PRIVATE WEALTH CASE: DESIGNING AN INVESTMENT PLAN FOR JERRYW.Background

Jerry W. has just sold her business based in Central New York State to a large retail chain for $25 million, resulting in two lump-sum after-tax payments of $2.5 million each (June 30 and December 31 of last year) and residual after-tax cash flows of $3.5 million in each of the next two years. A single $5 million payment in the form of publicly traded stock of the large retail chain was received in June of last year. The stock position has since increased in value by 25 percent. The latter two cash payments are conditional on the business meeting certain performance criteria.2 Jerry will retain some business real estate (portion of a strip mall), which is expected to generate $200,000 (pretax) annually (paid monthly). She will remain with the company for one more year without pay to help manage thetransition.Jerry is a college graduate, 44 years old and single. Her parents are alive and she has one sibling, age 47, who is married with three children, ages 10-16. She has never had much money and lives modestly. She expects to need $2,000 (after-tax) a week to cover living expenses, excluding mortgage payments. Jerry has little investment experience, having reinvested company profits and held her financial assets (approximately $200,000 excluding sale of the business) in an interest-bearing checking account for personal and business spending. She has no retirement or insurance accounts. Although she has received numerous cold-call investment solicitations, these have merely resulted in a loss of capital.

Financial Plan:

Using your client's information and what you have learned in this course, develop a financial plan for your client, offer recommendations for the client's portfolio, and provide a justification for the recommendations presented. Excluding the necessary charts and graphs, the project must include the following information:

• A detailed explanation of the financial plan, including the investment objectives for the portfolio, based on the unique needs and preferences of the client.
• Descriptions of any investment constraints, liquidity needs, and the client's time horizon.
• A justification of each of the three choices of investment recommendations you will make to the client.

Executive Summary Presentation:

An "Executive Summary" that encompasses the diagnosis of the client's needs, how you plan on addressing those needs, and three options you recommend the client could utilize as remedies. You must be able to defend your prescriptions for success with relevant measures of risk and return. This summary needs to be accomplished in a 5-8-slide PowerPoint, not including title and reference slides.

Christian Worldview Reflection:

Finally, assume that your client expresses a desire to have investments aligned to Christian worldview values. address how your recommended financial plan for your client might meet their request. If the plan does not currently address that request, how would your recommendations adjust and how can it change the financial plan?