• As there is a requirement of $105,000 for a security deposit, Liam is given an alternative recommendation that is to invest his savings of $23,000 with a regular deposit of $660 through growth managed fund at 6%. In this way, he will be able to gather sufficient funds by the end of 6 years to pay the security for his home loan. However, in the case of emergency he cannot access this accounts until the end of period.
• An alternative recommendation for this plan is that $23,500 must be invested separately for the collecting the amount for the security deposit of the home while $ 1,500 must be invested in another savings account so that the amount for the collection of holidays can be availed. In addition to it, …show more content…
The recommendations are useful as they are helpful in achieving the top priority objective within specified time. Another advantage of this strategy is that it will help in focusing securely the funds should be allocated to earn the desired amount for the deposit of the home loan.
• Depositing the monthly savings in a saving account can benefit Liam in ways like; he can earn a high rate of interest. Sometime the financial institutions will also offer some special deal such as bonus interest if Liam maintains the regular deposits in the saving account.
Disadvantages of strategy
• The biggest disadvantage with this strategy is that the amount can only be saved for a fixed three years. By saving the amount for three years will allow Liam to earn more than desired money. This strategy can also affect other goals of Liam.
• The choices proposal to accomplish this goal is that two distinctive accruing funds sparing must be finished.
• One is that Liam can invest $500 with a regular deposit of $500 for three years at 5%.
• Another suggestion is that he can deposit $100 as an initial deposit and can make general regular monthly deposit of $385 for 3 years at 5% loan fee to accomplish his …show more content…
• It is recommended that Liam should not opt for this type of insurance as he does not have any dependent to take benefit from this insurance policy. Also the policy holders may forgo some of the expenses for his current needs for the payment of the premiums
2. Total and permanent disability (TPD) insurance
• It is recommended that Liam should go for this insurance policy with any occupation outside superannuation. His main concern is to cover himself in the case of injury or illness, therefore, it is advised that he should go for it.
3. Income protection (IP) insurance
• It is recommended that he should not go for Income Protection policy at least at this stage. Liam has already got himself insured in the total and permanent disability insurance and paying premiums for that policy and which fulfils the need of insurance against the case of any injury or illness. Thus it is advisable to him to not to go with this insurance policy