help to start a business and become self-employed in the distant future.

I would have to look for a job that pays well or engage in a robust salary negotiation. The right time to negotiate for salary is during a performance review, compensation meeting, or job promotion (Bellon, Cookson, Gilje, & Heimer, 2020). I will ensure that I expand my education and technical skills to attract fair pay in the job market. Also, salary negotiation can result from an increase in experience and enhancement in skills after performing the job for a long time.

It is essential to understand debts and formulate a plan to finance the expenditures. I will check on the debts with the highest interest and start reducing them. The act of debt reduction will help increase net cash flow to be successful in my future goals. Also, I will reduce the amount of debt that I give to family and friends that ends up as bad debts.

2. Detail your plans to increase your net cash flows in the distant future.

In the distance future, I will start a side hustle or engage in business and leave employment. I have a passion for programming and website, development and it is an area I want to venture into the future. I can start an Amazon Affiliate website or a dropshipping company while still on my job and resign when it stabilizes. Investment in business can have handsome returns and help to attain successful life in the future.

It is essential to build rental income. The future ambition of increasing the net cash flow is to have a unit to rent to other people and get money monthly. Also, I will pursue different ways of generating cash through renting houses such as Airbnb and hiring fully furnished apartments to visitors. Further, I will work towards homeownership to avoid spending most of my disposable income on paying rent.

I will invest in financial assets such as mutual funds, bonds, ETF’s, certificates of deposits, and stocks that can contribute inflows by paying the holders of the financial assets interest and dividends. Additionally, I will have a combination of assets for additional income to support my future lifestyle. The advantage of this technique includes receiving a passive income even at old age or after retirement.

3. Report on how much you must save per year and the return you must earn to meet your goals.

Desired Investment Value in 10 Years

Cost per year

Years

$500,000

Personal Expenses (Annually)

10,000

10

100,000

Student Loan

75,000

10

750,000

Vacation

20,000

5

100,000

Desired investment + Other Expenses

1,450,000

Additional savings needed over the next ten years*

50,000

10

500,000

Earnings

145,000

10

1,450,000

References

Bellon, A., Cookson, J. A., Gilje, E. P., & Heimer, R. Z. (2020). Personal wealth and self-employment (No. w27452). National Bureau of Economic Research.