Individual Assignment Muhammad Atiq 2020165909
Individual Assignment Muhammad Atiq 2020165909
Individual Assignment Muhammad Atiq 2020165909
MANAGEMENT
UNIVERSITI TEKNOLOGI MARA SHAH
ALAM
BACHELOR OF BUSINESS
ADMINISTRATION (HONS) HRM
INDIVIDUAL ASSIGNMENT: FAMILY’S
FINANCIAL PLANNING
ID NUMBER : 2020165909
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BIODATA OF FAMILY
Encik Abdul Latif is 62 years old. He is married with 5 kids. His wife, Puan Samiah is
a fulltime housewife. He works as a Consultant in a construction company and earns
about RM 10,000 every month. He opted for 11% deduction on the EPF contribution
and pay 3% in tax. He owns a house in Subang Jaya and drives a Mercedes. Currently
he lives with his wife and one of his daughter which is working and also bought a
Perodua Myvi for her. He is also taking care of his one and only granddaughter. Encik
Abdul Latif is my father and I am happy to be his financial planner.
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ITEMS RM
Monthly Salary 10000
Balance in savings account 50000
Cash in hand 300
TNB accrued balance 400
Air Selangor accrued balance 200
Savings at Maybank as at 31st December 2020 12000
ASB 5000
Housing loan balance 20000
Mercedes (market value) 80000
Perodua Myvi (market value) 45000
Double-storey house 550000
Purchase smartphone in October 2020 5000
Household furnishing (current value) 3500
Apple MacBook Air 5000
Groceries per month 600
Electricity bill per month 200
Water supply bill per month 100
Celcom bill per month 140
Household items per month 300
Fuel expenses per month 600
Touch n Go reload per month 200
Mercedes maintenance 4900
Housing instalment per month 1666.67
Medical insurance per month 450
Kindergarten fees per month (granddaughter) 410
Bought toys for granddaughter 120
Automobile insurance 175
Life insurance per month 150
Clothing expenses 435
EPF monthly contribution 1100
Annual zakat 1500
Income tax per month 300
Monthly daughter allowance 300
Wife allowance 1700
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MONTHLY EXPENSES
Table below shows Encik Abdul Latif’s monthly expenses as at 31st December 2021.
JAN FEB MAR APR MAY JUNE JULY AUG SEPT OCT NOV DEC
MONTHLY EXPENSES
RM RM RM RM RM RM RM RM RM RM RM RM
GROCERIES 600 600 600 600 600 600 600 600 600 600 600 600
ELECTRICITY BILL 200 200 200 200 200 200 200 200 200 200 200 200
WATER SUPPLY BILL 100 100 100 100 100 100 100 100 100 100 100 100
CELCOM BILL 140 140 140 140 140 140 140 140 140 140 140 140
HOUSEHOLD ITEM 300 300 300 300 300 300 300 300 300 300 300 300
FUEL EXPENSES 600 600 600 600 600 600 600 600 600 600 600 600
TOUCH N GO 200 200 200 200 200 200 200 200 200 200 200 200
MERCEDES MAINTENANCE 1600 800 500 2000
HOUSING INSTALLMENT 1666.67 1666.67 1666.67 1666.67 1666.67 1666.67 1666.67 1666.67 1666.67 1666.67 1666.67 1666.67
MEDICAL INSURANCE 450 450 450 450 450 450 450 450 450 450 450 450
SAMSUNG S20 5000
APPLE MACBOOK AIR 5000
KINDERGARTEN FEES 410 410 410 410 410 410 410 410 410 410 410 410
TOYS 40 40 40
AUTOMOBILE INSURANCE 175 175 175 175 175 175 175 175 175 175 175 175
LIFE INSURANCE 150 150 150 150 150 150 150 150 150 150 150 150
CLOTHING 200 100 135
EPF CONTRIBUTION 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100
ZAKAT 1500
INCOME TAX 300 300 300 300 300 300 300 300 300 300 300 300
DAUGHTER’S ALLOWANCE 300 300 300 300 300 300 300 300 300 300 300 300
WIFE’S ALLOWANCE 1700 1700 1700 1700 1700 1700 1700 1700 1700 1700 1700 1700
TOTAL MONTHLY
EXPENSES 8631.67 8391.67 9991.67 8431.67 9291.67 8391.67 8431.67 8891.67 8391.67 15526.67 13391.67 9891.67
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BALANCE SHEET
INVESTMENT ASSETS
MAYBANK BANK ACCOUNT 12000
ASB 5000
TOTAL INVESTMENT ASSETS 17000
5
CASH FLOW STATEMENT
EXPENSES
Apple Macbook Air 5,000
Samsung S20 5,000
Groceries (600 X 12) 7,200
Electricity bill (200 X 12) 2,400
Water supply bill (100 X 12) 1,200
Celcom bill (140 X 12) 1,680
Household item (300 X 12) 3,600
Fuel expenses (600 X 12) 7,200
Touch n Go (200 X 12) 2,400
Mercedes maintenance 4,900
Housing instalment (1666.67 X 12) 20,000.04
Medical insurance (450 X 12) 5,400
Life insurance (150 X 12) 1,800
Kindergarten fees (410 X 12) 4,920
Toys 120
Automobile insurance (175 X 12) 2,100
Clothing 435
EPF contribution (10,000 X 11% X 12) 13,200
Zakat 1,500
Income tax (10,000 X 3% X 12) 3,600
Wife allowance (1,700 X 12) 20,400
Daughter allowance (300 X 12) 3,600
TOTAL EXPENSES 117,655
CONTRIBUTION TO SAVINGS 2,345
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RATIOS
2. Current ratio
Current ratio :
Liquid assets / current liabilities =
50300 / 600 = 83.833
Current ratio shows high liquidity
position. Encik Abdul Latif has high
liquidity position and able to pay short
term obligation he has.
3. Debt ratio
Debt ratio :
Total liabilities / total assets X 100 =
(20600 / 755800) X 100 = 2.7%
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INCOME TAX
Less : Relief
EPF (1100 X 12) 13200
Life insurance (150 X 12) 1800
Medical insurance (450 X 12) 5400
Samsung S20 5000
Apple MacBook Air 5000
Total Relief 30400
Total Chargeable Income 89,600
Less : Rebates
Zakat 1,500
Total Rebates 1,500
Total Taxable Income 7,216
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COMMENT AND ADVICE
Based on the balance sheet, financial situation of Encik Abdul Latif is effective
because he has the allocation to investments as the assets are high enough to offset
the liabilities where the total assets are RM 755,800 and total liabilities is RM 20,600.
It is also not a big issue for him to settle his existing obligations based on the fractions
of ratios. In the future, Encik Abdul Latif can pay off his long-term debt easily if he
spends more to raise money. Thus, the net worth RM 735,200 represents true
indicator of his resources and it is a very good starting point for the creation of his
financial strategy.
Insurance planning is also a vital part of a structured financial package that involve
risk assessment and the determination of having adequate insurance coverage to
minimize such risk. The primary purpose of insurance preparation is to recognize and
evaluate life-threatening risk factors and to obtain proper compensation, hence will
ensure a peace of mind in case if there is any unwanted tragedy occurs and this can
be seen through the policies he have which is medical insurance and also life
insurance. The sum paid by Encik Abdul Latif for both policies is RM 7,200. In addition,
investment planning is a very detailed part of financial plan that describes an
investment policy to help him achieve long-term and short-term targets, such as
retirement or home purchase.
Besides that, pension planning is the method of deciding the targets for his retirement
income, activities and also decisions to meet those objectives. Encik Abdul Latif should
track his pre-retirement savings. Money requires 5-10 years to grow and this is the
most insecure part as over-expenditure could ruin the plan. It is hard to recover once
money is wasted. On his estate planning, it includes deciding how the property of a
person should be handled or dispersed following death of if they become disabled.
The physical properties include the double-storey house, his car and other personal
belongings.
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PANDEMIC COVID-19
During the pandemic, almost everyone is badly affected in terms of financial and also
mental health. Luckily, Encik Abdul Latif is not highly affected except for the part where
he and the family have to spend extra on the sanitizers and also face masks. They
took the necessary precautions steps in order to avoid from being infected with the
disease.
RECOMMENDATIONS
Encik Abdul Latif’s financial conditions is not that bad as his commitments is not that
high. He is only supporting his wife at the moment and spending a bit on his own
granddaughter and shouldn’t be a problem for him because his daughter is also
working. Maybe Encik Abdul Latif can just focus on growing more money where he
could actually invest more in property, gold or more kind of investments. Trading is
also an option if he considers learning it.
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REFERENCES
https://stockquantum.com/what-is-financial-planning/
2. https://prezi.com/jh74odlmfb7n/fin-533/
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