Name: ________________ BBI2O – Finance Assignment

Saving and Investing Scenario

● be sure to use your Saving and Investing Options Powerpoint to complete this
Assignment

Details of: fictional person; their current income level; their family
(make up a short story include their age, marital status, how much money they earn, if they have children
and if so how many and ages)

Oscar Cummings is a 37 year old married police officer who lives with his
wife, 35, and daughter, who is 10 years old, and earns $60,000 per year.
His wife works as a journalist for the CBC, bringing in $40,000/yr. The
house income is $100,000/yr. Most of his expenses are house mortgage, car
insurance and family costs.

Saving and Investing Goals (3+). Be sure to include time-frame & approx
‘cost’ ($) of goal
Example: Save for a Masters Degree 3 years from now; cost is $30 000

Goal 1: Oscar wants to save for a family vacation to Switzerland in 5 years which will
approximately cost $9,000 plus any extra expenses.

Goal 2: Oscar wants to finance his daughter’s post-secondary education which will cost
about $100,000. The expenses will be alleviated as he plans on having his daughter to
have a part-time job as soon as she enters college in 8 years.

Goal 3: He wants to invest for long-term so he and his wife have enough money saved
about $250,000 for retirement. He is very adamant that their future be very secure. They
want to retire in 30 years from now.

SOLUTIONS: what 3+ saving or investing options would allow them to meet their goals in the
specified time frame. Examples: RESP, Stocks, Real Estate (explain each of your recommendations based
on the goals) Don’t use the same investing/saving recommendations for each of your goals.
Name: ________________ BBI2O – Finance Assignment

Goal 1 Solution: I recommend that Oscar should save money using a Guaranteed
Investment Certificate(GIC) as their vacation is 5 years away and they want to ensure that
their vacation costs will be covered. GIC is very safe and offers a guaranteed rate of return.
Most GICs are not very liquid and locked for the amount of time agreed upon which suits
him because this investment is for 5 years. Oscar and his wife should deposit a certain
amount and they can see that their deposit will increase and eventually they will enjoy their
vacation.
Goal 2 Solution: A Registered Education Savings Plan would be perfect for this family.
Their daughter is still very young and it’s never too late or early to start an RESP account.
Oscar and his wife would contribute to this tax-free account which is very safe as it’s backed
by the government. The money will earn interest over the 8 years until she’s ready to go to
post-secondary, with the addition of government giving grants and benefits too. This will
ease her daughter’s stress as she goes to college/university and gets on her own feet.
Goal 3 Solution: Him and his wife should annually contribute to a RRSP( Registered
Retirement Savings Plan) is the safest and one of the best and cheapest ways to assure them
that they won’t need to worry about working at an old age. The couple is very young, which
means they’ll get a lot of years of compound interest. Also, the sooner you start contributing
to an RRSP, the more money will be in the RRSP for retirement when you want to start
withdrawing money from it to live on. Him and his wife can put in $5k in their joint account
annually (which will be financially easier than individual as they also have their daughter’s
education and other expenses to pay), they will end up with $250,000