Question 3 (35 marks): Mike is a new grad with big dreams. He is 32 years old and just graduated from his MBA. He is under a lot of pressure from his family and his girlfriend he doesn't want to be trapped working the corporate life style although it offers stability through a steady pay cheque. He has 3 primary goals, i) get married in 2 years or his girlfriend will kill him, and ii) retire by age 40 with an income of $300,000 per year, and lastly iii) build a real estate empire which will provide him with a net worth of $100M by age 60. For the wedding he budgets he will need $60,000. He doesn't believe this will be a problem but this may be a minor setback. His incorporated financial planning business earns $300,000 gross every year, netting $225,000 into his corporate bank account yearly. He draws a salary to cover their expenses as they need it. They have total expenses of Mike's girlfriend has a salary of $65,000 annually ($52,000 net). $5000/month. He currently owns nothing and has a student debt of $80,000. He is a high risk taker and expects an average investment return of 12%. Assume that private loans pay 14% interest yearly, and 2.5% lenders fee. The minimum private loan he can participate in is $50,000 (as a lender). Assume that real estate appreciates 10% per year. Assume that for every $500,000 in mortgage, the monthly mortgage payment is $1250. Assume that total expenses (not including mortgage) for any rental property is 25% of gross rents. Assume that the monthly gross rent per room is $700. Assume that for every $500,000 purchase price, the investment property will have 5 rooms. Assume that the minimum purchase price is $500,000. Assume that the minimum down payment is 5% with 5% closing costs. The average business he can buy generates $10,000 of free cash flow monthly for every $1,000,000 of gross revenue. Most of the businesses he has come across generate $3,000,000 of gross revenue yearly, and have an asking price of $3,500,000. Keep in mind that the banks will allow him to borrow 5x his total income from all sources. Put together a financial plan to get him to where he needs to go