This is the second in our series of case studies looking at why people come looking for advice, and how we are able to assist.
Rebecca is a neurosurgeon in private practice earning $1.2 Million p.a. She is married to Stephen, a marketing consultant earning $100K through his own business. Stephen’s work is structured so he is able to look after their family and ensure everything runs smoothly, allowing Rebecca to primarily focus on her work.
They have two sons and one daughter in high school in years 11, 9 and 8. The children attend SCEGGS Redlands.
Their home is valued at $4 Million and the mortgage has been paid off. Both are making the maximum Concessional Superannuation Contributions, and have accumulated $900,000 and $600,000 respectively. They have two investment properties valued at $850K and $730K with total debt of $400K. They have direct shares and managed investments of $500K.
Looking towards the end, Concerned can’t afford it
Rebecca and Stephen have concerns around how long Rebecca can maintain her current workload. They are happy with the assets they have accumulated but have no real idea of what they need in order to be financially secure. While they are enjoying a good lifestyle now, they worry that they are not saving or investing enough to ensure they can maintain this when Rebecca reduces her workload and eventually stops altogether.
They wanted help in determining the level of investment assets required to maintain their current lifestyle when Rebecca’s income stops, and develop a strategy for reaching this.
How things changed…
What we did for them:
- We helped them clarify the things that are most important for them to be able to do both now and when Rebecca stops working. With this information we were able to develop a model showing how much money they needed to have in order to be confident that they would not run out in retirement, and a strategy for building these funds.
- We simplified their investment portfolio and made the ongoing management of it easier for them. We also put in place a disciplined savings strategy to add to this, and ensure their income was not just spent on their lifestyle
Outcome: Financial goals and clarity
We were able to develop a model for Rebecca and Stephen which showed them how they could maintain their lifestyle when Rebecca stopped working, provided they focussed and saved sufficient money now. This eliminated the guilt (about spending levels) and financial worries they had been carrying, while they were also able to minimise the time spent on managing their finances.