Ryan is a 22-year-old man, who graduated this year from Shepherd with a B.Sci. degree in Computer Science. He works for a tech company as a design engineer. He earns $50,000 for the first year and will receive a moderate 4% increase per year for the next four years. By then, his job is due for a review for promotion. His supervisor told him that if he would be promoted to team leader, he would lead a team of 10 and the salary would be 50% more. Besides his career, Ryan has a number of goals in the near and distant future:

1. He wants to study in an MBA program for 3 years so he can develop his leadership and management skills for the future. The program requires a one-year-long study and costs $30,000.

2. He likes to buy an entry-level jet ski next year. To reduce the cost, he is considering buying a used one for $3,000.

3. He is in a stable relationship with Judy and wants to set aside $10,000 for marriage and the start of a new family in 6 years.

4. His parents had helped pay for his collegiate education and he feels he must do something to show his love to them. He plans to buy a $6,000-worth vacation package to Italy for them when they retire in 10 years.

5. Although he just started his career, he wants to accumulate funds equivalent to the current value of $100,000 by retirement at 67. As Ryans financial planner, you give him the following economic information:

1. Inflation rate is expected to be 3% per annum(0.25% per month). Prices of goods and services will increase accordingly to reflect inflation.

2. The return to a reasonably safe investment portfolio stands at 6% per annum (0.5% per month). We assume that Ryans savings will continue to earn interest until expended.

Question: In order to come up with sufficient funds for all the items at the point of making the purchase, build a savings schedule for Ryan. (Use the First Trial on page 36 of Book 1 as a reference)

Year Necessary monthly total savings 1 $1,412.64 2 3 4 5 6 7 8 9 10 11-45

3. Can you think of a better savings plan that will smooth Ryans savings schedule? If yes, please provide your idea.

4. At last, Ryan tells you that a friend of his told him about a high-yield portfolio consisting of mostly high-growth small stocks and asks you if he should take such a move so he can save less to meet his goals and spend more now. Based on Ryans overall conditions, how would you reply?