rightAs a recent graduate of business school, you know the importance of being able to not only make a dollar, but to stretch one dollar into two. After years of toiling at the feet of master money managers, you have decided to strike out on your own and open your own financial management consulting firm. Your plan is to offer a variety of financial advice, ranging from stocks and bonds to the ever-popular mutual funds. As you are well aware, the only way for you to make money is for your clients to make money. With every client comes two important decisions, their decision to trust you with their money and your decision to trust yourself with their money. No matter how you look at it, you have just got to make good decisions.

Teacher Notes

Monday morning finds you a little groggy as you try and leave the weekend behind and get on with your first week on your own. As you read the morning paper, you inadvertently turn to the obituary section where you read of Bob Jones, young business executive not unlike yourself, who lost his life in an untimely boating accident. He has left behind a young wife, Mary Jones and three young children. You shake your head and begin to wonder how this young mother will be able to provide for the children and give them the same opportunities they would have had if their father had not died. Just then the phone rings, and as luck would have it, Mary Jones is on the phone seeking your advice. She remarks that she got your name from a friend of a friend. After all the pleasantries are finished she begins to tell you her story. She is up to her neck in bills and has a heavy mortgage to boot. Fortunately her husband had a large life insurance policy ($500K) and the check should be arriving any day. She wants to know how she should invest it. Here is the scary part. Mrs. Jones wants you to invest it for her.

Being a good financial counselor, you ask some more probing questions and find these answers.

The Task

It is your job to patch up this sinking ship so Mrs. Jones and her young kids won't drown in a sea of debt. As a good financial analyst, you know that in order to do this you must examine her whole situation. Basically you must make $500,000 to:

In order to accomplish this you will have to make some very wise decisions and recommendations for leading her out of her financial difficulty. Be prepared to give your findings to your client in an oral presentation and a written summary detailing the investment decisions you have made on her behalf.

The Process

In either a group or as an individual, you are going to prepare a financial plan for your client and her children. In order to accomplish this, you need to do a vast amount of research regarding an efficient, risk-free plan allowing her financial goals to be met. If you are working in a group, divide the research into topics such as:

Keep in mind it is your job to invest her money, reduce her debt, provide for a college fund and provide a monthly income. How you go about doing this and the services you provide are uniquely yours and yours alone. As an independent financial consultant, it is up to you to come up with the best monetary policy for your client.


You will find a wealth of financial information on the Internet related to your goals and objectives. A few reminders and hints are in order when evaluating financial information found on the Internet:

  1. 1. Consider the source
    • who are they?
    • how long have they been in business?
    • what do they sell?
  2. Past performance does not guarantee a successful future.
  3. A fool and his money are soon parted

Personal Finance by Quicken
Edgar Database of Corporate Information
Insurance and Retirement Planning
Investing 101 from About.com
Treasury Certificates

Learning Advice

In the case of financial planning the sum is definitely greater than the parts. Each piece of a financial plan should fit well with the next. The old adage your grandparents told you about putting all your eggs in one basket is pretty sound advice. You need to lessen your client's exposure to risk while at the same time increasing her net worth. When you have completed your plan, be prepared to present it to your client both orally and on paper. Also, remember that she will probably need help understanding it all, so be prepared to explain all, your decisions.


You will be assessed on the thoroughness of your research and the plausibility of your financial plan. While there is no way to predict the future, your past research and presentation should provide a sound path for the future.


Answer the questions provided as another form of evaluation.

David R. Mac Donald
Fillmore Middle School
Fillmore USD

 Technical questions on the website to: hoa_nguyen@sbcss.k12.ca.us

Last Revised: Wed, Mar 22, 2006