Question

A wealthy philanthropist has heard about your financial skill and wants to give you a monetary gift to see how you would handle the money before choosing whether to have you manage more of their portfolio. Would you rather have $1,000 today or $5,000 in 6 months? What would you do with the money to demonstrate to the investor why you should be the one to handle their money? Explain the reason behind your strategy.

Answer 1

The Financial consultant should rather have $5000 after six months then $1000 today, taking the time value of the money into consideration.

Because that's a 400% return in holding period and 800% return per annum. Which is too good to be achieved by any investment vehicle.

After getting $5000, the financial consultant should look at the philanthropic interest of the wealthy philanthropist client and contribute to his philanthropic cause. It will ensure build good client relationship and wealthy philanthropist will gain confidence in the financial consultant that he is the right guy for the job.

Remaining amount should be invested diversified portfolio for example Equity Index, Bond or Gold. Whichever is performing well at the time and depending upon the circumstances.