Instructor: Chuck Grace
November 29, 2012
This personalized investment plan provides an outline of my investment goals and objectives, including the strategies I will employ to meet my financial needs for retirement .
Short Term Goals (22-30 Years of Age)
* Lease a vehicle
* Rent an apartment in Cambridge, Ontario, Canada
* Work at Guillevin International as a Management Trainee * Maximize contributions to RRSP and TFSA
Medium Term Goals (30-65 Years of Age)
* Lease Vehicles
* Get married
* Buy a home
* Maximize contributions to RRSP and TFSA
* Furnish my home
* Have 1 Child
* Pay For Child’s Education
Long Term Goals (65-95 Years of Age)
* Lease a Luxury Vehicle
* Move to Florida and buy a place for the remainder of retirement * Leave a legacy
My Retirement Plan Need
* When I retire I would like to have an annual income of $115000 /year before taxes for my 30 year retirement period . I would also like to leave a legacy in the amount of $1.3 Million. (Exhibit #1) * I expect to live until I am 95 years old
* I will need to be very disciplined in my retirement plan to meet the goals I have set out and constant reevaluations of this plan will be needed * I will need to have approximately $2.5 Million in my investment accounts when I retire at the age of 65. (Exhibit #1)
In April 2013, I will graduate with my HBA from the Richard Ivey School of Business. I will begin working at Guillevin International as a Management Trainee starting in May 2013 with a starting salary of $60,000. I will be living without dependents until I expect to be married and have children at the age of 30.
Current Health and Life Expectancy
I consider myself to be above average in health. My diet is extremely clean and I work out 4-5 times per week. I expect this continue as long as I live. I do not smoke or drink excessively, which also contribute to my above average health. I expect to live to an age of 95 and have shaped my personal financial plan to fit this parameter.
Current Net Worth
I am currently debt free and expect to remain debt free throughout my entire life with the exception of a mortgage. I have $15000 invested in a TFSA, which I invested in through opening an account with TD Canada Trust. Therefore I expect to graduate with a net worth of $15000.
Tidal Forces Of Environment
In recent times, the economy has been very unstable and high returns that were obtainable in the past may not be available in the future. This is extremely important in selecting my expected rates of return above inflation in the future as currently I may be overestimating my expected returns. Due to the compounding effect, a mistake in my expected returns could drastically affect the amount of money I will be left with when I retire at the age of 65. This requires constant reevaluation of my overall retirement plan to meet the retirement goals I have set out.
Investment Knowledge and Sophistication
I consider myself an average investor at this point in my life. I regularly keep up with the markets throughout the week and constantly discuss the markets with peers in the HBA program. I have already taken the Canadian Securities Course and passed. I plan to construct a passive portfolio by investing in equities and bonds with the help of a financial advisor.
I have already opened a chequing and savings account with TD Canada Trust. I have opened a TFSA as explained before and an RRSP through TD Canada Trust as well. I plan to maximize contributions to my TFSA first, then to my RRSP and the remainder of my investment capital available will go into an investment account. I have chosen not to invest in an RESP, but pay for my child’s education in the amount of $80,000 from my TFSA.