Part
1: Financial Goal
Choose a financial goal that you would like to achieve
in the next 2 to 10 years. Some common examples include: saving for a vehicle,
taking a trip or vacation, financing your post-secondary education, saving up
rent for your first apartment, a down payment for your first house…
1. What are you saving for?
Please be detailed in your response. For example, if you want to buy a vehicle, state the year/make/model of your first reasonable choice, as well as whether you would buy new or used and why. If you choose a vacation, state where you want to go, how long, what type of accommodations, etc.
2. What is the total cost (in TVM Solver, the “FV”) of your goal?
You must show evidence to support your answer: links to websites detailing your university tuition, a Craigslist listing for the truck you want, etc.
3. How long do you have before the money is needed?
(e.g. if you’re saving for post-secondary education, your reasonable goal is to have saved by the end of your fourth year of undergrad, so that you can start paying off your student loans.)
Part
2: Assets
Before you can figure out whether or not your
investment goals are reasonable, you need to know how much money you have
available to put towards it. This may necessitate an awkward conversation with your
parents or guardians.
1. Right now, do you have a source of income (i.e. a summer job?) how much money could you reasonably invest each month?
2. How much money do you currently have saved up?
3. How much money do you expect to get from sources other than your primary source of income? (e.g. birthday gift, allowance, scholarships…)
Part 3: Investment
Research and choose two distinct investments (bank accounts, high-interest savings accounts, mutual funds, GICs, etc.) that you will use to reach your goal.
Most banks hide relevant details in the fine print. Get used to scrolling to the bottom of the page and reading the fine print; you run the risk of getting screwed over if you don’t.
Include the following details for each account type, on the next page:
| Investment #1 1. Type of
investment (and link to the website you found it at): 2. Interest rate (as of January 2020): 3. The compounding period (C/Y): 4. Financial institution offering the account (e.g. name of the bank? Somewhere else?): 5. Principal you will invest (PV) and/or… 6. …Regular payments you will make (PMT) and frequency (P/Y): | Investment #2 1. Type of
investment (and link to the website you found it at): 2. Interest rate (as of January 2020): 3. The compounding period (C/Y): 4. Financial institution offering the account (e.g. name of the bank? Somewhere else?): 5. Principal you will invest (PV) and/or… 6. …Regular payments you will make (PMT) and frequency (P/Y): |
Part 4: Analysis
Calculate the future value (FV) of each investment you chose in Part C.
Will you have enough money saved by the time you need it?
If you did not reach your goal, make a suggestion for a solution. (e.g. higher monthly payments? Borrowing money from parents/your banks? A less expensive goal?)
| Investment 1 N I% PV PMT FV P/Y C/Y | Investment 2 N I% PV PMT FV P/Y C/Y |
