1a. yearly cashflow statement

1b. time needed to pay off his debt

1c. time needed to pay off min pay and invest or save the rest

1d. savings required to achieve goals

Market Information Expected annual inflation will average 3.5% (CPI) Prime Rate is now 5.00% Unemployment rate is currently 3.1% Larry Lam is 25 years old who is just a few years out of universify. He is $48,000 in debt. Of this amount, $40,000 is owed on student loans and $8,000 is owed on two credit cards. "I overspent for shopping, exchange program, study tour on credit in University." Lam explains. I only repaid the minimum payment on my credit cards. "Now I want to get this debt paid off as soon as possible so I can increase my savings," Lam does not want any defer payment. Therefore, Lam decided not to make any investment until he kills his debt. He does not participate in any saving or investment plan. He saves money with his own discipline and is currently saved $4,500, but he feels it is too slow for him. Lam also decided that once all the debts are killed, he would like to invest in the stock market. He will put 25% of his saving in a stock index fund, 25% in aggressive growth, 25% in an actively managed growth fund, and 25% in a money market fund. "I wasn't sure what to do," he notes, "so I made the same choices as a co-worker." He'd like to save more, both for retirement plan and for emergencies. "I don't have much to fall back on if I have some other emergency, "He worries, After repaying his debts and increasing his savings, Lam wants to purchase a home in the New Territories and a new car within ten years. He is willing to assume some investment risk to achieve a high rate of return. Lam shares an apartment with a friend and pays \$5,000 per month for rent. He earns $15,000 per month. For the MPF, Lam and his employer contribute 5% of the relevant income per month respectively. Larry has a plan for his future life. "Nowadays, a degree honor can't guarantee a successful career anymore," He believes. He realizes that postgraduate study should be a must unless he doesn't want to be promoted. He understands that the tuition fee is not cheap and feels that further study would cost him about $150,000. Even though he would not take the study very soon, He believes that he will do so within five years. For his love, he thinks that he should get marry before 30 . He thinks he should responsible for all the spending of the wedding. For his plan, he considers that $300,000 would be appropriate. That would include the spending on wedding party, honeymoon travel, wedding coordination, ctc. He would also like to buy a house around $5m after marriage. He is planning to split the cost with his future wife. Like many young university graduates, Lam has now a negative net worth. In other words, at this stage of his life, his debts (S48,000) exceed his assets ($6,000). His assets consist of $1,500 in a checking account and $4,500 in saving account. Lam's employer provides only medical insurance. Lam desires to retire at age 65. "I leamed about the awesome effect of compound interest," He notes, "As soon as I repay my debts, I will save more." Lam's Cash Outflow information per annum Rent $60,000 Entertainment and Eating out $60,000 Transportation $10,800 Utilities $12,000 Holidays $12,000 Personal care and grooming $5,400 Market Information Expected annual inflation will average 3.5% (CPI) Prime Rate is now 5.00% Unemployment rate is currently 3.1% Larry Lam is 25 years old who is just a few years out of universify. He is $48,000 in debt. Of this amount, $40,000 is owed on student loans and $8,000 is owed on two credit cards. "I overspent for shopping, exchange program, study tour on credit in University." Lam explains. I only repaid the minimum payment on my credit cards. "Now I want to get this debt paid off as soon as possible so I can increase my savings," Lam does not want any defer payment. Therefore, Lam decided not to make any investment until he kills his debt. He does not participate in any saving or investment plan. He saves money with his own discipline and is currently saved $4,500, but he feels it is too slow for him. Lam also decided that once all the debts are killed, he would like to invest in the stock market. He will put 25% of his saving in a stock index fund, 25% in aggressive growth, 25% in an actively managed growth fund, and 25% in a money market fund. "I wasn't sure what to do," he notes, "so I made the same choices as a co-worker." He'd like to save more, both for retirement plan and for emergencies. "I don't have much to fall back on if I have some other emergency, "He worries, After repaying his debts and increasing his savings, Lam wants to purchase a home in the New Territories and a new car within ten years. He is willing to assume some investment risk to achieve a high rate of return. Lam shares an apartment with a friend and pays \$5,000 per month for rent. He earns $15,000 per month. For the MPF, Lam and his employer contribute 5% of the relevant income per month respectively. Larry has a plan for his future life. "Nowadays, a degree honor can't guarantee a successful career anymore," He believes. He realizes that postgraduate study should be a must unless he doesn't want to be promoted. He understands that the tuition fee is not cheap and feels that further study would cost him about $150,000. Even though he would not take the study very soon, He believes that he will do so within five years. For his love, he thinks that he should get marry before 30 . He thinks he should responsible for all the spending of the wedding. For his plan, he considers that $300,000 would be appropriate. That would include the spending on wedding party, honeymoon travel, wedding coordination, ctc. He would also like to buy a house around $5m after marriage. He is planning to split the cost with his future wife. Like many young university graduates, Lam has now a negative net worth. In other words, at this stage of his life, his debts (S48,000) exceed his assets ($6,000). His assets consist of $1,500 in a checking account and $4,500 in saving account. Lam's employer provides only medical insurance. Lam desires to retire at age 65. "I leamed about the awesome effect of compound interest," He notes, "As soon as I repay my debts, I will save more." Lam's Cash Outflow information per annum Rent $60,000 Entertainment and Eating out $60,000 Transportation $10,800 Utilities $12,000 Holidays $12,000 Personal care and grooming $5,400