Lane Case 1

Lane Case Study

Goals

The Lanes mentioned in the their first meeting their financial goals and what they wanted to focus on at this time.

1. Financial Security

2. Home Purchase

3. Retirement Savings

4. Estate Planning

5. Saving for Higher Education

I presented a SWOT analysis so they could be aware of their financial strengths and weaknesses so they could understand the recommendations that would be propsed to them.

Strengths

* Trust established for children if something were to happen to Mark

* Mark has disability Insurance

* Auto Insurance on primary vehicles

* Renters insurance covers their property

* Investments

* Medical Insurance

* Mark is taking advantage of company match

* Low tax bracket

Weaknesses

* Inadequate retirement savings

* Inadequate current savings

* Inadequate higher education savings

* Negative discretionary cash

* Inadequate emergency savings

* Ava has no wills (living or testamentary)

* Current liabilities

* High debt to income ratio

* Motorcycle isn’t insured

* Ava has no retirement savings

* No power of attorney

* Mark has all of his estate going to his children

* Investments are undiversified

Current Ratio = $1500 Current Assets / $15863 = .095

Consumer Debt Ratio = $3093 Non Housing Monthly Debt Payments / $3924 Monthly Gross Income = .79

Debt –to-Income Ratio = $3030.08 Monthly Debt Payments and Housing Costs / $3924 Monthly Gross Income = .77

Housing Payment Ratio = $590 Monthly Housing Costs / $3924 Monthly Gross Income = .15

Solvency Ratio = $70344 Total Assets / $70390 Total Liabilities = .1

Savings Ratio = $3070 Savings Per Year / $47090 Gross Income = .07

Savings less than 10% of income

I point out that their high current ratio, debt-to-income ratio, housing payment ratio, savings ratio and solvency ratio are not favorable and will affect their all of their financial goals.

Long...