Personal Financial Planning

Personal Financial Planning Portfolio Instructions
Please submit the hard copies of your individual assignment to your tutor in the last
tutorial (June 1, 2017). Alternatively, you can submit it to your tutor on June 2, 2017,
at 4 PM.
This financial planning portfolio should be constructed based on your projected
personal situation (family, occupation, health, etc.) in next ten years. Before attempting
the following topics, first, make assumptions about yourself for the next ten years. The
assumptions should hold valid throughout the whole portfolio. The following example
is for demonstration purpose only. You should make your own assumptions based
on your projected personal situation.
You are a female New Zealander. In 10 years, you are 30 years old. You have graduated
from the University and are working for few years as a marketing manager in a company
(e.g. Air NZ) with an annual gross salary $150,000. You are married with two kids
(three years and one year); your husband is a stay-at-home father taking care of the
family. You have purchased a home (valued at $800,000) on mortgage (home loan
$640,000) and are thinking to buy an investment property soon. You have a 7-seater
family car. You currently have home insurance and car insurance. Both your husband
and yourself are healthy at this stage, but you are thinking of taking out life insurance
and private health insurance. You are a Kiwi-Saver member. You need to save for your
kids’ education and your own retirement. In your bank account, you have $X savings;
you are investing in the NZ stock market with an initial investment of $Y……
Step 1:
1. Write down your short-term and long-term goals (dot-points)
2. Photocopy and fill out the Client Questionnaire on page 658 of the textbook based
on your personal situation in 10 years.
3. Fill out a risk-profiling questionnaire and print out the results, e.g.–> you need to first register using
your university email.
4. If you cannot access the above risk profiling questionnaire, go to Google and search
‘risk profiling questionnaire’ and you will find some online.
Step 2:
1. Create a balance sheet for yourself. We want you to think about what different items
may go into each asset and liability category.
2. Similarly, create an income statement for yourself.
Step 3:
1. What type of financial product appeals to you the most and why?
2. Carry out asset allocation as per your own risk profile. Give an example of ONE
real-life product you would purchase in each asset class and give reasons why.
(A sample asset allocation can be found in page 161 of the textbook. They can also be
found online if you search through Google!)
Step 4:
1. Compare two credit cards which are available in the New Zealand market. Which
one would you choose and why?
2. You can use the banks’ websites to research directly, or use comparison websites
such as
Step 5:
Choose 2 managed funds that you would invest in and give reasons why.
You should consider your goals, financial and non-financial situation, risk profile, and
other matters such as fees and returns of the fund.
A good place to start researching is
Step 6:
When you purchase your first house (for your own use):
– What are the issues you need to consider (eg. Price, locations, costs etc)?
– Weigh up the benefits and the downsides of purchasing a house VS renting.
After purchasing your own house, you are now considering the purchase of an
investment property.
– What are the issues you need to consider?
– Decide whether you would purchase the investment property and give reasons why.
Step 7:
Look at your current yearly income. Work out your tax payable. Then, write down ways
in which you can minimise this (eg. Donations, home office expenses etc).
Step 8:
You are considering taking out private health insurance and life insurance.
• What are the issues you need to consider? (ie. Your current situation etc)
• What policies would you take out? (ie. Hosptial cover, extra TPD cover)
• In real life, choose one private health insurance policy and one life insurance
policy you would take out.
• is a good place to start!
Step 9:
1. Discuss the NZ superannuation scheme KiwiSaver;
2. Compare KiwiSaver with Australia’s MySuper.
Step 10:
Are you eligible for any social security benefits? Check out:
– If so, what are they and why do you/would you receive them?
– If not, think about circumstances which may arise in the future which will result in
you receiving these benefits?
Step 11:
1. Create a will for yourself right now (i.e. based on your situation in 10 years).
2. Make a will for yourself in 30 years’ time when you are, say, 60 years old.
3. Compare the two wills and think about when it may be the most appropriate time to
prepare a will for yourself.