GSP110 An Introduction to Financial Planning TMA01 July 2024 Presentation

Tutor-Marked Assignment 01 (TMA01) 

 This assignment is worth 30% of the final mark for GSP110 An Introduction to Financial Planning.  The cut-off date and time for this assignment is 8 September 2024, 2355hours. Submit your solution document in the form of a single MS Word file on or before the cut-off date shown above.

Question 1  

(a) The Cash Flow Statement shows us how our income and expenses are apportioned. With your data, employ the correct tools to develop your own Cash Flow Statement for the period 1 Jan 2023 to 31 Dec 2023. 

(b) The Personal Net Worth Statement, also referred to as the Personal Balance Sheet, tells us the state of our financial health at a certain point in time. Employ the Net Worth Statement to work out your net worth. 

(c) Apply and explain the following ratios as they apply to your finances: 

• Basic Liquidity Ratio
• Debt-to-Asset Ratio  

Question 2  

Gina lives alone in a HDB 4-room apartment which she recently purchased for $450,000. For this purchase, she took a $360,000 loan payable over 25 years. Her monthly instalment is $1,584 over a period of 25 years at 2.6% per annum.

On top of this, Gina has almost maxed out her two credit cards, owing the banks a total of $13,000. The credit cards attract an interest rate of 24% per year, or 2% per month.  

Gina has a small investment of $8,000 in bonds with an expected annual yield of 4.5% per annum, and this has been growing consistently. She also has a savings account balance of $6,700.  

Gina works as a secretary in a law firm and draws an annual income of $45,500 (including 13-month pay). Her monthly expenses, including debt repayment, is about $4,000 a month, which is probably why she has raked up the sizeable amount of debt. This is despite any financial “allowance” she gets from her parents.

• Discuss the various common myths concerning the cash/debt management Gina is operating under.  
• Identify which of Gina’s debts can be reduced and develop a plan suggesting how this can be done.   

Question 3  

When setting goals for your financial plans, present and explain the decisions you would make to prioritise your goals.   

 Question 4

 In the Sunday Times article entitled “She keeps her investing style simple to allow for family time” (article attached), Ms So Sin Ting shares her financial tips with the readers.

• Discuss the three top investing tips shared by Ms So and explain how they help her maintain a balance between her investment activities and her family.   
• Identify which aspect of planning is extremely important to Ms So, and explain why this is important.

Learning Outcomes 

• Identify the issues that impact an individual’s financial planning decisions
• Employ the necessary tools that are needed to address the contemporary challenges facing modern financial planning decision-making. 
• Discuss various financial planning issues and how to address them
• Develop a personal risk management plan and recommend solutions to achieve the said plan 
• Outline an investment plan to cater to various needs
• Present and execute a personal retirement plan
• Apply quantitative methods to develop solutions for various financial planning problems.