In this paper, I will evaluate Alice’s goals by using the S.M.A.R.T. planning model and information which are introduced in the book Personal Finance by Rachel Siegel and Carol Yacht, Chapter 1 (2009).
Evaluation has to be done on following:
a. Pay off student loan
b. Buy a house and save for children’s education
c. Accumulate assets
d. Retire
e. Travel around the world in a sailboat
EVALUATION
a. Pay off student loan
Alice has a significant debt obligation – Student loan of $53,000; $7,720 annually; which she will be able to pay in next seven (7) years if her Annual after-tax income is now $35,720 minus all her other obligation to be paid.
If Alice wants to reduce this debt she has the options to find a second job (part-time) which I …show more content…
Retire
For the retire, Alice should be having enough assets from her long-term goals. Also, she should be thinking about individual saving account for retirement. If she buys the house in age around 35 with a mortgage for 25 years, will have children who will be able to study thanks to her long-term saving she should be okay in her retire age. Of course, everything depends on many factors as her health, job situation, family, etc.
e. Travel around the world in a sailboat
In a current Alice’s situation, I don’t see her traveling in retirement very optimistic.
She must generate a surplus income to do it. Probably with the financial support of her husband and kids she will be able to travel with them, and her dream comes true.
If she has S.M.A.R.T goals and knows what she wants for the future, then she has to make an effort for it. As in the book of Personal Finance says: “to be truly useful goals must be Specific, Measurable, Attainable, Realistic, and Timely (S.M.A.R.T.). Goals change over time, and certainly over a lifetime. Whatever your goals, however, life is complicated and risky, and having a plan and a method to reach your goals increases the odds of doing so” (Siegel, R., Yacht, C., 2009, p. 18).
Evaluation has to be done on following:
a. Pay off student loan
b. Buy a house and save for children’s education
c. Accumulate assets
d. Retire
e. Travel around the world in a sailboat
EVALUATION
a. Pay off student loan
Alice has a significant debt obligation – Student loan of $53,000; $7,720 annually; which she will be able to pay in next seven (7) years if her Annual after-tax income is now $35,720 minus all her other obligation to be paid.
If Alice wants to reduce this debt she has the options to find a second job (part-time) which I …show more content…
Retire
For the retire, Alice should be having enough assets from her long-term goals. Also, she should be thinking about individual saving account for retirement. If she buys the house in age around 35 with a mortgage for 25 years, will have children who will be able to study thanks to her long-term saving she should be okay in her retire age. Of course, everything depends on many factors as her health, job situation, family, etc.
e. Travel around the world in a sailboat
In a current Alice’s situation, I don’t see her traveling in retirement very optimistic.
She must generate a surplus income to do it. Probably with the financial support of her husband and kids she will be able to travel with them, and her dream comes true.
If she has S.M.A.R.T goals and knows what she wants for the future, then she has to make an effort for it. As in the book of Personal Finance says: “to be truly useful goals must be Specific, Measurable, Attainable, Realistic, and Timely (S.M.A.R.T.). Goals change over time, and certainly over a lifetime. Whatever your goals, however, life is complicated and risky, and having a plan and a method to reach your goals increases the odds of doing so” (Siegel, R., Yacht, C., 2009, p. 18).