Question

In: Finance

Cato Boldon 32, CEO and founder of Optimum Athletics, reside in the island of Trinidad and...

Cato Boldon 32, CEO and founder of Optimum Athletics, reside in the island of Trinidad and Tobago with his wife and children. The business has been in operation since 2008. He decided to start the business during the financial crisis that hit the world in 2008 due his passion for track and field. The company has been experiencing a loss for the last two years and cash flows are beginning to tighten. A major customer owes the company US$100,000 for almost a year. He gets a salary of 5 million per annum from the business. He has savings of US$ 100,000 and his looking to invest to secure his financial future. He wants to enjoy both safety and capital gains. The government of Trinidad is currently in discussion on whether to grant small business in the manufacturing industry an incentive package. Boldon is considering his options. Should I sell the business or go back to management in a corporate enterprise. His has an Masters of Science Degree in Kinesiology.

His two children are aged 9 and 13 yrs old respectively and his wife is six months pregnant. His wife recently completed her Law Degree and is looking to called to the bar in Trinidad and Tobago in the next six months. Her husband had been contributing to her alumni Scholarship Fund for the last 5 years and wishes to continue. His father 60, is not doing well. He was recently diagnosed with diabetes. Boldon recently found out that his father has limited insurance coverage. Boldon is concerned about his retirement and his ability to finance his children education. He wanted the business to be part of his pension plan as he wanted the company to be listed on the Trinidad Stock Exchange. He had to use the deposit that he had saved for his home ownership to fix the family car that was recently damaged by hurricane Irma.

As Financial Advisors you are to: 1. Prepare an Investment Policy Statement for Mr. Boldon

Solutions

Expert Solution

Personal Profile of Client:

Cato Boldon,

CEO and founder of Optimum Athletics (small business in the manufacturing industry)

Resident of Island of Trinidad and Tobago

Age 32

Married with two children (expecting one more child)

Current Financial Summary:

Current Salary: $ 500,000 per annum

Current Total Saving: $100,000

His company is experiencing losses for the last two years, with a bad debt of US$100,000 for almost a year

Expected Expenses in Near Future: Healthcare expenses on Wife, Kids and Father

Objectives:

Investment Planning: Investment of his saving that gives both safety and capital gains in long term (Moderate Risk taking capability).

Retirement planning with ability to finance his children education

Short term liquidity needs: Expenses on wife's delivery, aging Father's health (with little insurance coverage)

Long term Goal: To get his company listed on the Trinidad Stock Exchange.

Suggestions by Financial Advisor:

As Mr. Boldon is young and has a yearly salary of $500,000, which will be able to manage his short term liquidity needs including his house hold expenses, delivery of his third child (in 3 months) and health care expenses of his aging father.

But since his business in not running in good condition for past two years and is incurring losses, there can be a loss in income by him in coming future. This loss in fixed income can be covered by his change in job or by his wife’s income that might start after her joining to the bar in Trinidad and Tobago (in six months)

His only way to build up wealth for retirement and future is by investing his existing saving in portfolio with asset allocation of 50% in stock assets and 50% in fixed assets.

With moderate Risk Profiling we suggest him to do a strategic allocation in assets which can be reviewed in a years’ time frame.


Related Solutions

Cato Boldon 32, CEO and founder of Optimum Athletics, reside in the island of Trinidad and...
Cato Boldon 32, CEO and founder of Optimum Athletics, reside in the island of Trinidad and Tobago with his wife and children. The business has been in operation since 2008. He decided to start the business during the financial crisis that hit the world in 2008 due his passion for track and field. The company has been experiencing a loss for the last two years and cash flows are beginning to tighten. A major customer owes the company US$100,000 for...
Cato Boldon 32, CEO and founder of Optimum Athletics, reside in the island of Trinidad and...
Cato Boldon 32, CEO and founder of Optimum Athletics, reside in the island of Trinidad and Tobago with his wife and children. The business has been in operation since 2008. He decided to start the business during the financial crisis that hit the world in 2008 due his passion for track and field. The company has been experiencing a loss for the last two years and cash flows are beginning to tighten. A major customer owes the company US$100,000 for...
You are the founder, CEO, of a new company and are responsible for setting up a...
You are the founder, CEO, of a new company and are responsible for setting up a corporation. Please discuss the following: How you would ideally like to structure your company (pick an industry to describe and a product or service). Also, what type of corporate governance mechanisms would put in place. What kind of culture you would like to have and why? Discuss how you would recruit, train, and maintain employees and if you would reward people individually or for...
Sam McKenzie is the founder and CEO of McKenzie Restaurants, Inc., a regional company.
  MCKENZIE CORPORATION’S CAPITAL BUDGETING Sam McKenzie is the founder and CEO of McKenzie Restaurants, Inc., a regional company. Sam is considering opening several new restaurants. Sally Thornton, the company’s CFO, has been put in charge of the capital budgeting analysis. She has examined the potential for the company’s expansion and determined that the success of the new restaurants will depend critically on the state of the economy over the next few years. McKenzie currently has a bond issue outstanding...
Use the following for questions 3-4. Consider two countries, Australia and Trinidad. Both are island economies...
Use the following for questions 3-4. Consider two countries, Australia and Trinidad. Both are island economies endowed with major fishing resources and moderate climates. For simplicity, imagine that both countries have two industries: tourism and fishing. For the history of the country Australia has been open to free trade. Currently, Trinidad is closed to trade – there are no tourist visitors and no exported (or imported) fish. 3. The current market price and quantity of fish in Trinidad would be...
Brian Kelly is the founder and CEO of Kelly’s Barbecue and Grill (KBG).  KBG is a local...
Brian Kelly is the founder and CEO of Kelly’s Barbecue and Grill (KBG).  KBG is a local retailer of outdoor cooking equipment, ranging from small portable gas grills to competition grade barbecue grills and smokers.  Kelly has operated his business profitably for nearly 15 years.  In recent years, sales revenues and profits have been stagnant.  As an old-fashioned type, Kelly has always operated his business on a cash-only basis.  After consulting with his accountant, Josh Adams CPA, Kelly believes that his sales policy has left...
Suppose you are now a Founder and CEO of Rent the Dresses, Inc., an online rental...
Suppose you are now a Founder and CEO of Rent the Dresses, Inc., an online rental site for premium dresses primarily for women. Because the business is a start-up, there is no accountant on the management team yet, so you have been doing the accounting. You notice that an average of 100,000 visitors come to your website, of which 60% browse through the website. 20% of them register and put at least one item in the shopping cart. One out...
You are the co-founder and CEO of Fantastic PLC. The below announcement regarding one of the...
You are the co-founder and CEO of Fantastic PLC. The below announcement regarding one of the products (product X) your company produces has been brought to your attention by your partner asking you for advice on what the company should do in light of this event: A documentary recently aired on the health channel followed a scientific research that confirmed products, like product X, contain carcinogenic chemicals in concentrations harmful to human health Write a report to include the following...
Please, i need an analysis on the life of jeff bezoz founder and ceo of amazon,...
Please, i need an analysis on the life of jeff bezoz founder and ceo of amazon, his background, career and key leadership characteristics. also how does a company cope with accelerating change. and how can a firm encourage innovation.
On the Forbes 2018 list of the World’s Billionaires, Jeff Bezos, founder and CEO of Amazon
On the Forbes 2018 list of the World’s Billionaires, Jeff Bezos, founder and CEO of Amazon, ranks at the top with a net worth of $112 billion. Does this “richest man in the world” face scarcity, or does scarcity only affect those with more limited incomes and lower net worth?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT