Question

You are a financial adviser and the following information is an extract of data you gathered as part of fact finding during an initial client consultation for married couple Janet and Steven Blake. Janet works as a Teacher and Steven works as town planner at the local government. The have two children who are aged 12 and 14.

The Blake’s have diversified their investments by investing equally in a bank savings account, a fund and some Macquarie Group Ltd Shares. Their risk profile is equivalent to that of a growth investor. They have come to you understand how they should invest in the future.

Income for year ended 30^th June 2018:

Income type	Amount
Gross Salary- Janet	$70,000
Gross Salary- Steven	$54,000
Vanguard Bond Fund- Distribution 3.85% (Janet)	$770
NAB Savings Account Janet- Interest 2.3%- Janet	$230
Macquarie Group Limited- Dividend $2.05 per share- Steven	$410 (partial franking credit $80)

Current Assets and Liabilities

Assets (Ownership)	Current valuation $	Liability (Ownership)	Current valuation $
Home Contents (Joint)	20,000	Credit cards (Joint) Includes the annual interest cost	6,000
Car (Joint)	35,000	Car loan (Joint) 5 year term at 12%	30,000
Bank Account: Cheque Account (Joint)	8,000
Investments: NAB savings Account (Janet) Vanguard Bond Fund (Janet) Macquarie Group Ltd Shares (Steven)	20,000 20,000 20,000

Required:

Review the Blake’s investment portfolio and explain whether they are diversified adequately. Consider both investments across different asset classes and investments within classes. Make two recommendations on how they should change their portfolio for future investments and justify these recommendations.

Answer 1

Particular	Total
Salary ( 54000+70000)	124000
Total Income	124000
Credit crad Payment	6000
Car Loan Repayment (667.33*12)	8004
Living Exp (Assume @ 50 % of Income	62000
Total Exp	76004
Net Savings ( Total Income - Total Exp)	47996
This Saving amount Blake`s can invest in below mention income`s highest Net ROI i.e. Vanguard Bond
First of all if Janet have investment of $20,000 in NAB Saving Account and interest rate is 2.3% then return interst amount is $ 460
Current Income - Now
Particular	Investment Amount	Investment Rate of Return	Amount of Return on Investment	Tax (Assume)	Net Income	Net ROI
NAB Saving Account	20000	2.30%	460	30%	322	1.61
Vanguard Bond	20000	3.85%	770	30%	539	2.7
Macquaire Shares	20000	2.05%	410	20%	328	1.64
Total	60000		1640		1189
Current Income - Option 1
Particular	Investment Amount	Investment Rate of Return	Amount of Return on Investment	Tax (Assume)	Net Income	Net ROI
NAB Saving Account	5000	2.30%	115	30%	80.5	1.61
Vanguard Bond	45000	3.85%	1732.5	30%	1212.75	2.7
Macquaire Shares	10000	2.05%	205	20%	164	1.64
Total	60000		2052.5		1457.25
Current Income - Option 2
Particular	Investment Amount	Investment Rate of Return	Amount of Return on Investment	Tax (Assume)	Net Income	Net ROI
NAB Saving Account	5000	2.30%	115	30%	80.5	1.61
Vanguard Bond	50000	3.85%	1925	30%	1347.5	2.7
Macquaire Shares	5000	2.05%	102.5	20%	82	1.64
Total	60000		2142.5		1510
Also Suggest that Car Loan require to repay monthly installment of $ 667.33
So Blake`s having ideal bank balance in cheque account so suggest to trf some balance to Vanguard Bond to get more income for scare resource of investment