Personal Financial Plan – Albert Nua

PERSONAL FINANCIAL
PLAN
Designed for

ALBERT NUA
Oct 20, 2019

Presented by

Jason Sy Teh
Registered Financial Planner
hasonteh1@gmail.com; 0920 -962 6656
 Personal Financial Plan – Albert Nua

CONTENTS
I. Objectives
II. Clients’ Profile
III. Clients’ Background and Situation
IV. Clients’ Financial Goals
V. Diagnosis of Current Financial Standing
A. Statement of Cash Flow
B. Statement of Net Worth
C. Details of Credit Card & Loans
VI. Financial Needs Analysis and Recommendations
A. Emergency Fund
B. Debt Pay Off Solutions
C. Critical Illness & Health Insurance Needs
D. Retirement Needs
VII. Summary of Income Surplus Allocation
VIII. Summary of Action Plans
IX. Appendices
A. Periodic Review of the Financial Plan
B. A Note from your Financial Planner
C. Financial Planning Engagement
 Personal Financial Plan – Albert Nua

I. OBJECTIVES
There are seven (7) objectives that we aim to achieve with this financial plan:
a. Have a Well-Stocked Emergency Fund
b. Get Out of Debt – Completely
c. Plan For Early Retirement
d. Have Enough Insurance to Cover Contingencies
e. Be Able to Live on Less Than You Earn
f. End Any Addiction to Stuff That He May Have
g. Plan to Leave Your Financial House in Order Upon Your Death

II. CLIENT PROFILE

Client Name: ALBERT S NUA
Age: 49
Date of Birth: MAY 7, 1970
Status: SINGLE
Address: 7TH Avenue Grace Park Caloocan City
Occupation: Entrepreneur, tutor
Employer: SELF-EMPLOYED: Albert’s Tutor Services
General Health Status: In good health; Non-Smoker

III. CLIENTS’ BACKGROUND & SITUATION

Albert was born 1970, His mom is a teacher, and his dad is a sales agent. He is
an alone child. Their life is simple and comfortable.

In 1990 when he was just about to graduate as an ECE in Mapua. His mom had
issues with health and, thus, need money for his mom's treatment. Then Albert
decided to start his tutor business to meets ends and for his to finish his studies.
Thus, I was one of his studies to availed of his tutor services for my physics class.

Two years after, his mom died to complications to illness at that time; he is already
earning 30,000 a month for his tutorial services. However, due to hospital bills,
his family got into debt of around 800,000 pesos from his dad’s family and friends.

Three years after, his tutor business is becoming very famous, and He is earning
nearly 100,000 a month. He was able to clear his family’s debt. However, his dad
suffered from End-Stage Renal Disease in the same year. All the savings that
Albert had gone in just a few weeks.
 Personal Financial Plan – Albert Nua

His dad managed to live for another four years before he passed away due to
complications in illness. At that time his tutor business is not doing very well, and
he was in debt for almost 2 million pesos. Because of hopelessness, he tried his
luck in CASINO. And because he is a mathematician, he keeps on winning in
CASINO only to lose them ALL after few months.

Albert is a fighter; he never surrenders. He got the opportunity to teach in St Jude

tutor business, and this time the business went successful. He was already
making around 100,000 income a month, and slowly paid off his debt

Then he met his common-law girlfriend, who is a single mom. They decided to
live together, And it has been five years since, and they are still living together.
Her common-law girlfriend works as a GRO is a high-end club in Quezon City
where they met. However, He and his common-law girlfriend part ways last year,
and Albert is single once more.

Throughout the years in working, he was able to save 300,000, and he

accumulated some furniture and appliances worth 168,000.00. He has still some
debts from credit cards, which are currently under the balance transfer program.
Lastly he still has some debt from his relatives amounting to 350,000.00

IV. CLIENTS’ FINANCIAL GOALS

With the help of their financial planner, James and Anne were able to come up with the
following goals:

Table 2
GOALS AMOUNT START DATE
To build emergency fund ₱ 264,360.00 Cash In Bank enough for emergency funds
To pay off credit card ₱ 337,584.11 Nov-19
To pay off loans from relative ₱ 350,000.00 Nov-19
To cover insurance needs ₱ 2,468,000.00 Nov-19
To cover HMO ₱ 49,701.00 Nov-19
To establish retirement fund ₱ 8,292,454.86 Nov-21
 Personal Financial Plan – Albert Nua

V. DIAGNOSIS OF CURRENT FINANCIAL STANDING

A. STATEMENT OF CASH FLOW
Table 3
STATEMENT OF CASH FLOW
INCOME
SALARY MONTHLY ANNUAL
Albert's Income from Tutorial Business 86,800.00 1,041,600.00
Total Net Salary 86,800.00 1,041,600.00
TOTAL INCOME 86,800.00 1,041,600.00
EXPENSES
NON-DISCRETIONARY
Food 10,000.00 120,000.00
Transportation 6,000.00 72,000.00
Grocery 3,200.00 38,400.00
Electricity 1,300.00 15,600.00
Water 400.00 4,800.00
Cable TV 550.00 6,600.00
Internet broadband 550.00 6,600.00
Cellphone load 1,800.00 21,600.00
Rent 9,500.00 114,000.00
Gasul 760.00 9,120.00
Cleaning & Laundry Fee 4,000.00 48,000.00
Total Non-Discretionary 38,060.00 456,720.00
Dining out 3,500.00 42,000.00
Entertainment 500.00 6,000.00
Church donation 500.00 6,000.00
Provision for Gifts 666.67 8,000.00
Clothing Allowance 833.33 10,000.00
Total Discretionary 6,000.00 72,000.00
Loan Payments
Debt Payment 21,910.20 262,922.45

SURPLUS/(DEFICIT) 20,829.80 249,957.55

 Personal Financial Plan – Albert Nua

B. STATEMENT OF INCOME
TABLE 4
Months Student Rate Gross Sales Cost of Good Sold Income
Jan 30 8000 240,000.00 96,000.00 144,000.00
Feb 30 8000 240,000.00 96,000.00 144,000.00
Mar 40 8000 320,000.00 128,000.00 192,000.00
Apr 25 4000 100,000.00 40,000.00 60,000.00
May 10 4000 40,000.00 16,000.00 24,000.00
Jun 4 2000 8,000.00 3,200.00 4,800.00
Jul 4 2000 8,000.00 3,200.00 4,800.00
Aug 15 8000 120,000.00 48,000.00 72,000.00
Sep 20 8000 160,000.00 64,000.00 96,000.00
Oct 25 8000 200,000.00 80,000.00 120,000.00
Nov 25 8000 200,000.00 80,000.00 120,000.00
Dec 25 4000 100,000.00 40,000.00 60,000.00
1,041,600.00
average 86,800.00

C. STATEMENT OF NET WORTH

STATEMENT OF NET WORTH

as of 15 May 2019

ASSETS Albert
Cash In Bank 300,000.00
Accounts Receivable from Business 200,000.00
Furniture and Fixtures 168,000.00
TOTAL INDIVIDUAL ASSETS 668,000.00
TOTAL COMBINED ASSETS 668,000.00

LIABILITIES
RCBC Credit Card 110,000.00
Metrobank Credit Cards 208,000.00
Advances and Loans from relatives 350,000.00

TOTAL INDIVIDUAL LIABILITIES 668,000.00

TOTAL COMBINED LIABILITIES 668,000.00

TOTAL COMBINED NET WORTH 0.00

 Personal Financial Plan – Albert Nua

C. CREDIT CARD DETAILS and OTHER DEBT

Table 6
Credit Cards Details and Outstanding Obligations
Int.
Owner Company Rate/month Outstanding Bal.
Albert Bankard 1.50% 110,000.00
Albert Metrobank 0.88% 208,000.00
Albert Loans from Relative 0.00% 350,000.00
TOTAL 668,000.00

VI. FINANCIAL NEEDS ANALYSIS AND RECOMMENDATIONS

A. EMERGENCY FUND
Table 7

EMERGENCY FUND COMPUTATION

Monthly Expenses # of Months To Cover Emergency Fund Size
50,060 6 300,360

Analysis and Recommendation: Emergency Fund is to be established to make

sure that you can still fulfill your monthly obligations in case of job loss and any other
financial disasters. This fund is your financial cushion during an event that you can
justify as an “emergency.”

Albert intends to cover six months' worth of their monthly expenses for any financial
disaster that may occur in the future. His total EMERGENCY FUND should amount to
P300,360. Given that he has total existing cash in bank amounting to P300,000, it is
recommended they earmark that amount as their emergency fund.
 Personal Financial Plan – Albert Nua

B. DEBT PAYOFF STRATEGY

Table 8A

Debt Reduction Plan

Date Monthly Savings LOAN BALANCE Ending Balance
Nov-19 21,910 788,767 525,845
Nov-20 21,910 525,845 262,922
Nov-21 21,910 262,922 0

TOTAL 788,767

Analysis and Recommendation: Paying off the debt should be the ultimate goal
especially these are credit card debt and debts from relatives which resulted from the
critical illness of his father. Albert needs PHP 21,910.00 per month to pay off his
debt.

Table 8B

Monthly Amortization Table

Company Int. Rate/month Outstanding Bal. monthly amort
Bankard 1.50% 110,000.00 ₱4,215.97
Metrobank 0.88% 208,000.00 ₱7,972.01
Loans from Relative 0.00% 350,000.00 ₱9,722.22
TOTAL 668,000.00 ₱ 21,910
 Personal Financial Plan – Albert Nua

C. CRITICAL ILLNESS AND HEALTH INSURANCE NEEDS

Table 09A

PROTECTION NEEDS
ALBERT
Immediate Needs
Hospitalization/Medical Bills 2,000,000
Funeral Cost 300,000
Outstanding loans 668,000
Estate Settlement 0
Others 0
TOTAL IMMEDIATE NEEDS 2,968,000

Education Needs
Grade School 0
High School 0
College 0
TOTAL EDUCATION NEED 0

Replacement Income Fund

Monthly Need (insured's share of household expense) 0

# Years of Financial Support 0

TOTAL REPLACEMENT INCOME FUND(annual need x # years) 0

TOTAL PROTECTION NEEDS 2,968,000

Analysis

Albert needs 1 Million pesos to cover his final expenses, and loan payment incases
something him now. Also, he needs at least 2 Million pesos just in case he gets a
critical illness.

Currently, Albert has 500,000 liquid assets that he can use for his final and debt pay-off
settlement. Hence his gap is around PHP 2.5Million pesos.
 Personal Financial Plan – Albert Nua

Table 09B

PROTECTION SOURCES
ALBERT
Existing Liquid Assets
Cash on hand 0
Cash in bank 300,000
Other liquid assets 200,000
TOTAL LIQUID ASSETS 500,000

Existing Life Insurance - Individual

Term Insurance 0
MRI 0
VUL 0
TOTAL LIFE INSURANCE - 0
INDIVIDUAL

EXISTING GROUP LIFE 0

INSURANCE

TOTAL PROTECTION SOURCES 500,000

PROTECTION SOURCES 500,000
Less: Protection Needs 2,968,000
PROTECTION SHORTFALL 2,468,000

Recommendation:

Even though Albert has no more family to succeed in his estates, for now, he still required
some money for his health protection. In the event he gets sick, his assets and income
will not be enough to cover the expenses. Thus, I am recommending for him to avail
AXA’s healthstart with 2.5 Million Coverage. If he acquired any of the 56 major critical
illness, he would have some funds to cure his critical illness or use the funds to fulfill his
wishes before he goes to heaven. Besides, Albert has some outstanding debts and
obligations to settle when he departs the Earth. Lastly, HealthStart offers critical illness
protection; however, what if he got hospitalized due illness that is not considered critical?
Hence I suggest, for Albert to get an HMO to at least cover him in case of illness.

Recommendation
Client Type Annual Premium COVERAGE Provider
ALBERT HealthStart 109,000.00 2,500,000.00 AXA
ALBERT HMO 38,681.00 100,000.00 MaxiCare
TOTAL 147,681.00

I recommend that Albert immediately purchase the above insurance product to zero
out their insurance gap.
 Personal Financial Plan – Albert Nua

C-1. RATE CARD AND PROPOSAL

A. MAXICARE RATE CARD:

B. Health Start Proposal :

 Personal Financial Plan – Albert Nua

D. RETIREMENT NEEDS
TABLE 10

Retirement Fund Computation – ALBERT

The present value of retirement expenses 25,000 per month
300,000 per year
Present age 51 years old
Target retirement age 65 years old
Years in retirement 20 years
Inflation rate 3.0% per year
Rate of return (build-up period) 8.0% per year
Rate of return (retirement period) 4.0% per year
Expenses at the start of retirement 37,815 per month
Expenses at the start of retirement 453,777 per year
Inflation-adjusted rate of return 0.971% per year
Required retirement fund 8,292,455
Required savings/investment 26,424 monthly
317,085 yearly

Build-Up Period
Age Annual Amount Accumulated Amount

51 317,085 317,085
52 317,085 659,538
53 317,085 1,029,386
54 317,085 1,428,823
55 317,085 1,860,214
56 317,085 2,326,116
57 317,085 2,829,291
58 317,085 3,372,720
59 317,085 3,959,623
60 317,085 4,593,478
61 317,085 5,278,042
62 317,085 6,017,371
63 317,085 6,815,846
64 317,085 7,678,199
65 8,292,455
 Personal Financial Plan – Albert Nua

Retirement Period
Retirement Beginning Annual Ending
Year Balance Expense Balance
1 8,292,455 453,777 7,838,678
2 8,152,225 467,390 7,684,835
3 7,992,228 481,412 7,510,816
4 7,811,249 495,854 7,315,395
5 7,608,010 510,730 7,097,281
6 7,381,172 526,052 6,855,120
7 7,129,325 541,833 6,587,491
8 6,850,991 558,088 6,292,903
9 6,544,619 574,831 5,969,788
10 6,208,579 592,076 5,616,503
11 5,841,163 609,838 5,231,325
12 5,440,578 628,133 4,812,445
13 5,004,943 646,977 4,357,965
14 4,532,284 666,387 3,865,897
15 4,020,533 686,378 3,334,155
16 3,467,521 706,970 2,760,551
17 2,870,973 728,179 2,142,795
18 2,228,506 750,024 1,478,482
19 1,537,622 772,525 765,097
20 795,701 795,701 0

Analysis and Recommendation: Retirement is one of the most important events

in a person’s life. Enjoying a comfortable lifestyle once we reach our golden years is
what most of us dream. Some might aspire to retire in a house with a beachfront view,
others a farmland backdrop, and some wants to spend their retirement days with their
families. No matter how simple or grand your idea of retirement, early planning is the
key to achieve your goals. Retirement planning is an extensive process that needs
long term commitment. Building your nest egg, making it grow to meet your retirement
needs, managing the fund and preserving it are just some processes that you have
to undertake in planning for your retirement. The ongoing responsibility to handle
these processes is one of the reasons why many people forego, delay or ignore
retirement planning. Unfortunately, doing nothing to prepare for this important life
event can take a heavy toll on all aspects of your life in the future. One certain fact
in this world is that our lives are full of uncertainties. Unforeseen illnesses, your
financial needs in the future, and shortfall in our government provided pension
funds are some reasons why you need to start planning for your retirement.
 Personal Financial Plan – Albert Nua

Albert’s case he is alone in his life without any family. Hence his retirement could be
challenging for him as no one will take care of him. Preparing for his retirement age is
key to the success of his financial plan.

At present value, Albert wants to have a monthly retirement income of P25,000. Albert
needs P 453,777.00 per year to meet his retirement goals.

To meet his retirement goals, the following recommendation is given:

Albert’s annual investment for the next 14 years = P317,085(P26,424/month)

Albert’s investment for retirement needs to earn at least an 8% yield annually.

Note that he has a monthly income surplus of P20,829.00. And this is not enough to
fund his P 26,424 savings. Hence during the time he needs to pay off his debts, I
recommend investing his funds for his critical illness insurance and health needs.

After paying off his debts, He will free up P 21,910, and this will add to his monthly
surplus, thus increase his surplus from P 20,829 to 41,910.20. Having said this
situation, He will afford to contribute P26,424 per month to be invested towards his
retirement fund.

The recommended investment instrument to build the couple’s retirement fund is

MUTUAL FUND(EQUITY FUND) under the First Metro. The fund is invested in blue
chips companies in the Philippines (top 30) and managed to post an 8% compounded
annual growth rate (CAGR) for the past ten years.

The investment instrument of choice for his fund preservation is Security Peso Bond
Fund under the Security Bank group.

The Fund aims to achieve a steady stream of income by investing in a diversified

portfolio of Philippine Peso denominated high-grade fixed income instruments, such as
but not limited to, government securities, corporate notes and bonds, and fixed income
funds. The fund’s 5 yr return was posted at 5.875% – 6.125% p.a. (subject to 20%
withholding tax)

VI. SUMMARY OF INCOME SURPLUS ALLOCATION

TABLE 11

INCOME SURPLUS ALLOCATION

FINANCIAL GOALS MONTHLY ANNUAL
Emergency Fund 0 0
Health Fund 3,223 38,681
Insurance 12,307 147,681
Retirement Fund 26,424 317,085
TOTAL 41,954 503,447
 Personal Financial Plan – Albert Nua

VII. SUMMARY OF ACTION PLANS

TABLE 12

IX. APPENDICES
PERIODIC REVIEW OF FINANCIAL PLAN

Note that once the debt payment is fulfilled, there will be free cash flow on his end. As
such, we must sit down and discuss where to re-allocate the additional cash available
for GHA. Also, if your income increases, we can meet to discuss how can you increase
your retirement funds so that when the time that you will retire, you can enjoy your
retirement years.

The most effective Financial Plan is the one that addresses your current financial
concerns and goals. Life constantly evolves, so does your financial status. We must
meet once at the end of each year to discuss any life events that could affect your
current financial plan and make some adjustments, revisions, or re-alignment of your
financial plan. If there’s a need for a meeting anytime within the year, give me at least
a week's notice to schedule the meeting.

A NOTE FROM YOUR FINANCIAL PLANNER

The road to financial security and freedom is not all smooth and even. It is a bumpy ride
full of challenges and setbacks, yet with proper knowledge and discipline, that ride can
be satisfying and rewarding. The financial plan that we prepared is intended to make
you educated in all possible areas of your financial life. I hope that you will not go to
casino to gamble and gain big money from luck. With the plan that we created, we have
already covered your expected and unexpected needs and hope that when you stick to
this plan you will retire comfortably.
 Personal Financial Plan – Albert Nua

FINANCIAL PLANNING ENGAGEMENT

This Mutual Non-Disclosure Agreement (the “Agreement”) is made and effective [DATE],

BETWEEN: JASON SY TEH

AND: ALBERT NUA

WHEREAS, in order to pursue the mutual business purpose of a possible transaction between Disclosing
Party and Receiving Party and/or their affiliates (the “Transaction”), both Disclosing Party and Receiving
Party recognize that there is a need to disclose to one another certain information in respect of itself and/or
its affiliates.

WHEREAS, all such information, delivered by or on behalf of one party and/or its affiliates (the “Disclosing
Party”) to the other party (the “Receiving Party”) and/or its Representatives (as defined below), whether
furnished before or after the date of this Agreement and regardless of the manner in which it is furnished,
together with all analyses, compilations, studies or other documents or records prepared by the Receiving
Party and/or its Representatives to the extent such analyses, compilations, studies, documents or records
contain, otherwise reflect, or are generated from such information, is referred to herein as “Evaluation
Material”.

NOW, THEREFORE, in consideration of the opportunity to consider such Evaluation Material, both parties
at this moment agree as follows:

1. NON-DISCLOSURE OF INFORMATION PROVIDED

The INFORMATION PROVIDED will be used by the Receiving Party solely for the purpose of ANALYZING
and recommending Personal FINANCE PLAN. Such INFORMATION will be kept strictly confidential by the
Receiving Party, who agrees to treat the Personal Finance PLan following the terms of this Agreement.

2. CONFIDENTIALITY OF THE TERMS OF THIS AGREEMENT

Unless otherwise required by law, or unless otherwise provided in a final definitive agreement regarding
the Transaction when, as and if executed, both parties and their respective Representatives will not, without
the prior written consent of the other party, disclose to any person (other than Representatives of the parties
hereto who need to know such information for the purpose of evaluating the Transaction and who agree to
treat such information in accordance with the terms of this Agreement) any of the terms or conditions of the
Transaction.

3. OWNERSHIP OF RIGHTS TO PERSONAL FINANCE PLAN

Nothing in this Agreement shall divest the Disclosing Party of any of its right, title, or interest in and to any
PERSONAL FINANCE PLAN. Within 60 days after being so requested by the Disclosing Party, the
Receiving Party and its Representatives shall destroy or return all Evaluation Material furnished to the
Receiving Party and any of its Representatives by the Disclosing Party. Except to the extent a party is
advised by counsel that such destruction is prohibited by law, the Receiving Party and its Representatives
will also destroy all written material, memoranda, notes, copies, excerpts and other writings or recordings
whatsoever prepared by the Receiving Party and/or its Representatives based upon, containing or
otherwise reflecting any Evaluation Material. At the request of the Disclosing Party made at the time of its
request for the destruction of Evaluation Material, any destruction of materials shall be certified to the
Disclosing Party in writing by an authorized officer of the Receiving Party supervising such destruction.

IN WITNESS of which, the parties hereto have executed this Agreement as of the day and year first above
written.

ALBERT NUA JASON TEH