Finance

STATEMENT OF OBJECTIVES
As a 30 year old I realize that time is really moving fast and I have to plan not only for my future but also for my retirement plan. My life expectancy is 95 years and this is not bad given that the life expectancy is approximately 78 years (Julie, 2009). However that is not the maximum age I can attain since I have all it takes to make me live even more. Therefore I need money to spend after retiring. This will be made possible to current investments and savings. This means that I need a portfolio that will be growing annually at the age of 60 when I retire will start withdrawing a monthly maintenance amount 1000. The other objective is to pay off the mortgage.

Management of portfolio
Looking at their dreams it would be wise for Mrs. Fortune to build her craft business because she would be able to earn more. This would appear to be splitting responsibilities or doing Fortune a favour but looking at another perspective it would be an investment. The amount earned when Mrs Fortune business picks up will be used to maintain.

For the couple pay off the mortgage for their home at this period of time will be considered a wise move because they will definitely enjoy tax deductions and avoid interest associated with mortgage amount when it is spread. This is because the government deducts all of the money paid towards buying of property from the gross income to reduce the taxable income. In about fifty years the cumulative amount that will have been paid will be very high as a lump sum now.  I will also ensure they join qualified retirement plan is able to enjoy deferral of tax payment until the employee actually receives the retirement benefit. The benefits tax deferral cannot be observed at a go but over the years until someone retires it accrues a lot of income. When the couple increases their contribution towards their employer sponsored retirement plans it will be beneficial. For instance if the couple contribute 100 each month, each one of them will have 1200 in a year and after a period of lets say thirty the contribution will have grown tremendously . This money will be earning interest which will not be taxed until the time when it is withdrawn. In the event that the money is withdrawn as a lump sum it will only be taxed just that once. Considering a case when the couple decides to invest the money, they will be required to pay tax on every interest earned. The major advantage of contributing towards a pension plan is that one enjoys the benefits of tax deferral. However this is not all because a person will always encounter lower marginal tax rates when they are retired as compared to when they are working.

Establishing a sideline business for Mrs Fortune operation will definitely increase on their taxable income considering that the profits earned will be taxed. The jewellery operation earns about  10,000 per year, for instance this operation is established as a business it might even be able to earn much more than this. Therefore although the taxable income will increase, tax credits will also increase by a closer margin. It is therefore a wise way to invest.

It is important that in the event that the income becomes more than the expenses that this money is invested wisely.  Fortune already has a deposit from an inheritance worth 100,000 that is expected to use to clear a mortgage. He has also a portfolio of assets. This means that this couple has a lot to start with in terms of asset management because they already have long term investments.

They can use the money they have saved as a result of shared expenses to strengthen these areas or venture into other areas of asset management. When they invest in the portfolio that they already have it might be risky, however it might also be helpful because they already have confident with the respective institutions and will only be required to top up their savings with them. Diversification can also be risky because it will constitute venturing into a whole new area which might be time consuming to understand, securing a dependable firm can also be hard.

The use of money market account by the couple is a wise financial move considering that they have future plans. They all have other commitments that cannot allow them to get involved in a business that will be time consuming. In this case by opening a money market account they transfer this responsibility to a given institution. Basically the money invested in this way is money that is not needed presently therefore they can use this money market account for their monetary asset management provided that the institution is trustworthy. The major advantages of the money market account are the high amount of interest earned and the fact that it greatly reduces the risk of losing money. The money market account is an investment unlike other conventional accounts which are used for saving money. As a result it provides restrictions on issues such as withdrawal of money thereby providing discipline against the constant temptations to spend money. In other words the liquidity of the money is greatly reduced. Money market account allows for one to withdraw, there are restrictions on how many withdrawals that can be made within a month. Furthermore the institutions involved discourages combined withdrawals below a certain minimum amounts by imposing penalties. All this aspects combined ensures that the money market account remains a long term investment (Business.com).

Conclusion
The best ways for the couple to discuss the management of their money and other finances is first of all by keeping records and updating whenever changes are made. From this perspective, the couple can come with a plan governing aspects such as monthly expenses, combined future plans and individual plans. With this background they can therefore discuss the management of their finances or get the services of a professional if need be.