Personal Life - An Average Joe in Malaysia

Joe is married and currently 35 years old with 1 children(3 years old) and he has a sound career as a relationship bank branch manager in Malaysia. His family income with his wife is able to generate average monthly family income of 9,000 a month. He has no difficulty in meeting basic living expenses such as phone bill, rental, utilities bill, a car installment and more as per the personal budget as per attached. The recent COVID19 Crisis has created a situation of vast uncertainty and he plans to minimize the impact on his financial situation so that he is able to sustain his lifestyle.

Assets/Liabilities

Affordable home valued at Rm700,000, 30 years loan taken with 10% down payment when he was 30 years old.

Fix Deposit: Rm 50,000

Term Insurance: Rm 250,000 with RM 200 monthly installment

Car: Honda Civic with 9 years loan term and 7 years remaining

Credit Card Debt: RM5,000

Savings account: RM5,000

Risk Profile: Risk Seeking

KWSP Savings: RM80,000

The following are his short term goals and objectives:

Currently studying for his MBA on the part time basis and expected to complete in 1 year.

Plan to have additional children in 2 years time.

The following are his long term goal and objectives:

To reduce his current outstanding debt

To reduce overall expenditure by maintaining his Civic.

To retire by the age of 50 years age

To support his aging parents who will be approaching retirement in 2 years.

Make the remaining assumptions based on the above context deemed reasonable.

Question:

1.Given the range of objectives that is deemed to be a reasonable lifestyle, your group is expected to provide a comprehensive projection with consideration to time value of money. Appropriate level of assumptions should be undertaken to assist Joe to achieve his life long objectives.

2.Joe is considering investment his savings to maximize the return. At the same time, he is pondering if allocating the savings in insurance to protect his family against unforeseen circumstances. Advise.

3.Using the profile information and individual lifecycle assumptions you have derived, assuming that Joe would like to focus on growing his wealth, provide a series of recommendation to a mutual funds that you would recommend to Joe based on the available funds at www.fundsupermarket.com.my. Explain the rational of the choices selected. You are required to make sound assumptions that would allow academic discussion in your report with primary consideration to risk and return.