Investor Name: Time Sherrin
Relation: One of my friends

Personal Information
Investment goals: Mr. Sherrin has two investment goals; one is to have $30,000 saved in 16 years to help pay for his 2 year old daughters’ first two years of her college education, and another is to save for his retirement.

Risk tolerance: Based on the Vanguard questionnaire, he came up with a score of 57 which puts him in the “moderate” level of risk tolerance. After speaking with the client and explaining the correlation between risk and return, he stated “in the first few years, I don’t mind losing money. If I do lose a lot from the investment I’ll switch over to less risky investments.” Since he was on the boarder of “high” tolerance and “moderate” tolerance, I would say he has “high” risk tolerance.

Age: 33
Expected retirement age: 65
Time horizon: 32 years (long-term)

Income and expenses: Tim currently makes $72,465 a year and his wife does not have an income. After taxes his monthly income is $4,540.31 and his total living expenses are approximately $3,408.00. After paying his expenses he has $1,132.31 to invest per month. After his daughter starts middle school he will have $1976.06 to invest per month and after they pay their mortgage off they will have $3,104.06 per month to invest in their retirement account.

Liquidity needs: There are no short-term needs for liquidity, but in 16 years he will need to have $30,000 available for his daughter’s college fund.

Taxes: His marginal federal tax rate is 25% based on the current tax schedule. Based on the filing jointly with his wife’s estimated income, their tax rate will remain at 25%.

Unique circumstances: Health: His health is very good and has full health benefits through Blue Cross/Blue Shield.
Current portfolio: His current portfolio consists of stocks, which is valued at approximately $28,038.
Wife’s employment: After his daughter goes to middle school in 11 years