Jack and Dina Taylor, aged 33 and 30, have three young children, Dylan, Ryan, and Violet, aged 9, 7 & 2, and live in California. They own a fire safety company, which occupies Dina full-time, though workload varies seasonally. Jack handles all the childcare as well as business paperwork. The business is doing reasonably well. The business owns two vehicles and equipment worth $35,000.

After covering basic living expenses Jack and Dina can put aside $900 as savings each month. They have managed to save $55,000 so far during their working lives and this money is earning 2.65% annual interest, compounded monthly, in a bank fixed deposit. As they are self- employed, they have no KiwiSaver funds.

Jack and Dina are renting at present but wish to purchase a home. Their goal is to put down a 30% deposit on a $400,000 home in three years' time. They are finding, however, that the average 8% p/a house prices rise is making it difficult as they are chasing a moving target. The couple also has a credit card on which they owe $8,700 according to their last bill. They are trying not to use the card anymore but tend to only pay off the minimum amount (2% of the balance) each month. The interest rate on the card is 21.74%, compounded monthly.

Jack and Dina have somewhat different ideas about the best way to manage their money going forward. Jack is happy to keep their present and future savings in the bank earning a moderate rate of interest. However, Dina has started to take a more active interest in finance and investment and has come to the conclusion that, if they are to have any chance of achieving their goal of saving for the house deposit, they must take a much more aggressive approach. She has been doing some intensive research on the internet, as well as asking around.

Her friend has advised her that his own aggressive growth mutual returned 25% and 18% p/a over the last two years. Dina hopes that she will be able to persuade Jack to invest their $55,000 in an aggressive fund for a period of two years, while investing any additional future monthly savings into the bank. Jack laughs at her idea and insists that their money should stay in fixed deposit.

After a lot of heated discussion, Jack and Dina decide if they want to own a house then they need a new approach and decide to get investment advice. They go and see an ex-school-friend, Cassie, who commenced work as a commissioned mortgage broker two months ago. They ask Cassie to provide them with more information on investing, and what Cassie thinks about the merits of their respective approaches.

During the course of a one-hour meeting, Cassie agrees that a more aggressive investment approach is required and is more likely to help them achieve their goals. Cassie also states that sources of information on the investment process are somewhat limited and that Jack and Dina have made the right decision in approaching her for advice. Cassie recommends that they invest in a new property development firm, Caster Property, established by a friend of hers. Caster shares cost $2:15 each. Being a start-up, Caster has only made a profit once in its 3 years of existence. Despite this it has paid a dividend of 12c per six-months, and the last annual report promises capital growth of 30% per year. Its revenues have changed in price by -15%, +17%, and -5% over the last years.