Does Naomi have $120,000 to invest?
Tuition of $120,000 is due in 18 months. Naomi wants six months of essential spending at $8,000 per month held as a reserve.
“Risk tolerance is more about the behavioral aspect.” (opens the source)
The question
Naomi Ruiz is a fictional 47-year-old resident of New Jersey, United States. Her spouse may receive a UK job offer in 18 months; no move is decided. This is an interview practice packet, not a plan for a real person.
| USD | |
|---|---|
| Cash | 120000 |
| Diversified investment accounts | 600000 |
| Listed employer shares | 300000 |
Account types, holdings, ownership, tax basis, restrictions and liabilities are not yet supplied.
| Value | |
|---|---|
| Tuition (USD) | 120000 |
| Essential spending (USD per month) | 8000 |
| Reserve months | 6 |
Six months is Naomi’s stated preference, not a universal reserve rule.
“Give your next question or action, and explain why.”
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A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: Reconcile the cash need
What would you do here? Open the move you’d make.
Keep the two needs separate
The strong move. The same dollars cannot fund both tuition and a reserve.
Treat tuition as already funded
Tempting, but it misses something. The $120,000 tuition payment would use all current cash and leave no chosen reserve.
See how a strong candidate says it
“The reserve is $48,000. Tuition plus the reserve needs $168,000, leaving a $48,000 gap against today’s cash.”
Why it works: The same dollars cannot fund both tuition and a reserve.
Step 2: Ask about future cash
What would you do here? Open the move you’d make.
Check future saving and obligations
The strong move. A later reveal of $4,000 monthly saving for 12 months supplies $48,000 arithmetically.
Immediately sell employer shares
Tempting, but it misses something. A sale could be unnecessary if verified future saving funds the gap. Taxes and trading restrictions also remain unknown.
See how a strong candidate says it
“What after-tax saving can you sustain before tuition is due, and what other payments compete with it?”
Why it works: A later reveal of $4,000 monthly saving for 12 months supplies $48,000 arithmetically.
Step 3: Name the concentration
What would you do here? Open the move you’d make.
State the denominator
The strong move. The denominator changes the percentage; both need a label.
Say one-third of all assets
Tempting, but it misses something. One-third uses the $900,000 investment subset. Including cash gives 29.41%.
See how a strong candidate says it
“Employer shares are 29.41% of known financial assets, or 33.33% of investments excluding cash.”
Why it works: The denominator changes the percentage; both need a label.
Step 4: Explain a stress
What would you do here? Open the move you’d make.
Connect the loss to goals
The strong move. This is a scenario, not a prediction or maximum loss. Ask what it would prevent the client from doing.
Promise that prices recover
Tempting, but it misses something. A hypothetical stress is not evidence of the timing or certainty of recovery.
See how a strong candidate says it
“A 20% loss on $600,000 and 50% on $300,000 would lose $270,000. Known assets fall to $750,000, with cash unchanged.”
Why it works: This is a scenario, not a prediction or maximum loss. Ask what it would prevent the client from doing.
The answer, in short
- Decision
- Do not label all the cash available to invest.
- Because
- The dated needs exceed cash by $48,000 before future inflows.
- What would change it
- Verified saving, other bills, restrictions and the client’s priorities may change the funding plan.
Common traps
- The $120,000 tuition payment would use all current cash and leave no chosen reserve.
Check your answer
- I calculated the reserve and gap.
- I asked about future saving.
- I labelled the concentration base.
- I separated stress from a forecast.
Last reviewed Nov 10, 2026