Well, now it was the moment of truth. Jocelyn needed to combine all of her saving goals into one overall financial plan. Complete the table below using the figures you calculated in the earlier questions for her car, house and retirement savings goals. If you prefer to work electronically, here is the Jocelyn's Savings Plan spreadsheet^[1] that aligns with the chart below.

For Car Savings and Payments and House Savings and Payments, be sure to include both the amounts saved annually PRIOR to purchase, as well as loan payments AFTER purchase. Add the Car + House + Retirement amounts to get the Total Savings and Payments and calculate it as a percentage of Jocelyns salary.

13.

Year	Salary	Car Savings and Payments	House Savings and Payments	Retirement Savings	Total Savings and Payments	Total Savings and Payments as % of Salary
Cash flows	3% increase annually	Save for 3, Pay for 5	Save for 10, Pay for 30	Save for 30
1	$50,000
2	$51,150
3
4
5

6
7
8
9
10
11
12

Answer this:

14. Does this seem like a reasonable financial plan that Jocelyn can achieve?

If you think it is reasonable, explain why.

If not, explain how you might adjust her goals and saving priorities.

15. What assumption do you feel most concerned about as you think about why Jocelyn may fall short in achieving her goals?

16. Do you think the challenge that Jocelyn faces in years 13 to 30 will be more or less challenging than those she faces in the first twelve years? Why?

With savings spreadsheet in hand, Jocelyn raced off to see her financial advisor, Tommy Stockman. She felt that she had a good handle on her savings goals and what would be required to get the car, the house and the retirement that she envisioned. Tommy greeted her in his office and took a few minutes looking over her documents:

When he was done reading, he slowly handed the documents back to Jocelyn and spoke confidently to her:

Jocelyn, this is some great work! You have clearly thought through what is required to achieve your goals, and I can see the thought and effort that went into your analysis. What if I told you that you could accomplish all of your goals (the car, the dream house and the retirement) by saving LESS? Yes, you heard that right, my plan would actually have you save LESS!

A bit taken aback at this point, Jocelyn only had one question.How? Tommy responded in a more rapid-fire fashion at this point:

Its actually quite easy and low risk, too. Look at all this money that you are saving for your car and home down payments. Only a fool would stick that money in a checking or savings account when you can get a return on an investment in stocks of at least 12%-15% a year. I have this long list of awesome mutual funds that we offer that will get you a great return on your money and the best part about this...the more that I can earn you on those investments the less you will need to save! Just think -- when I deliver this 10% low risk return, you will be doubling your money like every four years! Stop thinking about that $200,000 house. With my advice, a $300,000 or even $400,000 house will be within reach! Why settle for the average house when you deserve better? You do realize, of course, that I am always acting in your best interest, so why do you seem so hesitant?

Jocelyn lobbed in a question at the moment when Tommy was catching his breath:

What about my retirement plan? I read this article that had this very simple approach of putting money into a Target Date Fund and watching it grow. This seemed like a great solution.

Tommy grimaced as he delivered his message:

Target Date Funds are for losers. Sorry that was a little strong Why are so willing to accept mediocre returns? I mean, we have a gold fund that was up 65% in a year; doesnt that sound attractive? Or how about an Emerging Market Leveraged Floating Rate Bond fund that rose 35% a few years back, with incredibly low risk? I have so many better options to choose from than those Target Date Funds. You do want to retire early, dont you?

Let me get the paperwork out so we can start putting your money to work NOW! OK?

Jocelyn saw Tommys passion and wondered how to proceed.

Answer this:

17. What are THREE questions that Jocelyn should ask Tommy regarding his investment advice?

18. Circle at least three of Tommys statements above that your believe are not entirely accurate. List below the corrections to those statements.

19. What would you do if you were Jocelyn?