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Mr & Mrs ‘Sold Up’, after grafting for over 30 years, had recently sold their business. Now aged 60, with no children, their primary concern was to ensure a high return on their capital.
Two different financial advisers had discussed various investment scenarios. Each of the advisers had put forward their recommendations based on the ‘risk/reward’ profile they had identified for the client.
To satisfy the requirement for a high return both advisers had recommended a fairly adventurous investment portfolio heavily weighted towards shares and other volatile asset classes.
However, before investing their money, Mr & Mrs ‘Sold Up’ were advised to speak to us by their accountant. We helped them identify the cost of their lifestyle over the remaining period of their life, allowing for inflation and the cost of possible long term care. We also discussed and included certain financial goals and objectives that would make their retirement more fulfilling and meaningful.
Using sophisticated financial planning software and financial modeling techniques our planner came up with some surprising conclusions. He was able to demonstrate that a return of just 1.5% above inflation would be sufficient to ensure they never ran out of money.
Our planner helped Mr & Mrs Sold Up understand their “number”. He helped them understand that there was absolutely no need for them to flirt with unnecessary risk. What they needed, in fact, was a lower return with more certainty in a tax efficient portfolio which would give them the peace of mind to enjoy their retirement without having to worry about the markets.
We saved them from the hefty, and unnecessary, capital loss they would have experienced if they had invested in volatile equities. Because they understood their number they made a much shrewder decision.
Mr & Mrs ‘Sold Up’ continue to enjoy their retirement and our planner continues to meet with them on an annual basis to review their “number”. More often than not the discussion involves how much more they can afford to spend to make the most of their carefree retirement.
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