Steven and Gabrielle $-$ Case

Steven and Gabrielle are now $38$ years old and have $3$ children. One night after the children were

asleep, they have a conversation about their future and the future of the kids. They estimated that it

would probably cost approximately $$150,000$ to send their kids to their Alma Mater, the University

of Maryland. In addition, they plan to retire in $30$ years, and purchase a vacation home in St$.$

Michaels Maryland on the Miles River, which they estimate would cost approximately $$350,000.$

Now they are wondering how they could they afford to do all of this.

Before meeting with their best friend from college, who is a financial planner, they organize all of

their financial information $($next slide$)$ and discuss their family's financial goals.

Steven and Gabrielle $-$ Case Questions

Describe the stage in the financial life cycle stage that Steven and Gabrielle are?

Review Steven and Gabrielle's current financial situation. Suggest specific and

measurable short$-$term and long$-$term investment goals that can be implemented at

this stage.

Using the investment goal guidelines, assess the validity of Steven and

Gabrielle's short and long$-$term goals $($college education for their children,

retirement, and a second home$).$

Currently Steven and Gabrielle, have an emergency fund of $$21,000.$ Their

monthly expenses are $$4,264.$ Should Steven and Gabrielle re$-$evaluate their

emergency fund? Is it sufficient if one of them should lose their job?

Steven and Gabrielle estimate that they will need to accumulate $$150,00$ in $15$

years in order to send their $3$ children to college. As a result, they plan on

budgeting $$7,000$ annual towards this goal. Will they have enough money to pay

for their children's education if they are expecting an average annual return of $7\%$

on their investments?