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Case Study Essay We have a couple in their mid forties. Christopher works in the media and earns $135,000 p. a. before SGC and salary sacrifices an extra $10,000 p. a. His wife Anne works in IT and earns $145,000 p. a. before SGC and also salary sacrifices an extra $10,000 p. a. Next month Anne is to receive a bonus of $15,000 which she is planning to contribute to super as a concessional contribution. They bought their home 2 years ago with a mortgage of $1,250,000. The home is now worth ,450,000. The mortgage is a standard principle and interest loan over 25 years and costs them $7,491 per month. They have four children: a 19 year old, a 16 year old, a 14 year old and a 10 year old. The three youngest go to a private school costing $60,000 p. a. There are 4 terms in the year and the fees are due at the beginning of each term. A new term commences next month. The 19 year old is apprenticed to a local restaurant and is training as a chef. He earns $16,500 p. a. before SGC and works an average of 120 hours per month and goes to college. Christopher and Anne have their own Self Managed Superfund. Christopher has $175,000 in the fund and it is invested in cash. Anne has $180,000 in the fund and it is invested in a listed debenture issued by XYZ Ltd, a large property development company. Over the years Christopher and Anne have tried to diversify and have the following investments: 3 years ago they used a margin loan of $135,000 to purchase 90,000 $2 shares in a newly listed mining company. Unfortunately in the last day or so the shares have fallen in value and are now only worth $1. 0 each. The mining company does not pay a dividend. 4 years ago they purchased, as joint tenants, an apartment/unit for $450,000 by way of a Line of Credit for $450,000 at 5. 45% p. a. The unit is managed by an agent and they receive $500 per week as rent. The agent has told them it is now worth $585,000. When Christopher’s father died 4 years ago Christopher inherited $35,000 which he used to purchase a listed debenture. The debenture pays 6. 5% p. a. on a quarterly basis and matures in exactly 12 months time. The current market for the debenture is 5. 75%. They have a joint savings account with $5,000 for emergencies. He has a savings account for $7,000. They have 3 personal loans: Payout of $29,196 9. 00% p. a. 4 years to maturity. No early termination fee. Payout of $11,902 8. 25% p. a. 2 years to maturity. No early termination fee. Payout of $6,705 8. 65% p. a. 1 year to maturity. $550 early termination fee. Their credit card has an outstanding amount of $35,560 with a maximum of $40,000 and they make the minimum payment of 3. %. They are concerned that although they feel they should be doing better the credit card keeps getting worse each month and that schools fees are due for next term and they do not know where the money will come from. Anne’s mother has asked Anne to be executor of her will. The mother has been diagnosed with an inoperable brain tumour and has been told that towards the end she will not be able to communicate. Both David and Jennifer have wills they executed prior to their marriage. Neither has been married before.