Good Case Study On Capital Need Analysis-Risk Assessment

Introduction

The life is so uncertain; therefore it is very important for an individual to secure their life for their children and other important things accordingly. The decisions that specifically relate to maintain and manage the level of mortgage and other expenses are very important for a couple to manage significance in their life. Budgeting and Forecasting are some of the major elements and aspects that specifically associated with an organization as well as with an individual as far as manage their funds and effectiveness accordingly.
After the current economic crisis, the thing that strengthens its roots in the economic scenarios is maintain significance for their long run profitability and level of efficacy. The main theme of this assignment is to have a capital need analysis for a couple on the basis of a giving scenario. The scenario revolves around two different individuals Jay and Lisa a couple that currently has only one child. Both of them are employed and subject to a substantial amount of money in each of the year. Both of the individuals have invested sufficient amount of capital in different securities and invested capital. There are four different aspects that needed to be analyzed in this analysis.

Discussion & Analysis

It is very important to pen down all the main four points that relates specifically with this analysis, as all of the points are effective and important.

Capital Need Analysis

Needs and wants of a person can never be satisfied as it is an internal appetite of a person, and it cannot be overcome with any other action. In order to retain and spend a prosper life; it is very important for an individual to have sufficient information related to their capital and its core requirement accordingly. As mentioned earlier that the budgeting and investment is very essential for an individual to make their life prosper. An individual usually takes number of assets on credit, especially in the western countries like Canada and others. They are in need of Capital to finance their different things, and usually they would like to finance it through their yearly salaries and other income.
Likewise other individuals, Jay and Lisa also have effective demand of Capital Need to finance their long run assets. Fortunately, they only have one newly born baby; therefore they have no expense related to schooling fees and all in the current scenario. However, they have other assets that needed to be analyzed with the passage of time accordingly. In this section, it is required to analyze the level of capital needs of both Lisa and jay to gain an understanding about their financial position. The mortgage and home assets belong to both of these individuals, therefore it will be referred as an asset for both, and the mortgage amount will be subtracted from the amount of both of the professionals.
A Life and insurance analysis requirement has been initiate din this particular analysis for both Lisa and Jay. A life insurance is basically a sort of indemnity that gives a position to a person to save their life. Most of the life insurance facilities promise to pay a lump sum amount of money at the end of the life. The existence of life and health insurance is somewhat mandatory, but not as powerful in the Asian region. The position should have been analyzed on the basis of available assets, cash and others. After a critical analysis of capital needs of Lisa, it is found that the total assets which are available for her is CAD$ 664,800 which include an amount of CAD$ 325,000 as a long term assets which proportionate to a level of 49%. The amount of available capital for Lisa is amounted to CAD$ 134,800 and it is in the positive term that found that Lisa is not in need of any sort of new insurance for their capital accumulation. It is showing that Lisa has a secured and powerful future, because she has sufficient capital to maintain their significance for a long span of time. She only has one baby girl, and her salary and assets are more than enough to nullify the effects of their capital requirement completely with a positive mind set. The capital required for the income for Lisa is CAD$ 1,462,500 which also in positive term that found that Lisa is not in the necessity of having any type of insurance capital. Lisa now has the options to initiate the things related to their existence and check out the things accordingly for their effectiveness, as they have the chance to achieve their objectives without any sort of issue and problem in the future. On the other hand, Jay also has an available capital amounted to CAD$ 127,500 while the capital required for the income for Jay is CAD 1,287,500. From this particular analysis, it is clear that both of these individuals are not in any sort of need of having any type of capital. It is also found that the available capital of this couple is more than enough to manage their effectiveness and budgeting in a perfect manner. After having a critical observation of Jay Analysis, it is found that the person don’t have any sort of health and life insurance, which can endanger his position in the upcoming years. However, Jay also has sufficient funds available from which they can sponsor their mortgage and can live accordingly for a certain time period with zeal and prosperity.

Recommended type of Life Insurance

The capital need analysis which has been computed in the excel sheet for both Jay and Lisa is manifesting that both of these individuals are not in the need of any type of additional capital and life insurance as they have sufficient assets. The amount of assets of the company re higher than their liabilities level
It is recommended to both of these professionals to not to invest in any type of new life insurance facility as they have sufficient funds available from which they can finance their entire life easily after subtracting all of the expenses that may be required by them to live their entire life. However, both of these individuals are required to maintain their significance to invest in blue chip shares and securities to make them able to manage accordingly for a long span of time. Both of the individuals have a very low side of investment in the securities, which is one of the most important types of investment. It is recommended to both of these professionals to have a large amount of investment in the Blue Chip Shares of the company, because their dividend income can be very effective and worthwhile for their core future. Jay has an investment in the Gold, which is a perfect one to nullify the adverse effects of inflation and other things that may hamper the position of the individuals. Investment in the Gold can be extremely essential and powerful for the individuals to have its effectiveness in the future, and Jay already has sufficient investment in Gold. However, it is recommended to Lisa to have sufficient amount of investment in the Gold to combat with the adverse effects of inflation and inflation related securities. Both Jay and Lisa have to invest in such securities that offer them a higher required rate of return in the future.

Recommended to Jay

CPP and EI Recommendations
The abbreviation of CPP is Canadian Pension Plan, which is an important insurance plan through which a person has a secure future. The Canada Pension Plan is a Contributory earning based related social insurance program. This particular program forms one of the two major components of the public retirement income system of Canadian region. The program of CPP mandates all the employed professionals in the Canadian region who have a minimum age of 18 years. The Government of Canada is backing the entire program to provide a sort of assistance to their citizen. Jay has a private business, and CPP allows every person to entitle to CPP, who are working in the region of Canada. On the other hand, EI which is employment Insurance also requires having those Canadians who are having an employment. Employment Insurance is mandatory for the companies to give to their employees, as it is a kind of safety measures to retain their position in the company for a certain time period and increase their financial and economic belongings and outcomes. EI is entitled to give safety measures to the employees working in different parts of Canada to make them satisfy from their job. According to these scenarios, Jay is entitled to have the CPP but not EI, because he is self employed and he has a business, while Lisa is an employee and she is entitled to have both CPP and EI Insurance. From this particular analysis, it can be said that Jay is entitled to have the facility of CPP, and he can have all the facilities that found in the CPP. Jay will receive sufficient amount of pension according to the plan and prescribed amount from the Canadian Government. On the other hand, Jay cannot have the EI, and in order to have the EI, Jay has to join a new job in order to get the insurance facility from their employment.