Malik is forty-two years old and has worked for a sales company for over seven years. He took his current job after he completed his MBA (Master of...

In the scenario provided, Malik's short-term goals are to establish himself professionally within the business world, having completed his graduate work in Business Administration, and to assist his ailing mother financially. The scenario as outlined mentions that Malik's mother was diagnosed with an aggressive form of cancer, and that she is dependent upon her Social Security annuities to survive. Costs associated with catastrophic medical conditions, such as many forms of cancer, are astronomical and tax the resources of much more affluent individuals than is apparently the case with Malik's mother. Her medical bills, therefore, are proving extremely difficult to pay, and Malik wants to help his mother pay those bills. These, then, are his two main short-term goals. 

Malik's long-term goal provides the bulk of the information provided in the scenario. The scenario notes that he deposits 10 percent of his gross income into a retirement fund, and that the company for which he works matches those contributions up to the first three percent. This information is provided so that the student can arrive at the logical conclusion that securing a financially-comfortable retirement constitutes at least one of Malik's long-term goals.

Malik is already dedicating himself to certain of the activities needed to achieve his goals. His commitment to higher education, evident in his completion of the requirements for a Master's in Business Administration degree, constitutes an important step towards his short- and long-term goals. As noted, his contributions into his retirement account of 10 percent of his gross income is a very wise investment. The challenge, however, is to choose wisely the distribution of those contributions among the various investment categories generally offered by retirement fund managers. These categories, or options, include domestic and foreign stock markets, lower-yield but lower-risk money market options, and simple low-interest-bearing savings accounts. A prudent investor has a diversified portfolio so as to protect against dramatic perturbations in one or more of these categories. 

Not provided in the scenario is whether Malik has taken steps, if possible, to claim his mother as a dependent for tax purposes. Does he have a living father, and, if so, are his parents still married? If the father is deceased, and the mother is financially dependent upon Malik, then he can use that as a means of reducing his taxes, which would ease the burden on him of contributing to her medical expenses.

There are few situations more emotionally and financially draining than being the principal caregiver for a loved one. The scenario provides insufficient information, for example, are there siblings or other relatives who can help pay the medical bills for his mother? Assuming that Malik is an only child, contributing financially to his mother's medical care is very financially-burdensome, so he should arrange to set-aside a certain percentage of his net income for that purpose. It is possible that he will have to lower by two or three percent the amount of his contribution into his retirement fund, as the medical bills can otherwise prove impossible to pay. There is often a trade-off between short-term financial requirements or responsibilities and longer-term financial objectives. Malik has to sit down, do the math, and determine how best to balance near- and long-term obligations.