精编财务管理分析个人财务与投资分析

1、随心编辑,值得下载拥有!YOUR COMPA NY NAME IS HERE专业I专注I精心I卓越【财务管理分析】个人财务与投资分析Suggestions on Andrews investment1. IntroductionTo have comfortable life, it is important for one to earn more, but no less is the right management of money, as acclaimed by Carlos (2009). Andrew is facing the problem of managing his

2、money effectively, so this report is written to give him some suggestions. Before writing, the work of referring to the introduction of his situation and the checking of the internet for information of proper financial products and services has been done carefully.As was written to illustrate the fa

3、ct that how to schedule your finance and how to invest efficiently, this report is not only fit Andrew very well but will also be helpful for someone who is unfamiliar with financial services and products but want to manage their wealth more efficiency.The report firstly analyzed the financial struc

4、ture of Andrew; in addition,It worked out the future financial needs of Andrew; then, It checked to find proper financial products or services mainly by internet; and finally, It come up with a conclusion which includes a series of financial products and services that fits Andrew well, also It helpe

5、d him on how to deal with it effectively.2. Analysis of financial services2.1 Current financial structure of AndrewTable 1. An drews finan cial structureForm table 1 we can clearly know what An drew has and how much arethey to in vestme nt. The calculati on of his assets and net in come in detailis

6、as followi ng:As he has buy a personal pension for five years, and he does currentlypay 6% of his gross salary into it, so in total he has put $14400 into thepers onal pension schedule.According to the Tax relief on personal pensions, he ends up to have$ 18000 in his pen sion pot.His assets include

7、some ordinary shares of three companies,money inbank accounts and a flat.The number of ordinary shares is as following:AberdeenAsset30,000ManagementPrudential6,000Royal Bank of Scotland60,000Money in his current account is 1,800and in his easy-access savings account is 5,000 The flat is a 2-bedroom

8、flat near the centre of Edinburgh.His debt is the mortgage of his flat to pay in five years.He may pay tax include income tax and tax on saves and investments.According to the rule from the website of UK (2011), to calculate his tax on income, we should firstly calculate out the taxable income which

9、 is gross income of salaries and investment; then less debt and pension contributions,and lastly to find the right basic rate to do the finalcalculation. The process of calculation is illustrated as following, Andrew and calculates it out by himself with further information on his financial conditio

10、n. He can also search for online help by visiting the website ofHMRC Online Services.Taxable In come 48,000Less Pers onal Allowa nee 3,600Less Pension Con tributi onsIn come tax chargeable onBasic Rate at the fittest levelTax payable =Tax rate on earnings by differe nt way or on differe nt finan cia

11、l productsare usually different from each other. Any interest earned (on savings accounts, certain types of OEIC etc.) is usually taxed at 20%, while in vestme nt in come in the form of divide nds from compa ny shares, for example, is only taxed at 10% (Arthur, 2009). When he sell his assets, such a

12、s his flat or his ordinary shares he has to pay for a Capital Gain Tax at the tax rate of 18%.His in come in cludes his after-tax salary, divide nds and in terests from his banking account. But more attention should be pay on about his net in come or to say the cash flow he can moister to inv est. H

13、e has $500 per month left over from his salary that he can save or in vest elsewhere, so it add up to $6000 every year he can collect to save or inv est elsewhere, this is his net in come via his salary. He can also receive some divide nds by his ordinary share though stocks he own and interests tho

14、ugh hiscurrent account and easy-access savings account. Interests of his current account and his easy-access savings account are various from different banks and time to time, but Andrew and easily find them from the website of the government of UK.2.2 future financial ambitions of AndrewHe wishes t

15、o use the funds he has available to travel the world for at leasttwo years when he retires, so the investment terms supposed to be totally 10-12 years and of course he suppose the much reward the better.He has to pay for mortgage for his flat in the next five years, so he shouldbe clarify in the fir

16、st 5 years while in the last 5 to 7 years. In the last 5 to 7 years he can invest into some financial products which is more risky besides remains some money for his living. After backing from his travel around the world, Andrew has to plan for his rest life, as he has to have a flat to live in, but

17、 do not need one after his death, I suggest him using Reverse Annuity of Real Estate and life insurance.So this report suggests him to divide his investment term into three. The first one is his first five years, the second one is his other 5 to 7 years, and the third one is from his back of travel

18、to his death.2.3 Range of products available to AndrewThe financial sector includes banks, insurance companies, finance houses, investment trusts, fund managers, the stock exchange and so on. They provide many financing tools include investor shares, bonds, and warrants and so on. As he has no obvio

19、us inclines that all these financial products and their portfolios can be available to Andrew.Information in details of financial products whichmay fit Andrewis asfollowing,Pensions:Pensions are designed to provide regular income for people when theyretired. Blackburn (2007) had discussed a global p

20、ension plan which includes a various kinds of pensions which suggested that There are really many different types of pensions, and they are traditionally been managed by pension funds and insurance.Now, let us practice to findhow the tax relief on personal pensions works: if Andrew put 80 pound in t

21、o his personal pension schedule, he can ends up with the right to claim that he can get 100 pound in his pension pot. That is to say the investor of the pension can claim tax back from the government at the basic rate of 20%.To check whether you can get a state pension, you can find more information

22、 in details by the website of UK government. You can also find information on personal pension investment there. You can buy pensions though two ways: getting one through your job, or setting upyour own. Also, you can choose both.Reverse Annuity of Real Estate:It is a financial product mainly design

23、ed for retire persons. It works in the following way: when a person retires, he can get a payment from the bank for a certain year, or until his death. Then in the final of the term, or when the investor dies, the bank will get the real estate.Life insurance is the most important way to deal with un

24、certain situations, especially for old people who are really easy to be ill. Also it fits Andrew well when he having the travel all over the world. He can get information easily from the insurance companies or online services of insurance institutions.Suitable tax-free products include: fixed rates

25、fund and premium bands of banks and ISAs and National Savings & other Investments. They are always serve by the bank, or have close relationship with the government. They are always financial products with low risk and low reward.As the very fast development of financial products, now days just like

26、 Baddepudi (2007) comes up with, other important financial products such as ITs, UTs and OEICs are playing a more and more important role in the portfolio.IT here is short for investment Trust which is a public limited company to sell its assets by shares in the secondary market, it mostly used in t

27、he UK.ITs are close-ended fund. In fact IT is not in fact atrustbut a separatelegal person or a company in the sense of law. It operates and trades like any other quoted company. People hold it by shares which are traded in the secondary market and the share price is determined by supply and demand

28、monthly. It has low risk but high reward when compared with UTs and OEICs.UT is the abbreviation of Unit Trust which is equal to Unit Investment Trust. In fact, UT is a Trust which broken down a portfolio which includes lots of money into unit, this is where the differences lies between UT and mutua

29、l fund, according to Sharpe (1996). It is sold by unit and it is easy and cheap to trade. For its average risk is equal to the portfolio it comes from which is low, its reward is also low.The management company plays a very important role for a unit trust to be successful. The management company get

30、s shares form companies and they put them together to form a capital pool, then they create UTs by divided the capital pool into unit. The management company burdens the responsibility to advertising and selling the UTs, and they make money by selling UTs. There are lots types of UTs, among which th

31、e most common are cash equivalents, property, mortgages and securities. Expenses for investing UTs include operating expenses and sales charges and entrance or exit fees. The operating expenses of UTs are low because they are not buying or selling by shares. But different from many other financial p

32、roducts namely ITs or OElCs, UTs always has a sale charges and entrance or exit fees. It is also called participate Trusts for both the investor and the owner of the capital of unit trusts shares the rewards and risks.OEIC is equal to its full name-Open-EndedInvestmentCompany. Itoperates and trades

33、by shares like IT, but it is an open company. It is also trades like a stock. The shares of OEIC of a certa in compa ny are listed and traded by the London Stock Exchange, and how the price of the Open-EndedInvestmentCompanyis same when compared with astock its price formed by bide of sellers and bu

34、yers, and its price cha nges from day to day mainly decided by the supply and dema nd.To compare ITs, UTs and OEICs in detail, the followingtable can bestillustrate it.ITsUTsOEICsTypesCompa nyTrustCompa nyDegreeofopennessClosedClosedOpe nShare holdSharesUnitsSharesSecon dary marketYesNoNoValuati on

35、freque ncyMon thlyDailyDailyLegal positi onLowHighLowRiskLowLowHighRewardHighLowHighTable2.The features and differe nces among ITs . UTs and OElCs.2.3 To an alysis reward of differe nt products or product portfolioTo sum up, The financial products should be classified into four baskets.The first one

36、 is products which are in low risk and low reward: fixed-rated fund and premium ban ds, UTs. The sec ond one is products which are in high risk and high reward, like ITs, OEICs. The third one is pension which is tax-efficient. The forth one is Reverse Annuity of Real Estate. And also I will suggest

37、him to buy the life in sura nce to deal with un certa in3. Suggesti ons on his inv estme ntAccord ingto Abul (2011), to have a susta in able and successfulinvestment, the investor should do not put all the eggs in one basket which means that he should buy both sav ing and inv estme nt products and d

38、o not inv est in one go, which means that he should try to avoid the market risk.3.1 Suggesti ons on in vestme nt products and ratios for An drew.In term one the first 5 years, put his interests and dividends in tax-free account, get 40% of his cash into pension, 40% into UTs and 20% into ITs. Take

39、attention of the operation of the companies he invested and put some of his current bound into investment, the investment method can follow the ratio above.In term two the rest 5 to 7 years, get out of all money in his tax-free account, and put them into OEICs, still put his interests and dividends

40、in tax-free account, get 20% of his cash into pension, 20% UTs, 30% into OEICs, and 30% into ITs. Also take attention of the operation of the companies he invested and put some of his current bound into investment, the investment method can follow the ratio above.In term three time since his travel

41、all over the world. Before starting the travel, he should sell his flat and put the money reward into life insurance, when back from the worldwide travel, he should buy a smaller flat (an one-bedroom apartment is better) and invest this flat into Reverse Annuity of Real Estate.3.2 How can he get the

42、se financial products and how can he operate to invest.Online attention of investors are important and efficiency now days, suggested by Bowden (2011). To get a personal pension schedule, by searching the website of the UK government to find information on details is the most efficient method.To buy

43、 tax-free financial products, he can use online banking for serves,he can also choose to go to the bank.To know and trade ITs, he can research for or surf the products though a fund supermarket.To invest in UTs, he can get information and buy the financial products though manage company.To invest in

44、 OEICs, he can get information of certain company by searching for the website of that company and he can trade on the London Stock Exchange.To invest in life insurance, he can find details in insurance companies and their online services.For Reverse Annuity of Real Estate, he can know more from the

45、 websiteof the government of UK by click into serve for the retirement.3.3 The costs of financial products recommended to him.Costs of different financial products mainly include three parts. They aretrade costs which mainly refer to operation costs, maintaining costs which mainly refer to property

46、tax and capital gain tax.Costs to different products are in great difference, pensions have a tax relief, so they are tax advantaged, but the government give out a cap for tax relief of pensions; tax-free products nearly need any costs; and ITs,UTs, OEICs, Real Estate and Insurance need higher costs

47、 to invest.Her Majestys Revenue and Customs (HMRC) have embraced information technology in that individuals who are required to fill in a tax return can now do so online. You can find more information in their website.3.4 How can he monitor all the financial products by computer?He should care more

48、about the daily operation of the companies he invested in, according to Olha (2010), he should also read about the regulations and rules ofthe operation of invest in EU, finally he shoulddo more online trade to save time and trade fees.Check his investment and try to find whether it is ok, or whethe

49、r there are better choice or financial products to invest in. update his investment ratio when necessary.As to Grundamann (2008), finance services and contract law develops quickly. He should not only, care about laws and regulations of the financial products he had buy, but also take attention on the update of the laws and regulations relevant.Citizens services in the website of the govern