***Please note I don’t have a long-term goal with would fit with this assignment currently. So I ask for some help in determining what would be a reasonable long-term goal regarding Investment Capital for a young family of 5 that doesn’t believe in over-extending themselves. All I know for sure is that currently, I want to build financial wealth so that my kids don’t have to struggle like my husband and I did… that they understand the value of a dollar.****
In this activity, you’ll use a worksheet to determine how much money you must come up with to reach a given financial goal.
INSTRUCTIONS
Look back at the list of long-term financial goals you developed in the very first assignment of this course (Module 1 – Personal Financial Goals). Choose one of those long-term goals, and use the attached Excel file (ws_11.1.xls) to determine how much you would need to set aside today to reach the amount of money necessary for your goal.
Describe the goal in Cells E3 and E4.
Indicate the estimated total amount necessary for your goal in #1, and the projected average return on investments in #2.
Now, if you want to set aside one lump sum today, you’ll fill in the blue cells in Part A, #3. You’ll see how much the required one time investment would be in #4.
Or, if you want to set aside an initial investment, and make regular, annual contributions over time, you’ll fill in the blue cells in Part B, #s 5-9. The amount of the annual contributions required to reach your goal will be calculated in #10.
Save your Excel file as “worksheet 11.1 – your name”.
Once you have completed the worksheet, write a 2-3 paragraph reflection discussing the following:
(Begin by describing your long-term financial goal and the estimated cost of the goal.)
Do the results of the worksheet indicating how much you need to set aside either today, as a lump sum, or in annual investments over time, surprise you?
Based on these results, do you think your financial goal is attainable? Or do you think you need to amend it?
Do you have a plan in place to invest this amount of money?
Why is it important to have investment objectives when embarking on an investment program?
The self-reflection paper should be created in a separate Word document, and saved as “investment capital needed – your name”.
The completed Worksheet 11.1 file
