Risks & Concerns Your prior sections are likely to be based off your “expectations” and best guess at what the near future may look like for you. I want you to list and describe the realistic things that could disrupt your plans, and additionally, how you are going to plan to mitigate the impact of these things in your budgeting & planning.
Deliverable: Thinking about your immediate future, compile a comprehensive and detailed (written and calculated) 5-year financial plan. Your submission will include a 5 year forecast of your expected cash flows, with detailed sections on various aspects of income, savings, spending, and financial goals. You will make assumptions about where you are going to live, the lifestyle you plan to lead, and major decisions you expect to make during this time, as well as plans you may be making for the future (including financial implications). Completed submission will have: Appendix for key assumptions/metrics, financial schedules, cash flow forecast, quotes, etc
Section I – Summary Basic outline of what you think your life is going to look like over the next 5 years (5 years post-graduation). This will include where you’re going to live, what job(s) you’ll have, your income (all sources), the lifestyle you plan to lead (and the expenses that go with it). This should also include a brief discussion of both short-term and long-term goals, including personal and financial.
Section II – Goals List and describe in detail your top 5 “financial” goals, and detail how you will plan to accomplish them. You should incorporate your thoughts on interest rates, expected investment returns, your threshold for risk, and other variables that will influence the decisions you’ll make and the results you expect to get.
Section III – Budget & Forecasting Outline in detail your annually for the following 4 years (5.5 years total). Start with gross income and all revenue sources, and account for all deductions including the various taxes, deductions (healthcare, insurance, etc), and payroll related expenses. You will also include your living expenses such as housing, food, entertainment, savings, etc (FYI: Net Income = Expenses + Savings). For anything that you may finance/borrow (house, car, vacation, etc), you must include an outline of the financing arrangement, inclusive of interest rates and terms. You will need to reference outside sources for much of this, including calling realtors, banks, researching classified ads, etc. This is a written section outlining key assumptions and metrics, as well as economic/investment assumptions that will impact your forecast.
Section IV – Risks & Concerns Your prior sections are likely to be based off your “expectations” and best guess at what the near future may look like for you. I want you to list and describe the realistic things that could disrupt your plans, and additionally, how you are going to plan to mitigate the impact of these things in your budgeting & planning. Appendix Spreadsheet print out of your cash flow forecast; key screenshots / tables / charts of quotes, (planned) financial transactions (i.e. car/home purchase), savings/investment growth expectations, etc. Some in-class/homework assignments may/can feed into this. use information from the files I have provided. Feel free to cite additional information from the internet but do cite it. Follow the example I have provided.
