David is a $45-$year$-$old land surveyor who works for the City of Whitehorse council, while his

wife Belinda is a human resources consultant at Monash University. Due to Belinda$$s

employment at Monash University, both David and Belinda have their superannuation accounts

with UniSuper. David is a risk taker, so he chooses the Growth investment strategy for his

superannuation money while Belinda invests her super in the Conservative investment option.

The couple shares a portfolio of assets comprising of equity in ANZ and BHP as well as a

studio apartment in Bayswater that Belinda inherited from her grandfather. The couple live in

a $3-$bedroom mortgaged house in Clayton and are paying off the mortgage using their salaried

income. Apart from the mortgage payments, they have a range of other living expenses leaving

them with a small combined annual saving. Here are both Belinda and Davids client profiles: Client Profile Belinda Tang:

age $>42$

annual income $>95,000$

superannuation balance $>88000$

super performance $(5$ years$)>4\%$

super contribution rate $>17\%$

average income tax rate $>26\%$

expected annual saving rate $>6\%$

Combined Assets:

ANZ shares $>10,000$

BHP shares $>15000$

Studio apartment $>300000$

Rental yeild $>4\%$

ANZ historical return inc div $>5\mathrm{.}29\%$

BHP historical return inc div $>11\mathrm{.}80\%$

They both plan on retiring in $18$ years.

What is David and Belinda$$s total combined wealth comprising of superannuation

balances, savings, share portfolio and real estate at the time of their retirement?

ii$.$ Both David and Belinda are union members, and their salary increases are protected by

their respective enterprise bargaining agreements which guarantee them a salary

increase of $3\%$ per annum. How would their total combined wealth change when the

annual salary increases are accounted for?

Note from Clive: Their super balances can be calculated using the respective current $5-$year

return on investment. The value of the shares can be calculated using their respective historical

returns, the rental income and their annual savings after tax can be invested at an assumed rate

of $4\mathrm{.}5\%$ per annum, the expected capital appreciation on the studio apartment is $5\%$ per annum.

Despite the capital increase on the studio apartment, the annual rent stays the same which is

calculated as the current value of the studio apartment multiplied by the rental yield. Include

the following table in your report and clearly state all assumptions. how do we calculate these numerically, I am mixing up the formulas and don't think I am doing these correctly. Thank you. Please go through the calculations and formulas step by step.

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