Lifestyle Financial Planning
As the name suggests lifestyle financial planning focuses on your lifestyle. Your financial needs and objectives are the cornerstone of our advice process and understanding you and what you ultimately want out of life helps us establish a plan for the future to realise your dreams. We have provided examples of how we work with our clients to help them achieve their goals and the value of professional advice in your life.
For additional information regarding Lifestyle Financial Planning please refer to this brochure.
Lifestyle Financial Planning for Mr & Mrs Simpson
Background
- Mr Homer Simpson, age 38, employed full time at local power plant earning $75,000 pa
- Mrs Marge Simpson, age 35, full time home duties
- Master Bart Simpson, age 12, at school and looking to enter the workforce asap
- Miss Lisa Simpson, age 10, at school and looking to go to college to study teaching
- Miss Magee Simpson, age 2, at home and parents would like Magee to go to college if she wants
- Clients are a balanced investor for medium term investments and growth for superannuation investments due to the length of time on the investment
- Clients want $5,000 or more held in savings account
| Assets | Liabilities | ||
|---|---|---|---|
| Value | Value | ||
| Home | $280,000 | Home Loan repaying $300 pw | $100,000 |
| Cars | $25,000 | ||
| Bank Account | $5,000 | Credit Card | $2,000 |
| College Fund, saving $100 pw | $15,000 | ||
| Superannuation | $50,000 | ||
| Contents | $50,000 | ||
| Total | $425,000 | $102,000 | |
Net Worth: $323,000
Financial Goals
- Help pay for Lisa and Magee's college expenses, costing $10,000 pa (current value) for 3 years each child.
- Purchase a new car in 4 years costing $20,000 changeover (current value)
- Homer wants to retire at age 60, clients don't believe they will receive any government pension and therefore need to have their own money to enable retirement.
- Maintain current lifestyle of spending $35,000 pa plus holidays of $3,000 pa
- Pay off housing loan as soon as possible, once housing loan is paid off save repayment for retirement.
Using the above goals and financial situation clients obtain the following result.
As can been seen from the above graph the Simpson's should be able to make retirement and will need to live off their principle in retirement. As long as Homer and Marge don't live past 73 or 70 respectively their current financial plan will work okay.
But Marge was not happy with Homer doing the financial plan so she visited MMW Financial to see if they could do any better.
From this visit the financial planner made some changes to their financial plan which still suited their financial goals and did not take away from their lifestyle. The outcome of the changes plan is as follows:
As can been seen using some Financial Planning on the Simpson's situation,
retaining their lifestyle and financial goals the Simpson's will achieve a better result and have more funds available at retirement.
They will retain their capital and live comfortably in retirement. They now have money to pass on to their children (Bart, Lisa and Magee) if they want to.
Get your own Lifestyle Financial Plan – contact MMW Financial now
The information presented in the above example is not intended to be advice. It does not take into consideration any particular person's personal circumstances, needs or objectives. Any reference to the reader's personal circumstances is entirely coincidental.We recommend you consult a qualified adviser before making any financial decision.
