Business

I recently graduated with my Masters in social work. I am 33 years old and currently living in the US. I would like some financial advice applicable to my current standing and future goals.

I have a US student loan which I'll need to start repaying in six months. I plan to work for two years there and then commence my doctorate programme.

I currently have three life insurance policies in Jamaica, two with an investment portion, two JMMB accounts - one Save Smart and the other a five-year tax-free fund.

This is my current portfolio. I wish to expand it as I would like to purchase land and construct a home in Mandeville, finish up school, and plan for retirement and a family.

What would be your advice for the short to long term?

- Stacia

You seem to know what you want but need a properly structured plan to help you accomplish your goals. Having recognised that, you need to make that plan and stick to it.

One of the most important elements of any plan is the time line set for its achievement. The absence of timelines for some of your goals is the major concern I have with your plan; it is not too late to set them, however.

You have not put me in a position to say if your goals are feasible based on your current financial position because you have not said what the value of your savings and investments is; neither have you said what type of investment funds are linked to your insurance policies nor what your goals are likely to cost.

Your current priority is your education. That is good. Education is a good investment. It can generate significant returns by enabling you to earn very meaningful incomes in the future.

I am not sure if you were able to earn while pursuing your Masters. Nonetheless, you were able to take care of such financial commitments as your insurance and savings. Do you plan to earn while completing your doctorate?

The two-year period of employment you have in your plans should help your financial position.

Organise your affairs so that you will not find it necessary to encroach on the financial resources you have here. Apart from education, there is at least one goal that you are working on: retirement.

Your insurance policies can generate very meaningful value over the long term and, like the five-year instrument you have mentioned, they are tax-advantaged. This can make a significant difference to your long-term returns.

You have not said, though, if they are linked to interest-earning or capital growth funds. The latter expose you to more risk but have more potential for high returns. Insurance, though primarily for protection, has the potential to provide a good pool of funds for retirement.

serious challenges

When do you plan to return to Jamaica? It would be helpful to have a time at the forefront of your mind. Knowing where you want to buy land is good because it enables you to have an idea of its cost. It is generally cheaper to build a house than buy one, though it may come with serious challenges. Do you plan to buy the land from your resources, saving borrowing for construction?

Remember you can contribute to the National Housing Trust as a voluntary contributor.

Recent changes require voluntary contributors to contribute for a minimum two years to be eligible for a loan. If you were a con-tributor before moving to the US, you would be required to make fifty-two weekly contributions immediately before applying, but you must register as a voluntary contributor.

The Trust now lends as much as J$4.5 million to individuals and if you are able to start your family before you are ready to apply you and your spouse could conceivably borrow twice that amount.

You must create a meaningful cash-flow statement for the next five years or so to determine if your plans are feasible. Continue to take advantage of opportunities to save taxes, and balance capital preservation and generating interest income with growing your capital.

Oran A. Hall, the principal author of "The Handbook of Personal Financial Planning", offers free counsel on personal financial planning.finviser.jm@gmail.com