Susan is 39 years old and works as a senior operations manager. Michael, 41, is an...

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Susan is 39 years old and works as a senior operations manager. Michael, 41, is an IT project manager. They have approached you to provide advice on their financial position, specifically in the creation of wealth over the long term. They have provided the following income and expense details: Susan's salary: $120,000 (plus SG) Michael's salary: $180,000 (plus SG) Michael's bonus: usually $50,000 p.a. Michael has an investment unit at Camperdown, in inner-city Sydney, valued at $650,000 (market value) with rental income of 3% net of associated management expenses. The unit is in Michael's name with an investment loan of $500,000 with interest-only repayments of 7.70% p.a. Their home is jointly owned and valued at $700,000. They repaid their mortgage last year and plan to spend $45,000 to renovate the kitchen and bathroom next year. They have an Australian share portfolio of $120,000 which is owned jointly. They estimate their living expenses to be approximately $80,000 p.a. Their Year 1 $ Year 2 $ combined annual cash flow would be constructed as follows: Income Salaries 300,000 300,000 Bonus 50,000 50,000 Rental income 19,500 19,500 Dividend 4,836 4,836 income* Total income 374,336 374,336 Expenses Living 80,000 80,000 expenses Tax (incl. 124,879 124,879 Medicare) Loan 38,500 38,500 repayments Renovations Net surplus 0 45,000 Total expenses 243,379 288,379 130,957 85,957 Owner Susan and Michael's net worth, based on the information in the case study above, can be established by the following balance sheet: Assets Asset Lifestyle assets Value ($) Principal residence Joint 700,000 Total 700,000 Investment assets Australian shares Joint 120,000 Investment property Michael 650,000 Total 770,000 Liabilities Liability Owner Interest Payment Payment Tax Value ($) rate % type amount/ deductible p.a. frequency Investment Michael 7.70% Interest $2567/ Yes 500,000 loan Total Total net worth only month 500,000 970,000 Susan is 39 years old and works as a senior operations manager. Michael, 41, is an IT project manager. They have approached you to provide advice on their financial position, specifically in the creation of wealth over the long term. They have provided the following income and expense details: Susan's salary: $120,000 (plus SG) Michael's salary: $180,000 (plus SG) Michael's bonus: usually $50,000 p.a. Michael has an investment unit at Camperdown, in inner-city Sydney, valued at $650,000 (market value) with rental income of 3% net of associated management expenses. The unit is in Michael's name with an investment loan of $500,000 with interest-only repayments of 7.70% p.a. Their home is jointly owned and valued at $700,000. They repaid their mortgage last year and plan to spend $45,000 to renovate the kitchen and bathroom next year. They have an Australian share portfolio of $120,000 which is owned jointly. They estimate their living expenses to be approximately $80,000 p.a. Their Year 1 $ Year 2 $ combined annual cash flow would be constructed as follows: Income Salaries 300,000 300,000 Bonus 50,000 50,000 Rental income 19,500 19,500 Dividend 4,836 4,836 income* Total income 374,336 374,336 Expenses Living 80,000 80,000 expenses Tax (incl. 124,879 124,879 Medicare) Loan 38,500 38,500 repayments Renovations Net surplus 0 45,000 Total expenses 243,379 288,379 130,957 85,957 Owner Susan and Michael's net worth, based on the information in the case study above, can be established by the following balance sheet: Assets Asset Lifestyle assets Value ($) Principal residence Joint 700,000 Total 700,000 Investment assets Australian shares Joint 120,000 Investment property Michael 650,000 Total 770,000 Liabilities Liability Owner Interest Payment Payment Tax Value ($) rate % type amount/ deductible p.a. frequency Investment Michael 7.70% Interest $2567/ Yes 500,000 loan Total Total net worth only month 500,000 970,000