This is a research paper offering an investment proposal that also explains and describes the various opportunities available to a person namely Beatrix. Beatrix is one of the three children of Mr. Jones who died. Like the other two children of Mr. Jones, Beatrix also received inheritance money of £200,000. This paper gives investment advice to Beatrix for wisely investing the money received as an inheritance. The paper is developed in such a way that, it is advisable for the client namely Beatrix by a consultant.
While making an investment decision, if it is not done wisely, it may affect the future financial position of the individual in the case of personal investment and the organisation in the case of organizations. Here, in the case of Beatrix, well-considered advice should be of help to her in taking a wise financial decision.
Background Information of Beatrix
Beatrix is one of the three children of Mr. Jones. She is 57 years old and the wife of Karl who is 59 years old. Both of them live in Munich, Germany. Beatrix is a part-time personal assistant. Her annual income is between €15,000 and $30,000. This is considered to be a standard income which is enough for leading a fairly good life. Beatrix’s husband Karl is the purchase manager in a small manufacturing company. The annual income of Karl is €55,000 a year. They have got three children and all of them are settled and living separately. This means that the children are no more dependants on their parents. The youngest of the three children completed a university degree last July. Each of the three is into good employment and all of them are living happily. Beatrix and Karl have a mortgage of £20,000 on a house in the United Kingdom in which they used to live when they were in the UK. But the house has been sold. The repayment of the mortgage amount is still going on. Karl will be eligible for a pension when he attains the age of 62. After this Beatrix will also retire from her job and the couple plans to relocate themselves to a small village where their eldest son namely Hans lives.
“Finding a suitable place to live after retirement should be priority No.1 Larger cities are good for the younger people but the Retirees should consider moving out to a pollution-free town or village in the outskirts of the city.” (Siva, 2009).
Beatrix and Karl plan to sell their house in Germany which is currently valued at around €120,000. After that, they are planning to move to the above-mentioned village and will buy a new house in that village. After retirement, most people will be interested in leading a calm and peaceful life in a village. They expect that the new house they are going to buy may cost around €60,000. One of the children of Beatrix and Karl lives in Paris and they plan to visit her and spend some time with her before relocating to their new home in the village. (Beatrix).
Financial assets of Beatrix and her husband
Beatrix has inheritance money of £200,000 from her father. They have a house which they plan to sell and expect to receive a sum of more than £120,000. They also have an account balance of €10,000. And they also expect to receive some perks as retirement benefits.
Financial needs of Beatrix and her husband
They have a pending mortgage on the house in the United Kingdom £20,000. And also, they require to spend a sum of around €60,000 for the purchase of a new house. They expect that a trip to their daughter’s cost them a sum of around €8000.
Financial advice to Beatrix and Karl
From the background information of Beatrix and her family, it is clear that she is financially strong though she may be belonging to a middle-class family. The only financial obligation that they now have is the mortgage on the house in the United Kingdom £20,000. This can be cleared easily with the money that Beatrix received as inheritance money from her father.
It is a commonly known fact that one of the biggest elements of the household budget is the money spent on the education of the children. As all the children of Beatrix and Karl have already completed their education and each of them has got a good job, the parents need not worry about the education and other expenses for the children. The only liability, as stated earlier in the pending mortgage, but they have different assets like their house, inheritance money of £200,000, a savings account balance of €10,000, etc. They are planning to sell their old house in Germany, which is valued at around €120,000, and buy a new house in France for around €60,000. So, there is a saving of around €60,000 in this transaction.
Moreover, they should start getting their eligible pension when due. This money is to be wisely used focusing on the future. They will certainly not be interested in approaching their children for financial help in their future life. A better way is that they can invest an amount of €150000 in securities in France. The investment can be by way of equities of reputed companies. This is expected to give them a very good, steady income. However, for that, they should consult a stock agent and go by his professional advice. An amount of €50,000 can be kept in a fixed deposit with a good bank. This deposit with interest would provide them with funds for future use. “A good investment strategy requires choosing the right mix of safe and risky investments. Among safe investments, fixed deposits, FDs, are the most popular today.” (Sawaikar, 2007).
A good, reputed bank should be selected for making fixed deposits.
The present position of the banking sector in France is that it is healthy and growing and offers tremendous opportunities for investors and depositors. (France as an investor, 1906).
They can use the rest of the money for daily expenses and other emergency expenses. For a trip to their daughter’s house in Paris, they will need to spend around €8000. This can be met from the money left after making an investment in shares and fixed deposits.
Another option for the couple is to start a business hoping to earn a good income. You look around and see that to own a business is the aim of many people.
“If you’ve always wanted to be your own boss, now is the time to start your own business. There’s a lot you can do according to your specialty and talents. Start on a small to moderate scale. Use all the contacts you’ve built over the years and see your venture grow.” (Enrich your retired life, 2004).
To be the owner of a business will give a high-level satisfaction and pleasure. This way one can also keep oneself busy in the retired life; otherwise, they may have to lead a boring life.
A sound financial position is a prerequisite for making the retired life happy. Lack of sufficient money is bound to give tension to retired people. Therefore, the money available should be wisely invested which can ensure prosperity with good returns and growth. From the available investment opportunities, one must select the option which is best suited carefully considering all factors of security and return.
Beatrix: background information: investment strategy project, ISWK1 Research Project question  Microsoft Word (provided by the student).
Enrich your retired life: start a business 2004, The Hindu, viewed 9 May 2009, http://www.hinduonnet.com/jobs/0409/2004090100121000.htm
France as an investor: places $500, 000, 000 annually in foreign ventures: opening for our bonds1906, The New York Times, viewed 9 May 2009, http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=940DEED6113EE733A2575BC2A9639C946797D6CF
Siva, K 2009, Change in life style and environment- the secret to a happy retired life, Ezine Article, viewed 9 May 2009, http://ezinearticles.com/?Change-in-Lifestyle-and-Environment—The-Secret-to-a-Happy-Retired-Life&id=340077
Sawaikar, NS 2007, What you must know about fixed deposits, Rediff News, viewed 9 May 2009, http://www.rediff.com/getahead/2007/jul/17fixed.htm