Mark & Brylie Case Study - Young Professionals
Background:
Meet Mark and Brylie, a young professional couple seeking financial guidance to make informed decisions about their future. Their primary concerns included starting a family and managing their finances with Brylie potentially leaving her job. Additionally, they had inherited an investment property and were unsure about the performance of their superannuation funds.
When we initially met Mark, in his early forties, and Brylie, in her mid-thirties, they were enjoying a substantial joint income with minimal expenses and no children. Mark had his retirement savings in a Self-Managed Super Fund (SMSF), while Brylie's super was held in an industry fund. At the time of our initial consultation, Brylie and her sister had recently inherited their mother's property, adding complexity to their financial situation due to her sister's financial constraints and interest in using the property for mortgage assistance.
Despite residing in rental accommodation, Mark and Brylie had aspirations of purchasing a family home before starting their family.
Overview:
Our principal adviser, Andre Dirckze from Wealth Effect Group, provided Mark and Brylie with a safe space to voice their financial concerns. While they eagerly anticipated becoming parents and owning a home, they also felt hesitant and anxious about making decisions that could affect their financial well-being. They were seeking strong leadership and financial guidance to make well-informed choices. Andre recommended a comprehensive review of their financial situation, considering both short-term and long-term goals.
Our Process:
Andre initiated meaningful discussions to help Mark and Brylie clarify their objectives. For example, he explored whether Brylie planned to take extended maternity leave and if the couple could sustain their lifestyle on Mark's income alone. They expressed a desire to function as a single-income family. Using this information, Andre helped them determine the size of the loan they could manage on one income and the cash flow required to maintain their current lifestyle.
Andre didn't simply propose the obvious solution of selling the inherited property to boost their home loan deposit. He recognized the emotional attachment the sisters had to the property and presented three scenarios for their consideration: continuing to rent the property, selling it, or buying out Brylie's sister's share.
In addition to addressing the property issue, Andre reviewed Mark and Brylie's insurance policies. While Brylie relied on her super fund's default insurer, Mark had different arrangements. Andre tailored a personalized insurance solution, ensuring affordability, tax efficiency, and adequate coverage. He also simplified the policy terms and conditions, providing Mark and Brylie with confidence in their protection and potential claims.
Mark and Brylie also sought a more suitable retirement savings strategy. As an accredited SMSF adviser, Andre reviewed Mark's super strategy and Brylie's industry fund. His analysis showed that consolidating Brylie's super into Mark's SMSF would reduce administrative fees and offer a consolidated investment strategy aligned with their long-term goals, along with estate planning flexibility. Additionally, Andre guided them in relinquishing some fund shares to reduce portfolio risk, repay SMSF investment debt, and increase available cash.
The Outcome So Far:
Through financial modeling, Mark and Brylie identified a maximum mortgage amount that allowed them to comfortably live on Mark's income after starting a family. They have since purchased their first home and are now proud parents.
Regarding the inherited property, Brylie and her sister decided to sell it, and Mark and Brylie used the proceeds to reduce their mortgage.
As part of ongoing advice, Andre collaborated with Mark and Brylie to create an investment strategy that aimed to generate additional income, reduce Mark's tax liability, and build long-term wealth. Using the equity from their reduced mortgage, Andre facilitated the purchase of an investment property in Mark's name.
With their growing wealth and assets, both Mark and Brylie felt reassured by their well-structured personal insurance package, safeguarding their lifestyle and expenses in case of illness or injury. They also knew that Andre and the Wealth Effect Group team would assist them in securing their full entitlements in such circumstances.
Upon the birth of their first child, Andre emphasized the importance of estate planning to protect their assets for their son and future generations. Consequently, they engaged Wealth Effect Group to collaborate with an estate planning specialist to develop a comprehensive plan aligned with their overarching financial strategy.
In summary, Mark and Brylie expressed gratitude for Andre's insights, which empowered them to make financial decisions with newfound clarity. They credited Wealth Effect Group for enhancing their financial position, providing ample cash flow, boosting retirement savings, and implementing essential insurance and estate planning measures.
In Brylie's words:
"Andre helped us consolidate our financial position as a couple, giving us a clearer picture of our future possibilities."
"I wholeheartedly recommend Wealth Effect Group and Andre Dirckze. Andre's extensive knowledge and flexible approach, considering our busy schedules, reassured us. He took into account every aspect of our lives and helped us establish protective measures for our family's future."
