Background

You are a financial planner and are approached by a client, Serena Hollingsworth. You are to present her with a Statement of Advice (as indicated in Section G).

Serena is 23 years old. She is single and is seeing a young man, Ramesh Jain who is 26 years old. They are planning to get married in Melbourne after the pandemic has passed and are looking towards the year 2022. They have begun planning their financial future together.

Ramesh works as an accountant earning $ 90,000 per year before tax and Serena is currently completing her final year of studies in the Bachelor of Accounting program at Holmesglen. She currently works part-time as a book-keeper, earning $ 20,000 per year before tax. She will move to a full-time position within her current firm next July and will be earning $65,000 per year before tax. Both Serena and Ramesh are only expected to get inflation-linked increases in their salaries throughout their working lives.

They are both planning on purchasing a home in Melbourne in 2025 and want to save up a sizeable deposit for it. They have also advised that they would like to build up their wealth outside superannuation so that they can have access to it throughout their lives.

Both Ramesh and Serena have clarified that, after hearing the Storm Financial story, they want to limit their investments to online savings accounts and managed funds.

Their personal balance sheet as at 30 June 2020 is as follows:

ASSETS
Home (Primary Residence)	NIL
Contents (Combined)	20,000
Cash - Online Savings Account (Combined)	20,000
Motor Vehicles (2)	15,000
Superannuation - Ramesh	10,000
Superannuation - Serena	3,000
TOTAL ASSETS:	68,000
LIABILITIES
Credit Cards (19% nominal)	10,000
Car Loan	4,000
TOTAL LIABILITIES:	14,000
NET WORTH:	54,000

Further information:

Serena and Ramesh currently have expenses of $3,500 per month.

Their expenses are expected to stay at their current level for the next 2 years after which it

will rise with inflation.

Ramesh estimates that they will need $ 50,000 as a deposit on a house.

They plan to live in Rameshs rental unit until they buy their own home. The rental is currently

$250 per week.

All figures are stated at todays values.

Their current investment strategy involves the purchase of a residential owner occupied

property on which they will be repaying principal and interest. They do not wish to invest in any other property.

They want to ensure that their wishes are carried out when they pass away.

Required to project Ramesh and Serenas Cash Flows from 1 July 2020 to 30 June 2030.

Projections should include, but is not limited to, the following:

Salaries.

Expenses.

Mortgage reayments.

Investment Income outside of the Superannuation Funds

Proceeds from sale, if any, of Non-Superannuation Assets.

Any lump sum payment from Superannuation following a condition of release.