You have gotten to a point in your life where you have a budget and it works,
Question:
You have gotten to a point in your life where you have a budget and it works, your cash inflows and outflows are matched to the point where your bills are getting paid; you have an emergency fund to cover contingencies; and your overall needs of your family are being met. Over the years, you have accumulated $100,000 that is currently sitting in a savings account earning very little interest. You have determined it is time to begin a structured approach to investing and need to allocate this $100,000 lump sum. You have also determined you may have $1,000 a month additional to invest. In order to establish how you will invest the $100,000, and in what terms, you must address the following:
Upon determining your answers to the above questions, determine the make-up of your investment portfolio. How would you determine what types of investments are appropriate? What specific investments would you put in your portfolio? Why? If you can average 8% annual rate of return on the $100,000, how much would you have when you turn age sixty-five?
Following the 5-step critical thinking problem solving process, determine what you would do in the situations outlined above.
