Damien Duff’s Personal Financial Plan Harvard Case Solution & Analysis

Damien Duff’s Personal Financial Plan  Case Solution 

Current situation of Damien

As Damien was trying to plan the financial support from different loans and investment in his career, he decided to propose short term as well as long term plan for his life. The plan would last over the life time of Damien in his career, therefore in order to analyze the true worth of Damien, it has been concluded that the total value held will be 1,284,058 in the cumulated years given in the case. Therefore, it is determined that the average worth can be changed according to the time period of debt instruments held by Damien, which indicates that the payments can be delayed for future payments which will fluctuate the cash flow activities incurred in the case.

Therefore, in order to pay off the entire debt figure, Damien should go after the scenario one instead of other proposed scenarios. This indicates that the total debt ratio can be reduced and paid in the early years in order to reduce the size of the risk and increase the net income as well as interest received from the investment.

Analyzing debt instrument using 5 C analysis

Damien holds four types of debt over the life of the financial plan implemented by him, therefore every debt can be considered as different from others. Following are the classification of debt held by Damien to support the financing activities over the life time period.

Student loan

Before looking for the financial plan, Damien had acquired the student loan in the early years of education, which was the subject to support the financial need through the educational period. After the completion of academic qualification, Damien was subjected to pay the loan in order to rebalance its financial needs. Therefore, he had decided to invest in the shares of different companies in order to receive interest from them and to pay back the entire student loan as early as possible. Therefore, this loan was not big in the size and shows that it was less risky because of the less payments to recover.

Car Leases

In the early stage of middle financial planning at the age of 30, Damien had decided to acquire the car on lease terms in order to enjoy the life with his wife full of joy and happiness. Therefore, he planned to lease out every car for five years of period and could change after the maturity of every period. Now this type of debt instrument was somehow risky as it shows heavy payments on regular basis however, it was not subject to collateral as compared to the fixed asset loan.

Mortgage loan

The loan can be considered as the most risky for Damien as it covered the collateral of something precious given by him, therefore he had decided to recover such loan as early as possible because if the loan would not be covered at the maturity period,then the whole property could be acquired by the lender. Thus, it was the most risky loan for the Damien to cover in the mid stage of financial plan.

Emergency loan

However, everybody does not follow the exact figure of proposed financial plan, which means that if the proposed plan has been taken by anyone then it may not provide the exact results in the same years and the probability of negative result will happen according to the situation. Therefore, in order to recover the extra loss or any significant event, Damien acquired the emergency loan in case of any immediate payments in the future. This loan can be considered as a secure loan for Damien as it will cover every loss associated with any uncertain event..............

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