How to Maximize Wealth Growth and Accumulation to Save Financial Issue Mr. Piyau
Number of wealthy people increases significantly, in which their net worth is around or more than US$ 1 million. This number forecasted will increase faster than economic growth in Indonesia. These wealthy people facing kinds of financial issues such as how to maintaining their asset, protect their...
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| Main Authors: | , |
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| Format: | Theses and Dissertations NonPeerReviewed |
| Published: |
[Yogyakarta] : Universitas Gadjah Mada
2013
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| Subjects: | |
| Online Access: | https://repository.ugm.ac.id/118303/ http://etd.ugm.ac.id/index.php?mod=penelitian_detail&sub=PenelitianDetail&act=view&typ=html&buku_id=58249 |
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| Institution: | Universitas Gadjah Mada |
| Summary: | Number of wealthy people increases significantly, in which their net worth is
around or more than US$ 1 million. This number forecasted will increase faster than
economic growth in Indonesia. These wealthy people facing kinds of financial issues
such as how to maintaining their asset, protect their wealth from the inflation and so on.
In this research Mr. Piyau having issues related how to maximizing his assets since most
of them are invested into less liquid and un-productive property. In the other side, this
condition bring the client missing opportunity to invest his wealth within more liquid
instrument, in which higher return might can be received. This study focuses on the
strategy of maximizing wealth growth for a HNWI client based on the client�s risk
tolerance, financial data, financial goals constraints, because wealth management is a part
of financial management which is personally appointed to the people at least in term of
maintaining and advising net worth assets, meaning the recommendation given to the
client wished not only fulfill the expected return but also the degree of risk that the client
can tolerate. The recommendation should provide solution to the client�s problem in
dealing with shifting his less liquid and unproductive assets in to more profitable
investment. From client�s financial data there are financial weaknesses that can be
identified. Financial issues that can be identified are classified into a weakness of client�s
balance sheet and statement of cash flow, in which the result of low diversified types of
assets and those assets have positive correlation so that return of portfolio cannot be
maximized.
Furthermore, in term of investing his money the client never and do not know
about his personal risk profile/tolerance so his financial asset only invested on saving
account. Furthermore, this condition actually not appropriate for the person who has
conservative moderate risk tolerance. There are three alternatives proposed by the author
to the client. The three alternatives provide higher percentage of return compared to
current wealth portfolio�s performance and has followed the financial asset proportion
defined by Wealth Management software that is adjusted to client�s risk profile. After
having a discussion with the client, the most preferable alternative is alternative number 3
since the alternative number 3 not only has the best performance based on coefficient of
variation and Sharpe ratio but also provides highest net worth growth. Client�s net worth
after one year of implementing alternative number 3 will increase became
Rp16,637,195,000.00 or in the other word increased by 17.88% from current net worth,
while client�s surplus after one year of implementing alternative number 3 would like to
increase his surplus up to will increase to Rp611,475,000 or increased by 88.274%. |
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