The Financial Plan Assignment is all about you, your aspirations and your plan for
achieving your life and financial goals. It involves developing a comprehensive financial
plan for the rest of your life. It is one of the most useful assignments that you will
undertake at university.
Each section of your financial plan provides you with the opportunity to reflect deeply
on the theory covered in the course and to make practical, specific and detailed
application of that theory to your expected future life stages. You should work on your
financial plan gradually during the term as you cover each Unit. The assignment is
worth 50% of your assessment for this course.
The financial plan that you will develop is far more comprehensive (and useful) than a
typical ‘Statement of Advice (SOA)’ that a financial adviser would prepare for a client.
This is because the focus of this course is on understanding the broad issues that
financial advisers need to consider when advising clients. The follow-on course to this
one, FINS5537 Financial Planning Advice and Ethics, will focus on the process of
developing a compliant and ethical SOA for clients.
This is an individual assignment. Either copying the work of another student or basing
your financial plan on another student’s work is academic misconduct and will result in
a fail grade being awarded for this course.
An important step for writing a financial plan for a client is to first develop a
comprehensive financial plan for your yourself. Basically, it is important that you ‘get
your own house in order’ before you start providing advice to anyone else.
The objective of this assignment is to help you to develop a detailed financial plan that
will act as a roadmap for the rest of your life. It also provides you with an opportunity
to reflect on the theory covered in each Unit and to think about how to practically apply
that theory to your current and expected future situation.
The financial plan assignment is worth 50% of your assessment for this course.
The due date for the financial plan assignment is as follows:
Assessment component Due Date*
Financial Plan Assignment 3:00PM Sat 6 Feb 2021
* All times are Sydney time
The penalty for late submission of the Financial Plan Assignment is 5 marks per day
(out of 100) for each day (or part day) it is submitted after the deadline. This penalty
applies to your score for the financial plan (not the maximum possible score). For
example, if your raw score is 70/100 and the plan is submitted 2 days late, a 10 mark
penalty will apply and so your score would be reduced to 60/100.
Note that there is a small ‘grace period’ of a few minutes after the submission time to
allow for slow internet connections or slow website performance. No penalty will apply
if the submission is within this ‘grace period’. Please do not email me asking if your
submission falls within this grace period.
Any financial plan received more than 7 days after the due date (without approved
special consideration) will automatically be awarded a score of zero.
Special consideration will only be granted in exceptional cases. You are responsible
for developing your financial plan gradually as you work through each Unit of the
course materials. You should work on your financial plan as you cover each Unit and
avoid leaving it until last minute. You are responsible for completing your financial plan
well before the due date/time to allow for unexpected circumstances or illness. Being
ill during the last week before the date of submission will not normally constitute
grounds for special consideration.
If special consideration is granted, the maximum extension that will be granted is
7 days from the original due date. Any financial plans received more than 7 days from
the original due date will automatically be awarded a score of zero.
An application for Special Consideration together with supporting documentation must
be submitted online within 3 working days of the due date. The process for applying
for special consideration is here: https://student.unsw.edu.au/special-consideration
This is an individual assessment. You are permitted to discuss the contents of this
assessment with your family, a spouse or partner. However, all written work, research
and supporting calculations must be your own work. Seeking assistance with your
written work or financial modelling constitutes academic misconduct. Providing
assistance to any other students also constitutes academic misconduct. Copying or
paraphrasing the work of any other student (from current or previous terms) constitutes
academic misconduct. Copying the work of another student and then changing the
details to reflect your situation and strategies constitutes academic misconduct. Using
another student’s financial plan as a ‘reference’ for you while you complete your own
financial plan is also academic misconduct. If another student approaches you for
assistance, please note the time, date and details of the incident and email the details
to me at andrew.hingston@unsw.edu.au .
UNSW has no tolerance for students who are dishonest or seek to obtain an unfair
advantage over other students. Academic misconduct is a serious offence. It can result
in zero being awarded for this assessment, a failure grade for the course and/or
removal from the University.
You should note that all students at UNSW have access to the full suite of Microsoft
Office 365 products for free (on both Windows and Mac). This includes downloadable
versions of the entire Microsoft Office suite to 15 devices (5 desktops, 5 tablets and 5
mobiles).
The steps for downloading the latest version of MS Office are as follows:
1. Go to https://login.microsoftonline.com
2. Login with the same zPass that you use for Moodle using the
‘zID@ad.unsw.edu.au’ version of your UNSW student email. For example:
z1234567@ad.unsw.edu.au
3. Click the ‘Install Office’ button at the top right of the screen.
4. Choose ‘Office 365 apps’ and follow the on-screen directions from there.
More information is available here (although it is a little out of date):
https://student.unsw.edu.au/sites/all/files/uploads/group228/notices/office-proplus.pdf
Please only use Arial (PC) or Helvetica (Mac) fonts to ensure font compatibility.
You will be submitting your financial plan in Microsoft Word format because it is much
easier for me to mark in this format. I will be marking your assignment on a Windows
computer which can cause some font compatibility issues for students who use Mac.
You should choose a text size that is easy for me to read on-screen. For body text with
Arial or Helvetica, this should generally be 11 points. You can choose your own font
size for headings.
The body text colour should generally be black on a white background to make it easy
to read on-screen.
You may use coloured text for headings but please choose colours that are easy to
read on-screen. You should generally avoid using coloured backgrounds or images
behind your text because they often make text difficult to read.
You may choose your own margins and line spacing.
You should submit your assignment in Microsoft Word .docx or .doc format. Microsoft
Word format is preferred to the standard PDF format because I have a large number
of financial plans to mark (in a fairly small time). Microsoft Word documents are faster
for me to open and read.
As a student at UNSW, you have access to free downloadable versions of the full
Microsoft Office suite of products. See the ‘Software’ section on page 4.
If you do not wish to use Microsoft Word, please make sure that your software can
export to a Microsoft Word compatible format (such as .doc).
Please name your financial plan using the following file name format (and extension):
zID Plan.docx
For example, if your student zID is z1234567, your file should be named:
z1234567 Plan.docx
There is no word limit or page limit for this assignment. This is your plan and so you
can ‘invest’ as much time and detail into it as you like. In past terms, most financial
plans are somewhere between 3,000 words and 9,000 words.
As a general principle, you do not need to reference the concepts covered in my lecture
slides unless the lecture slides themselves cite another source or it makes sense to do
so given how you are using the concept in your assignment. In most cases, I’m
expecting you to reference other sources that you have identified to support the ideas
in your financial plan including websites, articles, books or videos.
For websites, I’m usually happy with just the author (or company), the date that it was
accessed and a URL (preferably hyperlinked). For example:
“Domain Property Group, accessed 16 December 2020, https://www.domain.com.au”
As a general principle, you do not need to reference any pictures that you use in your
financial plan.
The standard method for referencing at UNSW is in-text (Harvard). However, it is
easier for me to mark your assignment on-screen if you use the footnote and
bibliography method (Oxford). As such, you may use either in-text or footnote methods
for this assignment (or a combination of both).
Whether you use in-text citations or footnotes, you should always include a list of
references at the end of your financial plan so that I can see all your sources in one
location.
More information on the footnote (Oxford) method is here:
https://student.unsw.edu.au/footnote-bibliography-or-oxford-referencing-system
More information on the in-text (Harvard) method is here:
https://student.unsw.edu.au/harvard-referencing
This assignment includes personal information that is both private and confidential.
Your assignment is not used for any other purpose except to provide you with a mark
for this assessment. It will not be used for academic research or commercial purposes.
You should also note that more than 100 students undertake this course each term
and so it is unlikely that I will remember any of your personal information after I finish
marking them all (my memory isn’t that good!). However, you should note that your
financial plan will be uploaded onto the Turnitin plagiarism detection service for the
sole purpose of checking for similarity with other assignments in past, present or future
terms.
If you are concerned about the privacy of the information, you are welcome to change,
omit or redact any of the specific details that you are concerned about (such as
information about your current income or assets). Doing so will likely make very little
difference to the usefulness of your financial plan, since you can simply change those
details back to the correct values after submission.
If you have a spouse or partner, you are also welcome to perform this assignment
based on your ‘collective’ situation and ‘collective’ plan for the future. Discussing your
financial plan assignment with your spouse or partner does not constitute academic
misconduct. However, the written financial plan, supporting research and calculations
should be your own work. For more information, see ‘Individual assessment’ on
page 4.
The financial plan assignment is designed to assess the key learning outcomes of this
course. Many of these learning outcomes are specific to the Australian financial
system. This presents a problem for overseas students who plan to live abroad after
they graduate, since the taxation and retirement saving systems in those countries
may be quite different from Australia.
Whether or not you plan to live abroad for a significant component of your life after
graduation, for the purposes of this assessment you must assume that you will be
living in Australia for most of your life and be subject to the Australian taxation and
retirement savings system. After you complete this course, you are of course welcome
to change your financial plan to reflect your plans to live abroad.
Please only use Australian dollars as your currency for this assignment. You can
convert any foreign values in Australian dollars at the current exchange rate.
Some devoutly religious students may believe that either receiving or paying interest
on borrowed funds (even under a profit-sharing arrangement using Islamic Banking) is
incompatible with their religious faith. Inclusiveness is important at UNSW and I
personally have the utmost respect for these religious beliefs. However, being unable
to borrow or lend at interest makes many of the financial strategies and products
covered in this course unviable and can therefore make it difficult to assess the learning
outcomes of the course. As such, if you hold these religious views, one approach that
you can take with this financial plan assessment is to base it on a ‘hypothetical thirdparty’ (a friend or client) that is willing and able to borrow or lend money using Islamic
Banking services under a suitable ‘profit sharing’ arrangement. Obviously, you are
welcome to make appropriate changes to this financial plan document after submission
to reflect your personal beliefs and your own preferred financial and investment
strategies.
If you have further questions or would like to discuss an alternative approach, please
contact me at andrew.hingston@unsw.edu.au and I will be happy to discuss it further.
This is your financial plan and so an informal writing style is acceptable in this
assignment. You may write in the first-person if you would like to do so. You may also
make selective use of bullet-points and tables where appropriate.
However, you are reminded that this is also an assessment for a university course.
You are expected to justify your ideas by linking them back to concepts covered in the
course or from other cited sources wherever possible.
As a general principle, it is not acceptable to justify statements in your financial plan
as being true because you “feel that they are true”. For example, “I am going to invest
all my money in bitcoin because I feel as though this will be a good investment for the
long-term.” This form of reasoning is generally not acceptable at university. If you
believe that bitcoin is a good investment for the long-term, you need to justify this with
logical reasoning based on theories covered in this course and/or evidence from other
sources (that are cited). You need to clearly explain your reasoning.
The following instructions on the suggested content for each section are oriented
towards a grade of somewhere between 65 to 80. If you are time-poor due to your
workload in other courses or work commitments, you may choose to miss out some of
the suggested components in each section. However, doing so may adversely affect
your overall score. If you are aiming for a score above 80, you will need to reflect deeply
on the material in each Unit and ‘go the extra mile’ in applying it to your future
anticipated circumstances. This may involve including content in each section that is
not included in these instructions (at your own initiative). The key thing is to balance
your expectations for this assignment with your time-constraints due to other
commitments.
Please also note that the content suggested here is far too much to complete in the
week before the financial plan is due. This assessment is designed to be written each
week as you work through the course material. It is designed to encourage you to think
deeply about the concepts covered in each Unit and to apply it to your own life. In some
ways it is like a journal. You are supposed to study the content of a Unit, then
immediately apply that content to your own life by writing up the relevant sections of
your financial plan.
Your financial plan should contain the following sections and content:
The title page of your financial plan should clearly identify the following information:
Course FINS5510 Personal Financial Planning, 2021 Summer Term
Name Your given name and family name as it appears on your student ID
card with your family name in bold.
Student number Your student number (eg 1234567)
Word count Word count of the main body of your submission (not including
references or Appendices). You can obtain this in Microsoft Word by
highlighting the entire text of the main body of your assignment and
reading the word count from the bottom left of the status bar (at the
bottom left of the screen).
The table of contents should be on a separate page to your title page and should
include a list of your section headings and the associated page numbers.
If you use heading styles correctly in your document, Microsoft Word can
automatically insert a table of contents by selecting:
References … Table of Contents … then select one of the options
This section is a statement of your current situation. It provides a starting point for
assessing the gap between your current situation and the long-term goals that you will
establish in section 2 of your financial plan. Also, identifying a client’s current situation
is also a key component of a ‘Fact Finder’ and a Statement of Advice (SOA). As such,
performing an audit on your own situation is a good experience for undertaking a factfind with a client.
The information is private and confidential and will not be used for research or
commercial purposes. For more information in privacy of your information, please refer
to the section on ‘Privacy’ on page 7.
This section should include the following information:
• Your current age.
• Your preferred gender description.
• Your current relationship status description (eg. single, casual relationship, defacto
relationship, married). This is relevant for the estate planning and some other
sections of your financial plan.
• A list of anyone who is currently financially dependent on you (usually children).
• Your country of residency or citizenship. If you are an overseas student, please
also identify whether you plan to pursue residency in Australia in the future.
• Your current residential living circumstances. Are you living in a residential college
or other UNSW accommodation, renting or co-renting a property, own your own
home (with or without a mortgage) or living with parents?
• Your current mode of study. Are you a part-time or full-time student? Are you a
domestic or international student? What is your degree program and major? When
do you expect to complete your current degree?
• Your current employment status. Are you working part-time, full-time or currently
not working? What is the name of your employer and what is your current job role?
An income statement estimates your income, expenses and profit over the last 12
months. As discussed in Unit 1 of the course, income statements are always measured
over a period of time (often one month or one year). The key formula for an income
statement is income less expenses is equal to profit. Following are a few tips:
• You likely haven’t been recording your income and expenses over the last year and
so some estimation will be necessary. I obviously don’t know the ‘truth’ of your
income and expenses over this period. However, you should do your best to
estimate your key expense categories, since they are usually needed for any home
loan applications and are useful for establishing a budget.
• It is helpful to express your income, expense and profit figures in both ‘per year’
and ‘per month’ bases (as two separate columns). For some expense categories
(such as food), it may be easier to estimate a ‘typical month’ and then multiply by
twelve to estimate the annual figure. For other expense categories (such as motor
vehicle registration and insurance), it may easier to estimate the total expense for
the year and then divide by twelve to estimate the ‘per month’ figure.
• For your personal income (salary or wages), you can use either before or after-tax
income. If you use before-tax income, you should also include income tax as a
corresponding expense.
• In most situations, your employer will have made contributions into your
superannuation account. Even those these payments are not part of your ‘cash
flow’, they are still a source of income. In most situations, 15% contributions tax is
taken out of these employer superannuation contributions. The total contribution is
income. The contributions tax is an expense.
• If you received financial support from your parents and/or a scholarship, you should
include the amount that you received as income (with an appropriate
categorisation). If you parents gave you money in ‘instalments’, estimate the total
amount that they gave you over the last 12 months and then divide by twelve for
the average monthly amount.
• For full-time students, if you earn most of your income during holidays through
casual or part-time employment, estimate how much you earned last year (during
holidays) and divide by twelve to calculate the average monthly income.
• Income should be categorised by the different sources, similar to the examples
covered in the Unit 1 course materials. You are welcome to customise these
categories for your own situation.
• Your estimate of expenses should be broken down into categories such as ‘Rent’,
‘Food’ and ‘Transport’. If you are not sure about your expenses, try tracking them
over a month using a spreadsheet. A spreadsheet is provided under the
‘Spreadsheets’ link provided under the ‘Course Resources’ section of the course
website (Moodle).
• If you live at home with your parents, better quality submissions will include your
share of various bills (such as electricity and food) in your calculation of expenses.
Whether or not you pay for these expenses yourself, they are still expenses that
you are incurring because you are using the service and are deriving a benefit from
that service. If your parents pay for your expenses on your behalf, then the amount
that your parents are subsidising you is a form of income (‘support from parents’).
For instance, if you incur $100 of educational expenses (an arbitrary number) and
your parents pay for the $100 on your behalf, two separate transactions have
occurred. You have incurred a $100 education expense and you have received a
$100 income from your parents (‘support from parents’). The net effect of these two
transactions on your profit is zero because the $100 in income is offset by the $100
in expenses.
• Unit 1 covers the concept of depreciation, which is a measure of how an asset
decreases in value over time. Depreciation is an application of the ‘matching
principle’ in accounting, in which the expense is matched to the period in which the
benefit from the asset is recognised. Many assets decrease in value as a curve,
halving in value every X years. For example, if an asset is purchased for $1000 and
halves in value every 2 years, then it will be worth $500 after 2 years, $250 after 4
years and $125 after 6 years and so on. If you are not sure how much something
you own is worth, look it up on Ebay or Gumtree. The current value of the asset
can be placed on your balance sheet. Better quality submissions will include
estimates of depreciation on key assets as an expense with a very brief explanation
of how it was calculated. Note that some suggested rates of depreciation for cars
and notebook computers are included in the Unit 1 lecture slides, but you are
welcome to make your own estimates.
• Tuition fees are an expense whether you pay them directly, your parents pay for
them on your behalf or you defer payment by using a HECS or FEE-HELP loan
from the government. For example, let’s assume that your course fees are $100
per month (I’m using a ridiculously small number here for simplicity!). If you pay for
these yourself via your savings, the course fees are an expense of $100 per month
and your savings account (an asset) will decrease by $100 per month. If you defer
payment of the tuition fees by using a HECS loan, you have still incurred an
expense of $100 and your student loan (a debt) will increase by $100 per month. If
your parents pay for your tuition fees on your behalf, you have a tuition expense of
$100 and also an offsetting income support from parents of $100. In other words,
you will have a $100 expense no matter whether you pay for them yourself, defer
it onto a HECS or FEE-HELP loan or your parents pay for it on your behalf. If you
pay for the course fees yourself, your savings account (an asset on your balance
sheet) will decrease by $100. If you use HECS, a loan (a liability on your balance
sheet) will increase by $100. If your parents pay for your student fees, you will have
an income of $100 and there will be no change in your balance sheet.
A balance sheet is a statement of your current assets, liabilities and equity (net wealth).
As discussed in Unit 1 of the course, a balance sheet is always measured at a point in
time. The key formula for a balance sheet is assets less liabilities is equal to equity.
Following are a few tips:
• Your assets should mainly focus on ‘financial and property assets’ (such as bank
accounts, property, superannuation or other investments).
• You are also welcome to include other significant ‘physical assets’ such as a
computer or motor vehicle (at their estimated current value).
• Please avoid including ‘lifestyle assets’ such as mobile phones, clothes and
furniture. Use some of your own discernment about what to include … please don’t
post questions in the general forums about whether you should include your ‘pet
hamster’ as an asset, since this is really not very important and wastes everyone’s
time!
• Your student loan (HECS or FEE-HELP) may make your balance sheet look pretty
terrible (creating overall negative equity position for some students), so you are
welcome to exclude your student debt from your list of liabilities and simply list it as
a separate item underneath your balance sheet table. This is a bit of a ‘cheat’, but
it can be a little depressing to have a negative number for ‘equity’ in your balance
sheet from student loans since you are actually investing in the value of your brain
(an asset), and the associated ability to produce a future income. However, please
do not include the value of your brain as an asset, since this would be weird! The
easiest way to find out your HECS or FEE-HELP debt is to just contact the ATO on
1300 650 225, provide them with your tax file number and ask them for your HECS
or FEE-HELP debt balance (noting that the current term may not be included in that
balance).
• If you do not currently have any liabilities or debts (lucky you!), you should still
specify this. For some students, the only debt that they have is their student debt.
• The basic requirement for this section is to just calculate your balance sheet ‘now’.
• Your current balance sheet position will have more meaning if you are able to
compare it against your position at some stage in the past. An optional extension
is to compare your assets, liabilities and equity with values from one year ago. You
can do this by simply adding a second column of figures and labelling it accordingly.
Insurance will be covered in Unit 7, but it is helpful to undertake a quick ‘stocktake’ of
your current insurance situation at the start of the course. However, it could be a good
idea to review this section after you have completed Unit 7 to make sure that you
haven’t missed anything.
This section should include details of your current insurance cover including:
• Death Cover or Term Insurance (lump-sum payment upon death). Note that for
many people, this will be included in their superannuation accounts.
• Total & Permanent Disability (TPD) (lump-sum payment upon disability). Note that
for many people, this will be included in their superannuation accounts.
• Income Protection or Salary Continuance (replacement of income upon accident or
illness that prevents you from working). Some people may have salary continuance
in their superannuation accounts. Others may have taken out separate income
protection policies.
• Any other form of life insurance such as trauma or whole of life policies.
• Home and contents insurance
• Motor vehicle insurance
• Private health insurance or overseas student health cover (OSHC)
• Travel insurance that you normally take out when you travel abroad.
For each of these types of insurance, you should state whether or not you currently
have them. If you don’t currently have this type of insurance, you should list the
insurance and state ‘None’ next to it. If it isn’t applicable (such as motor vehicle
insurance for someone who doesn’t have a motor vehicle), please state ‘Not
applicable’.
As an optional extension, it can be helpful (for you) to list the details of each policy as
in an Appendix to your financial plan (perhaps as a table). Some suggested details
include:
• Insurance provider (company name)
• Product name
• Account number (you can redact/ delete this in your final submission for privacy,
but it is a good idea to include this in your personal copy of this financial plan)
• Annual premium paid
• Level or amount of cover (if applicable)
• Telephone number for making claims
• Some notes (for you) about key inclusions or exclusions (if relevant). This is
normally not a complete list, just some notable ones for your own reference.
You should think carefully about how you will format this section. You may make
selective use of bullet points, tables and other means to concisely and clearly
communicate this information.
Estate planning (wills etc) will be covered in Unit 7. This section should include details
of any current wills or other relevant estate planning issues:
• Do you currently have a valid will in place? If so,
o Who drafted the will for you (lawyer or will kit)?
o When was the will last updated?
o Have you had a significant change in life circumstance since it was last
updated (such as getting married or having children)?
o Who is the executor of the will?
o Who are the main beneficiaries?
o Who are the nominated guardians for any children?
o Who were the witnesses?
• Have you appointed any Powers of Attorney (allowing someone to sign documents
or act on your behalf)?
This section should identify any significant expenses that you expect to occur in the
next 5 years. These might include the cost of a new motor vehicle (less expected sale
price of your existing vehicle), the costs associated with moving out of home or the
funds required for a particularly expensive holiday abroad.
This section should combine the content covered in the first half of the Unit 2 course
material with your own research and life experiences to define and justify a series of
life values and principles, life stages and a set of life and financial goals for each life
stage.
Defining a series of values and the associated life principles is an important foundation
for determining your life stages and corresponding life and financial goals.
Life values and principles are similar but slightly different. Values are used to formulate
principles. A value is a quality or standard of behaviour. A principle is a specific rule
governing your behaviour that is based on that value, sometimes expressed in “I’ll
never …” or “I’ll always …”. Values are general while principles tend to be more specific
and unyielding. Below are some examples of values and a corresponding principle:
Value Principle
Thriftiness I’ll always practice contentment and avoid buying things
just because they are ‘new’ or to impress others.
Open-mindedness I’ll practice listening, compassion and empathy so that I
can understand other people’s thinking and behaviour.
Fairness I’ll never treat people unfairly by making judgements
based on their gender, sexual orientation, age, race,
cultural background or appearance.
Honesty I’ll never lie, even if it is to prevent harm, hurt feelings or
to avoid an uncomfortable situation. I will always be
honest in a way that is also loving, compassionate and
has the best interests of other people in mind.
Relationships matter I’ll never be unfaithful to my friends or partner. I will
always put the long-term interests of people ahead of
short-term financial gain.
In this section, you should briefly identify between 3 and 10 values and some
corresponding life principles. You should also briefly explain why you have chosen
these values and principles based on your beliefs (religious or otherwise), the
principles of happiness covered in Unit 2 or your own research.
Most students write this section with a series of headings for each value (or principle).
Each value (or principle) is then followed by a paragraph explaining why they have
chosen that value or principle (and if possible) citing any research to support the
claims. For example:
Value 1: BLAH
This is a paragraph supporting why I have selected BLAH to be a life value. It
will also identify one or more specific life principles based on this value. There
is also a justification for the value and principles by clearly articulating the
beliefs on which they are based, the course material and/or your own research.
Note that you don’t have to choose the values or principles covered in the course
material in Unit 2. You are welcome to use any values and principles you like, so long
as you clearly explain and justify the reasons why you have chosen those values and
principles.
The component of this section is to clearly document the ‘Visualise your future’ activity
conducted in Unit 2 of the course materials. This involves imagining that you are aged
60 and no longer need two work full-time. What have you achieved? Where are you
living? Who lives with you? Who are the people you care about … and who cares about
you? With whom do you regularly spend time? What do you do together? What
significant health challenges have you experienced? What is your health like now?
What is your schedule in a typical day? What are you passionate about? What are your
hobbies? What do you like to do for holidays and travel?
The second thing that you should do is define a series of ‘life stages’ up to and including
age 60. This should be based on one possible future course of events (out of many
possible life paths). Your future life path can also be thought of as one ‘scenario’
amongst many possible scenarios. As a general principle, the number of life stages
should be between 3 and 7 (preferably not too many since it will add unnecessary
complexity to your financial plan).
The following table shows two different examples of life paths based on two different
scenarios (with ages in brackets). Note that you are only required to have one life path
in your financial plan (two are provided here for illustration only):
Life Path 1* Life Path 2*
Student (19 – 23) Student (19 – 23)
Single worker (24 – 30) Single worker (24 – 30)
Couple with dependent children (30 – 50) Start first business (31 – 50)
Couple with adult children (50 – 60) Start second business (51 – 60)
Financially independent couple (60 – 85) Financial independent investor (60 – 85)
* Note that you are only expected to have one life path in your plan. The two life paths provided here are just examples.
It is fairly normal to feel uncertain about what path your life might go down, so it may
be difficult to image one specific ‘life path’ and the associated ‘life stages’. However, it
is important to have a plan in place for one possible life path. Undoubtably, your life
will end up going down a different path to the one that you cover in your financial plan.
However, as your life diverges from your plan, you can simply ‘update’ your financial
plan document accordingly. As such, your financial plan should be a ‘living document’
that you keep updated for the rest of your life.
Once you have defined a series of life stages, you should briefly describe your
expected relationship, work and living circumstances in each stage. Do you expect to
be single, dating, in a defacto relationship or in a committed long-term relationship?
Do you expect to have children? If so, how many? Where will you be living? What will
be the type of dwelling in which you will be living? Wherever possible, try to link these
details back to the life principles covered under the previous section.
For each life stage, you should now define a series of life, career and financial goals.
Examples of life goals include getting married, backpacking through Europe for a year
or getting a ski instructor licence (or maybe all three at the same time!). An example of
a career goal is to open your own General Practitioner (GP) practice by age 40. A
financial goal might be to save up $X0,000 for a deposit to buy a property by age X.
As discussed in Unit 2, each goal should be expressed in SMART terms. They should
be Specific (well defined, clear and unambiguous), Measurable (specific criteria to
assess attainment), Achievable (attainable with a reasonably probability with adequate
skill and effort), Realistic (adequately resourced and consistent with your life values)
and Timely (clearly defined timeline or deadline).
A poorly expressed goal is “to save up enough money to buy a home”. This lacks
specificity (Apartment? Townhouse? House? Sydney? Country?) and lacks a time
component. A corresponding SMART goal is “to buy a two-bedroom apartment in SW
Sydney for approximately $X00,000 by 1/7/20XX”.
Where possible, you should justify your financial goals with calculations to show that
they are realistic. There are examples of financial calculations to support these goals
throughout the course.
The S.M.A.R.T. principle also helps to explain why goals are different from the ‘Life
Values and Principles’ covered in the previous section. A Life Principle is a principle
by which you would like to live your life and applies to your entire life. A goal is
expressed in terms of S.M.A.R.T. criteria and is something you would like to achieve.
Below is an example of a life principle and the associated life and financial goals:
Live Value: To be an open-minded person
Life Principle: To be a citizen of the world who is able to understand and empathise
with people from a wide variety of cultural backgrounds
Life Goal: Travel to 20 different countries by the time I am 40 years old
Financial Goal: Save $X,000 by the time I graduate so that I can go backpacking in
Europe for three months
One important goal that you should specify in this section (under an appropriate life
stage) are the funds that you require to achieve financial independence expressed in
today’s dollars (adjusted for inflation). The method for calculating this amount is
covered in Unit 2 of the course materials. You should show your working and explain
your assumptions. If you use a spreadsheet, you can include a screenshot of the
spreadsheet (or embed it) as an Appendix. However, please clearly cross-reference
the Appendix in the body of your financial plan so that I don’t miss it!
Unit 2 of the course material also describes how to calculate a savings plan to achieve
goals. You should generally avoid including these calculations in your ‘Life Goals’
section because they are better suited to the ‘3 Financial Strategy’ in the next section
of your plan. Establishing a savings plan is generally not a goal, it is a strategy used to
achieve a financial goal. The goal is the objective for which you are regularly saving
the money. The strategy is how you plan to save the money to achieve the objective.
One issue that you will face in any financial modelling that you undertake is that you
need to assume an average rate or return that any savings and investments will
achieve. In the formulas, this is denoted with the letter ‘r’. This is discussed in various
Units (especially Units 2, 3, 9 and 10). As a general principle, you should use a ‘real
expected rate of return’ in your calculations. The ‘real’ means that it should be adjusted
to remove the effects of future inflation in the cost of living (price inflation). If your
investments are expected to earn an average nominal return (including price inflation)
of 6% per annum and you expect inflation to be 2.5% per annum, the real expected
rate of return would be 6.0% – 2.5% = 3.5% per annum.
In Australia, inflation is expected to be somewhere between 2% to 3% per annum over
the long-term. Interest rates in savings accounts are normally expected to achieve
approximately 1% to 2% above the rate of inflation (although this is currently not the
case unfortunately due to historically low interest rates). Returns on property and
shares (including both price gains, dividends or rent) are normally expected to be
approximately 6.5% above inflation. The derivation of these numbers will be discussed
in more detail in Units 9 and 10. You are free to choose your own numbers here but
you should explain your reasoning if you deviate from the above numbers.
A special note in case you have absolutely no idea about what you will do after
graduation. Many students struggle with setting goals and strategies in this situation.
The approach taken by financial planners is to ask, “What is the most likely life path?”
and to base the plan around that. You can then ask, “What would be the best strategies
under various other life paths?”, and model each of those strategies separately.
However, you are only required to model only one life path in this assignment.
Your financial strategy is your ‘game plan’ for achieving your financial goals for each
your life stages. Your financial strategy may change (or grow in complexity) as you
progress through the course, so you will likely need to revisit this section after you have
completed each Unit to add more detail. Once you have completed Unit 2 of the course,
you should write a ‘rough draft’ of your overall strategy. You should then come back
and ‘improve this draft idea’ and/or add details as you build your financial intelligence
with each Unit of the course.
In the Unit 2 course material, I cover a ‘Mainstream Strategy’ (and the associated
problems) and also an alternative ‘Snowballing Strategy’. I would like to be very clear
that you do not need to use or follow the ‘Snowballing Strategy’. This strategy is only
provided as one possible strategy (amongst many) that financial advisors recommend
to some clients. It may not be appropriate for your current situation, life values,
principles and goals. You should modify the provided strategy to make it appropriate
for your own situation and goals or determine an entirely different strategy altogether.
It is important that you include some strategies for saving for key expenses and any
significant cash outflows. In the first section of your plan you identified a number of
future expenses. You should explain how you plan to save for these key future
expenses (using calculations and/or savings plans as necessary). If you need to save
for a deposit on a property, you need to explain how you plan to save for the deposit
needed on that property (usually is good to aim for a deposit of at least 10% of the
property value).
Please also note that the values used in Unit 2 are somewhat arbitrary and often use
rounded or very simplistic numbers (some of which may not be realistic for Sydney!).
You should make sure that you undertake your own research on appropriate prices for
properties (you will do this in later Units of the course). You should also undertake your
own modelling and calculations to estimate how long each stage will take. If you
undertake this modelling in a spreadsheet, you can easily update the numbers if you
decide to change your assumptions (or strategy) in future Units.
Please be specific in this section about the timing and details of each step in your
overall financial strategy. Better plans will also briefly explain how a strategy satisfies
or is consistent with life values and/or goals. Better quality submissions may also
attempt to visualise the steps (or stages) of your overall strategy using a diagram, flowchart or other means.
This section should apply the principles covered in Unit 3 to develop a long-term
strategy for building and maintaining financial independence. There are three
components that you should cover:
1. Overall description of the means by which you plan to achieve financial
independence. This would normally involve a quick recap of the financial strategy
covered in the previous section, highlighting the roles of regular saving, property,
retirements savings (superannuation), other investments, any plans to start (and
sell) your own business and intergenerational transfers of wealth (inheritance).
2. Detailed description of how you plan to use the Australian superannuation system
to build financial independence during the accumulation phase (usually below age
60) including any superannuation strategies.
3. Detailed description of how you plan to use the Australian superannuation system
to maintain financial independence during the payment phase (usually after the age
of 60) including any superannuation strategies.
To satisfy assessment requirements, you should assume that you will be living most
of your life in Australia, and so you should discuss your superannuation strategies
using the current Australian system. You should not base your strategies on the
fictitious country of Snowland used in the course materials or any other country.
This section should apply the principles covered in Unit 4 to describe your overall
career strategy across your life stages. I’m mindful that there is a LOT of material that
you could cover in this section, so I need to be clear that I’m only expecting one
paragraph on each of the following topics:
1. Labour market: Please provide a clear definition of the labour market in which you
plan to compete (the type of work, industry and geographic location).
2. Economic cycle: Briefly explain how an economic boom or recession is expected
to affect employment in your labour market. Is employment highly sensitive to the
state of the economy or relatively unrelated? Why? Identify the current phase of the
economy (boom, normal or recession) and how you believe that it is affecting
average income and employment levels.
3. Structural change: Briefly identify how structural change in the economy from
changing technology (fourth industrial revolution) and other factors (post-pandemic
economy) are expected to change average income and employment levels in your
industry over the next ten years. How will it change the nature of the work that you
expect to perform?
4. Values: Briefly explain how your chosen labour market and the associated work
aligns with your personal values and principles.
5. Personality: Briefly explain how the nature of the work in your chosen labour
market aligns to your personality.
6. Work styles: Briefly explain how the nature of the work in your chosen labour
market aligns to your preferred work styles and deeply embedded life interests.
7. Career goals: Briefly define some specific career goals for each of your life stages
in terms of the type of company for which you will work, the job role or position and
the expected income (in terms of current remuneration levels). This content can be
formatted in a table.
8. Career strategy: Briefly explain the specific steps that you plan to take to achieve
these career goals. This may involve pursuing specific workplace experiences,
developing new skills, regular mentoring, network building, active ‘marketing’ of
your skills via social media, additional part-time study (such as studying a Master
of Business Administration from UNSW’s AGSM MBA Program … yes … a
shameless cross-promotion there!). The content could be formatted as a bulletpointed list but try to be specific.
9. Risk analysis: Briefly identify and discuss some risks associated with achieving
your career goals, including an assessment of the likelihood of each risk occurring
(low, medium or high) and the negative impact of the event (low, medium or high).
Explain some steps that you can take to avoid or mitigate these risks. Explain some
steps that you can take to build resilience against risks that are incurred or are
unavoidable.
10.Career Action plan: What specific actions do you need to take in the short term
(less than 1 year), medium term (1 to 5 years) and long-term (5+ years)? This can
be covered as a bullet-point list.
As indicated earlier, I am only expecting one paragraph on each of these topics to keep
the scope of this section at a reasonable level!
This section should apply the principles covered in Unit 5 to develop your long-term
property strategy and your strategy to finance these properties using home or
investment property loans.
Your property strategy should apply the principles covered in the first half of Unit 5 to
develop a long-term property strategy, including the acquisition of your first property (if
you do not currently own one) and any subsequent properties.
Buying a property is an important step for creating wealth because it provides control
over living expenses over the long-term. It also allows you to buy an asset that is
expected to grow at a similar rate to income over the long-run using relatively low
interest-rate debt.
Better quality assignments will undertake some research using property websites
about the type of property (or properties) that you plan to purchase at each life stage.
Do you plan to live in it yourself or do you plan to rent it out while you live somewhere
else? Is it an apartment, town house or free-standing house? In what country, city and
suburb (or area) will it be located? Based on your research on property websites, how
much would it cost to buy a property like this right now? When do you plan to buy the
property? How much do you expect it to cost at the time of purchase (explaining your
assumptions)?
You should also consider your need for a dwelling over your various life stages. Do
you plan to own your own home during various life stages or rent? How will your need
for a home change over your different life stages? You should explain your reasoning
and try to link the content to your life values, principles and goals.
One problem that many students face is that the price of property in future years is
uncertain. Over the long-term, property prices tend to increase in line with average
incomes (assuming that increased demand is able to be satisfied by additional property
construction). In Australia, inflation is low right now, but the long-term average tends
to be between 2% and 3% per annum. Income growth is also low, but would be
expected to be around 2% to 3% per annum over the next 20 years based on
productivity growth. As a result, you would normally expect property prices to increase
by somewhere between 4% to 6% per annum over the long-run. In the short-run,
demand and supply factors will influence property prices. A recession would normally
be associated with a fall in property prices. In this course, financial calculations are
based on ‘real returns’ after adjusting for the effects of inflation. So if you expect
property prices to increase by an average of 5% per annum (halfway between 4% and
6%) and you expect inflation to be 2.5% (halfway between 2% and 3%), you would
assume that the ‘real’ increase in property prices in the long-run would be 5% – 2.5%
= 2.5% per annum. These concepts are covered in more detail in various Units of this
course.
This section should apply the principles covered in the second half of Unit 5 to develop
a strategy for borrowing money to buy your first property (if you currently do not own a
property) and any subsequent properties covered in your property strategy.
This section should be detailed and specific to your situation. Better quality
submissions will involve calculations and some basic financial modelling of loans
(however, please do not include loan repayment schedules over 300 months!). How
much will you need to borrow to buy the property (or properties) you discussed in the
previous section? What will be the monthly and annual mortgage repayments? Based
on your projected income in the last section, what proportion of your income will be
required to make these payments? Is this sustainable if interest rates were to increase
or you were to be temporarily unemployed?
If your life plan includes a long-term spouse or partner in the future (or currently have
one), you can assume that their income will also help to service the property loan.
Note that some students may prefer to avoid borrowing money and paying the
associated interest for religious reasons. As discussed under ‘Religion and Interest’ on
page 8, please base this section on a hypothetical person who is able to borrow money
and pay interest (perhaps using Islamic Banking).
Note that interest rates in Australia are currently at their lowest level in 30 years, so it
may not be wise to use those as your ‘expected’ future interest rate. If you are planning
on buying a property in Australia, it would be advisable to use a more ‘moderate’
interest rate for your home loan calculations, such as 6% per annum. This is more
likely to be a ‘mid-cycle’ interest rate given our new low-inflation world economic
environment that we are experiencing. If you are thinking of buying a property
overseas, you should do some research on home loan lending rates in that country.
This section should apply the principles covered in Unit 7 to develop a strategy for
protecting your finances and loved ones over your various life stages.
You should identify some key risks that you will face in each life stage, identifying both
the likelihood (low, medium, high) and impact (low, medium, high) of each risk. If other
sections of the plan included a risk-management section (such as ‘Career Strategy’,
you do not need to repeat the risks covered in that section. For each of these key risks,
you should very briefly explain how you plan to avoid, mitigate or otherwise manage
the risk.
You should briefly identify the appropriate types of life insurance that you will likely
need at each life stage. You should be specific here including details of the product
and levels of cover. Please briefly explain your reasoning and assumptions. Better
assignments will also include some basic product research to identify some possible
insurance products that you could use to satisfy your needs.
You should briefly identify the appropriate level of private health insurance cover that
you will likely need at each life stage providing a clear explanation of why that
insurance satisfies your needs. Best to include some product details, including levels
of cover and premiums.
You should briefly identify other types of insurance that you need at each life stage,
including motor vehicle and home and contents insurance. General insurance isn’t a
major section of this course and so you can keep this fairly brief.
This section should apply the principles covered towards the end of Unit 7 to develop
a brief estate planning strategy to protect your loved ones in the event of an untimely
death.
For each life stage, you should briefly explain how you plan to structure your will. Who
will you use to draft your will (will you be using a will kit, an online service or a solicitor)?
Who will be executor? Who will be the beneficiaries and how do you plan to distribute
your estate upon your death?
You should also consider what you would like to happen in the event of an accident or
illness that prevents you from making decisions for yourself over the long-run. Do you
plan to grant medical power of attorney or enduring power of attorney? Why? How?
This section should apply the principles covered in Unit 8 to explain your taxation
situation and strategies for each life stage. This will involve identifying the main sources
of assessable income and allowable deductions at each life stage and explaining the
taxation strategies that you plan to use at each life stage to pay ‘the right amount’ of
tax for your situation. Note that you do NOT need to estimate your tax at each life stage
in this section.
This section should be based on the Australian Taxation System under the assumption
that you will be living in Australia for most of your life. You should not base your
strategies on the fictitious country of Snowland used in the course materials.
This section should apply the principles covered in Units 9 and 10 to develop an
investment strategy for your savings and other financial assets at each of your life
stages.
How will you invest your various savings and investments? What is your asset
allocation at each life stage (or each step in your financial strategy)? Will you use
savings accounts, fixed interest products, shares, investment properties, managed
funds and/or exchange traded funds? What specific product(s) are most appropriate
to your current and expected future situation? Show evidence of some research here
and be specific! How are the products appropriate for your tolerance of risk at each life
stage and the associated investment time-horizon?
This section should include a specific list of tasks to implement your strategy with
deadline dates for each task to be achieved. This is like a one-page ‘task list’ with tick
boxes that you can put up on the refrigerator for implementing your chosen strategies
(like Microsoft’s free ‘To-Do’ application). This section may repeat some elements of
your various strategy sections and can be laid out using a bullet-point or check-box
format. However, the key difference is that the plan of action is a brief one-page task
list of things that you must do to implement your strategy (1 page) while the various
strategy sections provides detailed information about the strategies themselves.
One way to prevent the task list from become too complex (and long) is to be detailed
about the tasks that need to be done over the next 5 years or so and then get less
detailed as you get further out.
This page should include a list of references and websites that you have used to
support the research in your financial plan.
You generally do not need to reference me or the content in my slides and videos
(unless the course materials reference another source). You should generally be
referencing external research that you have undertaken.
For more information on the formatting of referencing, please refer to the section
‘Referencing’ on page 6.
You can include additional research or modelling that your have undertaken in
Appendices that would otherwise break the ‘flow’ of the main body of the assignment.
However, please avoid copying and pasting text from websites into an Appendix.
There should be cross-references to your appendices in the main body of your
assignment. There shouldn’t be any ‘orphaned’ appendices that just contain ‘dumps’
of information.
The maximum file size permitted by Moodle is 40MB. If your file is larger than this then
it is most likely because you have used some high-resolution images. Please locate
the super-high-res images in your document and downscale them. More on this here:
https://support.office.com/en-us/article/reduce-the-file-size-of-a-picture-in-microsoftoffice-8db7211c-d958-457c-babd-194109eb9535
Your financial plan should be submitted on the course website by the due date listed
on page 3. The link for submitting your plan is under the ‘Financial Plan’ section of the
course website.
The maximum file size of submissions is 40MB. If your file is too big, please decrease
the size of your images. Instructions for how to do this are in the previous section.
You can resubmit your assignment as many times as you like before the due date.
However, the TurnItIn Originality check is only performed once on the due date. You
can still submit your assignment on the link provided after the due date but a late
penalty will apply. Note that resubmissions on the course website after the due-date
are not possible. If you discover that you have submitted the incorrect file, you can
email the correct file to me (note that late penalties may apply).
Further information about the file name and formatting is available under the section
‘Document Format’ on page 5. The required file format is Microsoft Word because it is
much quicker for me to open and read these files than PDF documents.
The TurnItIn service has a ‘preview’ function for your uploaded document. This
preview isn’t very good and often stuffs up the formatting of your document. I wouldn’t
worry about this. I download the original Microsoft Word document file and mark this
directly and so formatting is rarely a problem (especially if you just use Arial/Helvetica
fonts).
For Mac users, please make sure that you only use the Helvetica font to avoid file
incompatibilities with Microsoft Windows.
If you are submitting your financial plan within one week after the due date, you should
just submit your financial plan on the course website. There is no need to email me.
The penalties for late submission are indicated under ‘Late penalties’ on page 3.
If you are submitting your financial plan more than one week after the due date, you
should both submit your financial plan on the course website and also notify me by
email at andrew.hingston@unsw.edu.au .
Your Final Results for this course will be made available to you by UNSW via the
myUNSW website a few weeks after the exam period ends. For more details on the
dates that your final results will be available and how to access them, please refer to
this website: https://student.unsw.edu.au/results
Your Financial Plan grade will be released on Moodle within 24 hours of the date that
UNSW releases your final grades for the course. You might be wondering why your
grade for the Financial Plan will be released after UNSW notifies you of your final
results for the course. This is because UNSW Assessment Policy stipulates that it must
be the university (and not me) that issues you with your final results. It also stipulates
that I am unable to provide you with your score on your final assessment (in this case,
the Financial Plan) until the university has notified you of these final results. Otherwise,
you could simply determine your final results by adding up your marks for each
assessment.
I know you have put in a lot of work into your assignment and would like to get detailed
feedback on the Financial Plan. My hands are a bit tied here due to Australian
Corporations Law and the associated implications for legal liability for the university.
Under Part 7 of the Corporations Act, providing you with written or verbal feedback on
your financial plan assignment may constitute personal financial advice. As an
employee of the University of New South Wales, I am not licensed to provide you with
financial advice relating to your financial plan assignment. The university is also not
willing to take on the liability associated with any associated feedback that may be
perceived as advice.
You should note that the grade that you receive for your financial plan is based on your
satisfaction of the assessment criteria of this assignment. The grade does not warrant
that the strategies or products that you have selected will be effective for achieving
your stated financial goals and objectives.
Your assignment will be assessed based on following criteria: Presentation & Style (30%)
Criteria Descriptor
CONFORMITY (10%) The file name and file type follows the assessment instructions.
The presentation of the content (document formatting etc.) follows the assessment instructions.
A table with the required information has been included on the title page (page 1)
A table of contents has been provided on page 2.
The standard headings for each section described in the assessment instructions have been used.
Referencing follows the assessment instructions.
CLARITY (10%) Ideas are clearly expressed.
Correct use of spelling, grammar and punctuation.
Use of clear and appropriate topic sentences at the beginning of paragraphs.
Appropriate use of bullet-points and prose where appropriate to the content.
Appropriate use of tables to summarise information.
A clear flow of ideas within sections (between paragraphs).
A clear flow of ideas across the entire document (between sections).
COMPELLING (10%) The content is interesting and engaging.
The formatting of the document is visually attractive and easy to read on-screen.
The length of the assignment strikes the appropriate balance between providing a detailed and
customised financial plan without boring the reader with trivial or irrelevant information.
Effective use of diagrams, graphs and pictures to visualise information and strategies.
Content (70%)
RESEARCH (20%) Use of secondary research (websites or articles) to support your financial strategies.
Detailed product research to support your financial strategies.
The evidence of secondary and product research is provided through clearly identified references.
Appraises a full set of different options, has significant original content, is lateral and adopts a wide array
of perspectives.
MODELLING (10%) Use of financial modelling and calculations to formulate your goals and objectives.
Explanation of financial modelling in your plan using spreadsheets and/or algebraic calculations.
Explanation and justification of key variables in financial modelling.
APPLICATION (40%) The theory from each Unit of the course is effectively utilised to analyse your situation and to develop
your strategies.
The financial plan avoids simply paraphrasing the course material.
Evidence of a deep understanding of the course material.
A high level of specificity on how to apply the theory in the course material to your current and expected
future situations, goals & objectives and your various strategies.
The application of theory demonstrates a high level of critical reasoning and logic.
The application of theory is novel and/or innovative.