Project 3: Investments & Completing Your Financial Plan

During last assignment, you did such an amazing job with Frank finances, that he is retaining you as his financial consultant. Thanks to you, Frank financial house is in excellent order. He is utilizing his monthly cash flow plan, and all of his debts have been paid off, except for a house, which he recently purchased with a mortgage, and he has established a very healthy emergency fund to help handle unexpected events in the future. Frank is in the position to set aside $400/month for investing purposes. Of course, he has absolutely no idea how to proceed, and is turning to you for your outstanding knowledge in this area.

  1. One of the first things Frank should understand about investing money is the concept of risk.
    • ï‚•  Explain in detail the five components of the risk factor.
    • ï‚•  Outline a strategy of the factors that reduce investment risk.
  2. Some co-workers of Frank are constantly talking about the stocks that they buy and sell on a weekly basis, and Frank is very overwhelmed at the amount of stock transactions that his friends go through during a given week. Frank feels that he will have trouble making the decision to buy or sell a certain stock.

ï‚• Give Frank some suggestions that can reduce his anxiety when he makes stock investment decisions.

3. This information has been a great help for Frank—you are good! Frank now needs an investment strategy for the stocks that he will purchase.

ï‚• Provide Frank an analysis of both a long-term and a short-term investment strategy for his stocks.

4. Now that Frank has an investment strategy for his purchased stocks, he is interested in including some bonds in his investment portfolio. The problem that Frank is incurring is that he has absolutely no idea what type bonds there are.

ï‚• Explain to Frank what type of bonds that he could utilize for his investment portfolio.

  1. Last week while having lunch, a friend of Frank’s told him that all her investment money goes into to mutual funds. Frank just about fainted when he had no idea what she was talking about and realized that he had so much more to learn in the field investment vehicles.
    • ï‚•  Explain to Frank the concept of a mutual fund.
    • ï‚•  Explain to Frank the characteristics of mutual funds.
  2. Great work. Now Frank has a much better understanding of mutual funds. While visiting with the human resource director of his company, Frank understands that he can choose a variety of different types mutual funds for his 401K portfolio. Frank just sent you a text needing the following information:
    • ï‚•  Explain to Frank the major fund categories that he can invest his 401K.
    • ï‚•  Choose three types of categories that would you would suggest he invest as he begins this
  3. Once again, your financial advice has been a most excellent resource for our friend Frank. He loves his home that he recently purchased, and is wondering if real estate would be a good investment vehicle to include in his overall portfolio.

ï‚• Explain to Frank both the advantages and disadvantages of real estate investments.



Well, you have really been an amazing personal financial planner for our friend Frank, and his life is reaping the rewards of your incredible knowledge of this subject. Frank has purchased a lovely home, owns two nice automobiles, paid off thanks to your wisdom, has received a promotion at work as a senior computer programmer/gamer, ($87,000/year salary), and started a small online gamming consulting business on the side. He married his childhood girlfriend, and they are expecting their first child by year’s end. Way to go Frank!

It is now time to complete Frank financial plan with insurance, retirement, and estate planning.

  1. With all of the recent changes in Frank life, he needs to include items in his financial plan that he never had to think about when he was young, beautiful, and single. He needs to reduce the level of risk against possible financial loss.
    • ï‚•  Outline and explain for Frank, the four Risk Management Methods that he can utilize to reduce his risk against financial loss
    • ï‚•  Which method do you suggest that Frank pursue?
  2. Frank is still a young man, and his company has agreed to match his 401K retirement plan @ 100% up to $10,000 per year. That sounds really great to Frank, (that is an amazing deal by the way), however; he wanted to purchase a $10,000 bass boat this year and will think about retirement at some point later in the future.
    • ï‚•  Convince Frank of the importance of starting retirement funding early in life.
    • ï‚•  How would you Convince Frank to contribute to the company’s 100% match of his
      401K plan? ($10,000)
    • ï‚•  If Frank only contributes $2,000 to his 401K plan, how much money (philosophically speaking) is he giving back to his company?
      10. Well your persuasion worked, and Frank is utilizing the company retirement plan to the maximum benefit. You got Frank so pumped up that he now wants to open up an Individual Retirement Account or IRA. There are many different types of IRAs to choose from, but Frank has narrowed it down to two.
    • ï‚•  Explain to Frank the differences between a Traditional IRA and a Roth IRA.
    • ï‚•  Which one would you advise Frank to invest in?
    • ï‚•  What is the maximum that Frank can invest in an IRA during a calendar year?

11. One last question for our good friend. Frank, like 70% of Americans, does not have a will. Again, he thinks he is young and estate planning is something to do much later in life.

  • ï‚•  Convince Frank of the importance of estate planning and the need to have a will.
  • ï‚•  How does Frank go about getting a will?
  • ï‚•  As a computer programmer/gamer, Frank has a huge online presence. He has a website

that generates income, updates his Facebook & Instagram page on a daily basis, blogs about game development, and maintains his Linked-in, and eBay sites regularly.

ï‚• Explain to Frank the type of will he should make to protect his online content that he created.


  • ï‚•  To receive full credit for this project, you should explain each answer in detail. Use your
    textbook, notes and Internet research to complete this project.
  • ï‚•  Value for this project is 200 points
  • ï‚•  This Project should be a minimum of 1,200 words (not including the repetition of the question or references). Each question must be answered for full-credit.
  • ï‚•  Number and/or provide a brief heading. Please do not copy the questions and paste them in your work. I will simply delete the wording of the question to attain an accurate word count.
  • ï‚•  Document should be sent in Microsoft Word Format or PDF file
  • ï‚•  Include a title page that includes your name and title of project
  • ï‚•  Save your project with your name in the file name.

o Example: petra ray Project 3 Investments would be my filename Review the


ï‚• If you will answer three questions per week, you can easily finish this project stress-free by the due date!

Check your Course Organizer for the due date

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