Data and Solution

We want to have enough money to pay a down-payment of 15% (minimum) for a house. The places that we’re looking at all cost around $800,000, so we need to save up $120,000 for the down-payment. The house market has stagnated, so the prices aren’t expected to change in the next three years. We already have $80,000 saved up for a down-payment, and every year, we make an additional $10,000 to add to those savings. But, even with the additional $30,000, we’re still short of our goal. So, what can we do do get there?

Our options include a 1 year annual, non-redeemable GIC with an interest rate of 3.5%, a 3 year non-redeemable GIC with an interest rate of 4.2%, and stock investments. Of course, we can also use a standard savings account to help reach our goal. We can divide the money however we want, as well.

So, keeping our options and our goal in mind, this is my solution. During the first year, we can put $60,000 into a 3 year GIC. Then, we can put $20,000 towards stock investments. The interest rate for the 3 year GIC is 4.2%, so by the end of our first year, we’ll have $62,520 from the GIC. Now, let’s say that the stock market isn’t doing so well during the first year. We’re losing about 6.9%. So by the end of our first year, we’ll have $18,620 from our stock investments. We also earned ourself an additional $10,000 to add on. We’ll just keep that in a savings account. So, we have a grand total of $91,140 at the end of our first year. Obviously, we’re short by quite a bit. But now for the second year. The $62,520 should be going up because of our interest rate, so now we have $65,145.84 saved up from the GIC. The stock market’s doing better now, so we’re gaining 7.5%. So, by the end of our second year, we have $20,016.50 from our stock investments. We have another 10,000 to put into our savings account, giving us another 20,000 dollars, and bringing our grand total up to $105,162.34. And now for our third year. We have a total of $67,881.97 from our GIC. And this year, the stock market’s still doing quite well, so we now have $21517.74 from our stock investments. And at the end of our third year, we have another $10,000 to add to our savings account, bringing our total from our savings account up to $30,000. Add all of that together and you get our grand total of $119,399.71. We’re less than $1000 short of our goal by the end of our three years.

My Justification

I thought this solution would work out, even though it’s short of our goal. Why? Because this is only one outcome. Stocks aren’t all that predictable, after all. It’s hard to tell whether or not they’ll go up or down, but if they go up, then the risk is really worth it, in my opinion. After all, you can still earn a bit of money to reach your goal relatively quickly if you have less than $1000 left to acquire. And if the stock market’s doing very well, you might be able to make some extra money to keep.

Collaboration With my Group

Working with my group went pretty well. I’m honestly kind of surprised that I found it kind of nice, considering the fact that I normally don’t really enjoy group work all that much. My group members helped clear things up when I was confused or didn’t completely understand what we were doing. Most of us shared our jobs, too. Sometimes, I would calculate, sometimes another person would calculate, while someone else wrote down the calculations. We all contributed and brought up different solutions and ideas. I didn’t use any of the solutions that my group proposed, though. The solutions that we brought up all worked pretty well, but I wanted to try and come up with a solution that was unique to me. If I were to rate my ability to collaborate with my group members, I think I’d give myself a 3.

Core Competency Reflection

1. I can advocate for myself. When we were talking about making up our own solutions, other people took the lead. But, I also brought up what I thought was a good idea.
2. I can take on roles and responsibilities in a group. Everyone shared different roles while we worked. I was able to take my own role and be responsible while we were working together.
3. I can work with others to achieve a goal. When we were doing group work, we were all coming up with ideas and trying to make sense of the problem. I think that we all bounced off of each other pretty well, and that helped us reach our goal quickly.
4. I can reflect on my thinking. After the group work was finished each day, I often thought about what I had brought up and what I had done. I often thought about how I could’ve done things differently, and where I might’ve went wrong. I actively tried to understand what we were doing, and I actively reflected on my previous thought process when it came to the assignment given to us.