The document is a financial plan prepared by Eduardo Vargas, a financial planner at Investza, for clients Mr. and Mrs. Wilkinson. It includes a net worth statement, annual cash flow statement, analysis of assets and liabilities, annual living expenses, and financial ratios for the Wilkinsons. The financial plan was commissioned to help the Wilkinsons achieve their financial goals through retirement planning, debt management, and investment strategies.

1. FIN 3330 – 001
Jason Bell
Brian Garay
Christian Garcia
Eduardo Vargas

2. 2
Table of Contents
About us…………………………………………………………………………………………………...........3
Engagement Letter…………………………………………………………………………………………...4
Year End Net Worth Statement.………………………………………………………………………..7
Annual Cash Flow Statement………..……………………………………………………….………….8
Asset, Liabilities and Net Worth…..………………………………………………………………...…9
Annual Living Expenses……….………………………..………………………………………..………..10
Financial Ratios…………………………………………………………………………………………………11
Fees & Important Documents…………………………………………..…………………..………….12
Refinance Mortgage…………………….………………………………………………………..…………13
Insurance and Debt Repayment……………………………………………………………..………..14
Works Cited………………………………………………………………………………………………….....15

3. 3
Since it’s founding in 1923, Investza and its people have helped redefine the meaning of
financial services. The firm has continually broken new ground in advising our clients on
strategic transactions, in pioneering the global expansion of finance and capital markets,
and in providing new opportunities for individual and institutional investors.
Investza is a financial firm that provides both independent and objective financial
advice, headquartered in Dallas, Texas. We work with customers on providing financial
planning and investment management services focused on helping our clients learn how
save for the future, retirement planning, and getting them out of debt.
At Investza, we work with everyone from business owners, executives, and physicians all
over the US, providing them with services needed to get their lives more financially
secure and stable.
Contact us:
4514 Cole Avenue, Suite 600,
Dallas, TX, 75205
Tel: (972) 923-1934
Fax: (972) 923-3942
Jason Bell
President/ CFO
Phone: (214) 501-3359
jasonbell@investza.com
Brian Garay
Vice-President/ Portfolio Manager
Phone: (631) 212-1923
briangaray@investza.com
Christian Garcia
Director of Operations
Phone: (214) 990-5623
christianX@investza.com
Eduardo Vargas, CFP®
Financial Planner
Phone: (214) 589-8395
eduardovargas@investza.com

4. 4
Eduardo Vargas, CFP®
Investza
4514 Cole Avenue, Suite 600,
Dallas, TX, 75205
October 1, 2014
Mr. & Mrs. Wilkinson
4015 Beverly Drive
Frisco, TX 75043
Dear Mr. & Mrs. Wilkinson:
Thank you for the opportunity to meet with you. I welcome the opportunity to work
with you as your financial planner. This engagement letter outlines the specific terms of
the financial planning engagement between:
EDUARDO VARGAS CFP®, TODD and SARAH
If the scope or terms of the financial planning engagement change, they should be
documented in writing and mutually agreed upon by all parties to the engagement.
Please be assured that all information that you provide will be kept strictly confidential.
During the financial planning engagement I may, on occasion, be required to consult
with other third-party professionals at which time I would obtain your written
permission to disclose your personal information.
As discussed during our introductory meeting, this engagement will include all services
required to develop a financial plan. These services will specifically include:
 Reviewing and prioritizing your goals and objectives.
 Developing a summary of your current financial situation, including a net worth
statement, cash flow summary, and insurance analysis.
 Reviewing your current investment portfolio and developing an asset
management strategy.
 Developing a financial management strategy, including financial projections and
analysis.
 Completing a retirement planning assessment, including financial projections of
assets required at estimated retirement date.
 Assessing estate net worth and liquidity.

5. 5
 Identifying tax-planning strategies to optimize financial position.
 Presenting a written financial plan that will be reviewed in detail with you. It will
contain recommendations designed to meet your stated goals and objectives,
supported by relevant financial summaries.
 Developing an action plan to implement the agreed upon recommendations.
 Referral to other professionals, as required, to assist with implementation of the
action plan.
 Assisting you with the implementation of the financial plan.
 Determining necessity to revise your financial plan.
This will be an on-going professional relationship. At a minimum, we will meet on an
annual basis to ensure the plan is still appropriate for you. Either party may terminate
this agreement by notifying the other in writing. Any fees incurred prior to date of
termination will be payable in full.
My services will be charged on a flat-fee basis of $250 an hour. We agreed on a fee of
$2,000 for the first year of service. This includes development and delivery of your
financial plan, unlimited email communication and a review meeting in November 2014.
Please provide a check for $100 with a signed copy of this engagement letter. An
additional $350 will be billed at the end of December. The balance will be payable to
Investza. You agree to pay any outstanding charges in full within 15 days of billing.
Please make checks payable to INVESTZA.
Please be advised that I do not receive a referral fee from any other professionals to
whom you may be referred.
In order to ensure that the financial plan contains sound and appropriate
recommendations, it is your responsibility to provide complete and accurate
information regarding pertinent aspects of your personal and financial situation
including objectives, needs and values, investment statements, tax returns, copies of
wills, powers of attorney, insurance policies, employment benefits, retirement benefits,
and relevant legal agreements. This list is not all-inclusive and any other relevant
information should be disclosed in a timely manner. It is your responsibility to ensure
that any material changes to the above noted circumstances are disclosed to me as your
financial planner on a timely basis since they could impact the financial planning
recommendations.

6. 6
I have no known conflicts of interest in the acceptance of this engagement. I commit
that I will advise you of any conflicts of interest, in writing, if they should arise. I
acknowledge my responsibility to adhere to the standards established in CFP Board’s
Standards of Professional Conduct. This includes placing your interest ahead of my own
when providing professional services. In addition, since this engagement includes
financial planning services, I am required to act as a fiduciary as defined by CFP Board.
You can learn more about CFP Board’s ethical requirements at www.CFP.net
I look forward to working with you and helping you reach your financial goals.
Sincerely,
Eduardo Vargas, CFP®
CFP®
Professional:EduardoVargas Client:ToddWilkinson
I accept the termsof thisengagementletter. I accept the termsof thisengagementletter.
_________________________________ _________________________________
Client:SarahWilkinson
I accept the termsof thisengagementletter.
_______________________________

7. 7
Current Assets Current Liabilities
JT Cash & Checking $2,000 JT BB National CC $5,237
JT Savings Account $2,300 JT Sears CC $6,200
JT CD Maturing in 6 months $3,000
Total Current Assets $7,300 Total Current Liabilities $11,437
Investment Assets Long-Term Liabilities
T 401k $108,657 JT Infiniti Auto Loan $42,000
S 401k $65,581 T Student Loan $37,380
T IRA $4,295 JT Jeep Auto Loan $8,500
JT Brokerage Account $3,700 JT Harley Auto Loan $18,000
Total Investment Assets $182,233 JT Personal Residence$178,000
Total Long-Term Liabilities $283,880
Personal Use Assets
JT Primary Residence $271,980
JT Furniture $12,300
T $3,500
JT Auto#1, Harley Davidson $21,000 Total Liabilities $295,317
JT Auto#2, 2010 Infiniti E35 $38,500
JT Boat $8,000
JT Auto#3, 2007 Jeep Patriot $9,000
Total Personal Use Assets $364,280
Total Assets: $553,813 Net Worth: $258,496
JT - Jointly Owned
T - Todd Owns
S - Sarah Owns
Mr. and Mrs. Wilkinson
2013 Year-End Net Worth Statement

8. 8
CASH INFLOWS Totals
Salary - Husband $96,000
Salary - Wife $72,000
Dividend/Interest Income $1,440
Total Cash Inflows $169,440
CASH OUTFLOWS
Savings
Dividend/Interest Reinvestment $1,440
Husband's Roth Contributions $2,760
Husband's 401 (k) Contribution $3,600
Wife's 401 (k) Contribution $3,600
Cash Savings Contribution $7,200
Total Savings $18,600
Debt Payments
Primary Mortgage $21,324
Infiniti Loan $5,376
Jeep Auto Loan $3,360
Harley Davidson Loan $2,100
Husband's Student Loan $3,360
Sears Credit Card Payment $2,400
BB National Credit Card Payment $2,340
Total Debt Payments $40,260
Living Expenses
Alarm System $468
Cable $1,260
Cellphone $1,560
Charity $4,200
Child Care $14,400
Club Dues $1,800
Dining Out $4,800
Dry Cleaning $1,920
Entertainment $4,800
Gas $3,600
Groceries $6,000
Hobbies $3,600
Home Repairs $2,400
Internet $1,200
Landscaping $3,600
Maid $4,800
Parking and Tolls $540
Water $960
Total Living Expenses $61,908
Insurance Payments
Auto Insurance $3,216
Life Insurance $1,200
Total Insurance Payments $4,416
Taxes
Total Taxes (FICA AND INCOME TAX) $9,600
Total Taxes $9,600
Total Savings, Expenses and Taxes $134,784
NET DISCRETIONARY CASH FLOW $34,656
Mr. and Mrs. Wilkinson
Annual Cash Flow Statement

9. 9

10. 10
Annual Living Expenses

11. 11
Current Ratio 17% Good
Housing Ratio 1 15% Very good
Housing Ratio 2 25% Very good
Debt to Total Assets Ratio 56% Weak
Net Worth to Total Assets Ratio 44% Good
 Current Ratio – Current Assets divided by Current Liabilities
o 17% - Good
 Having a current ratio of 17% is good in that you currently have in
cash or its equivalent, enough funds to cover 17% of your total
debt payments due within the next 12 months
 Increasing this ratio involves paying off debt and holding cash in
your accounts
 Housing Ratio 1 – P.I.T.I (Mortgage principal, interest, taxes, and insurance)
divided by Monthly Gross Income
o 15% - Very Good
 Banks use this number to determine whether or not to loan money
to purchase a home
 Anything less than 28% is acceptable
 Housing Ratio 2 – (P.I.T.I + Other Debt Payments) divided by Monthly Gross
Income
o 25% - Very Good
 Should an individual pass the first housing ratio test they can move
on to the next test
 Anything less than 36% is acceptable
 Debt to Total Assets Ratio – (Current Liabilities + Long-Term Liabilities) divided
by Total Assets
o 56% - Weak
 This represents the total amount owed in relation to the amount of
Total Assets
 Liabilities equal 56% of Total Assets
 Net Worth to Total Assets Ratio – Total Net Worth divided by Total Assets
o 44% - Good
 This represents the total Net Worth in relation to the amount of
Total Assets.
 Net worth represents 44% of Total Assets

12. 12
Fees
Listed below, are the ways in which a financial planner can be compensated:
 Commission only
 Commission and fees
 Fee-only
 Hourly fee
 Flat fee
 Retainer Fee
Based on your needs, the service of the plan is $2,000. If you would like to arrange a
meeting time other than the agreed upon time, the rate is $250 per hour.
Fiduciary responsibility is to act on behalf of the client who requires great trust,
honesty, and loyalty and also to act in the best interest of the client. It is very important
because client information is very confidential. It is also important to act in the best
interest of the client so the client will meet their financial goals.
Important documents
Below are some of the recommendations that we suggest on how to handle important
and confidential records.
Reduce your pile of documents
 Get rid of bills and credit card and banking statements that are more than one
year old, only keep the ones that you need for tax purposes
 Throw out any expired warranties
 Your tax return is very important. Keep your tax return and any supporting
documents for seven years; you might need it in the future.
Create a storage system
 Put any important documents in a lockable, fire-proof, and water-proof box,
including:
 Birth and marriage certificates
 Passports
 Social Security cards
 Wills, deeds
 Vehicle titles, copy of any current insurance
 Photocopy of your driver’s license
 Separate tax materials and keep another folder for anything needed for next
year’s tax return as well as one for the older returns separated by year.
 Consider a safe deposit box and use it for items that you wouldn’t need to access
frequently such as executed wills.

13. 13
Current Mortgage
$178,000; 6.6% 22 years, 2 months (approx.)
PI - $1,277.32
TI - $499.68
Interest: $160,687.25
Option 1 With added refinance cost:
$178,000; 4.2%; 15 years $183,500; 4.2%; 15 years
Monthly Payment: $1,334.56 PI - $1,375.76
Total Interest: $62,220.01 TI - $499.68
Total monthly payment: $1,875.44
Total interest: $64,145.54
Option 2 With added refinance cost:
$178,000; 4.6%; 30 years $183,500; 4.6%; 30 years
Monthly Payments: $912.51 PI - $940.70
Total Interest: $150,502.51 TI - $499.68
Total monthly payment: $1,440.38
Total Interest: $155,152.87
We first need to decide if we need to roll the refinance cost of $5,500 into the new loan
or if you can pay $5,500 up front. Your current emergency fund ratio is 3.03. If we were
to use $5,500 of your current assets the emergency fund ratio would drop down to 2.25.
Since their emergency ratio is barely above 3 we suggest rolling the cost of refinancing
into the new loan. If something dramatic happens to affect your income you would only
be able to cover living expenses for less than 3 months.
Next, we are going to look at the housing ratios for the two options, which includes the
refinancing cost in the loan amount. The 30-year, 4.6% interest option assumes a
monthly payment of $1440.38, which includes principal, interest and taxes. The 30-year
option has a basic housing ratio of 10.2% and a broad housing ratio of 21.3%. You have
the means to afford this mortgage and remain a very viable option. We next want to
look at the 15 year, 4.2% interest refinance option assuming a monthly payment of
$1875.44. The basic housing ratio is 13.2% and broad housing ratio is 24.5%. You can
afford to refinance for 15 yrs at a lower interest rate. If they refinance for $183,500, 15
years at 4.2% interest they could potentially be saving close to $95,000 in total interest
until the house in paid off. If you only made the minimum monthly payments they
would have the house paid off 7 years earlier. To take advantage of this refinance option
we will need to adjust your budget and allocate an additional $98/month to the
mortgage expense.

14. 14
Todd and Sarah are insured by a $50k/$100k/$50k policy with a $500 deductible. What
this means is that they have a $50,000 limit for each person for bodily damage,
$100,000 total for all individuals making a claim, and $50,000 for property damage
caused during an accident, with the first $500 due by the insured per claim.
By allocating $300 a month, you will be able to save $6,254.31 on the debt paid while
also saving 3 years and 9 months on the time it takes to pay off the debt as well. By
paying off the debt faster, you will have saved well over 6k and also pay the debt off
almost 4 years ahead of time by allocating the $300 than you would by paying the debt
off without allocating the money the extra money to the debt.

15. 15
Works Cited
Cleaver, J. (2014, 02 18). A Guide to Financial Advisor Fee Structures. Retrieved 10 04,
2014, from http://money.usnews.com/: http://money.usnews.com/money/personal-
finance/financial-advisors/articles/2014/02/18/a-guide-to-financial-advisor-fee-
structures
Dalton, M. A. (2013). Fundamentals of financial planning. St. Rose, LA: Money
Education.
Dill, K. (2014, 06 13). The best and worst states to make a living in 2014. Retrieved 10
01, 2014, from finance.yahoo.com: http://finance.yahoo.com/personal-finance/
Paragon Financial Advisors. (2014, 07 01). What is a Fiduciary And Fiduciary Duty?
Retrieved 10 01, 2014, from http://www.paragon-adv.com/: http://www.paragon-
adv.com/fiduciary-financial-advisor.html
The Wall Street Journal. (2011, 07 5). How To Manage Important Documents. Retrieved
09 29, 2014, from merketwatch.com: http://www.marketwatch.com/story/how-to-
manage-important-documents-1307549338283