David and Amanda: Building Wealth and Securing the Future

David and Amanda, a dynamic couple in their early 40s, were focused on enhancing their financial position while managing a busy family life. They owned a home valued at $1.4 million with a mortgage of $650,000 and had $150,000 in savings.

Both held high-income jobs, with David earning $220,000 and Amanda $160,000. Their superannuation balances were $350,000 and $180,000 respectively, and their share portfolio, based on David’s gut-feel selections, had underperformed the market and incurred high
trading costs.

With young children in primary school and plans to send them to private school, David and Amanda sought professional advice on how to grow their wealth, plan for retirement, and manage their current financial commitments effectively.

• Wealth Growth: Are they making the right decisions to accelerate their wealth accumulation?
• Retirement Planning: How can they start planning for retirement and ensure they have enough?
• Investment Strategy: How to improve investment returns and reduce debt?
• Family Protection: Ensuring they have the right insurance coverage and up-to-date wills.
• Balancing Enjoyment and Planning: How to enjoy their current lifestyle while optimizing for long-term financial success?

To address David and Amanda’s concerns and set them on a path to financial stability and growth, we implemented a strategic plan:

1. Optimizing Cashflow: We identified their surplus cashflow and directed it into a long-term investment account, including a capital contribution of $150,000 from their savings. This account featured regular savings and dollar-cost averaging to build a fund specifically for their children’s private school fees. This structure enabled access over money at any time.
2. Superannuation Boost: We recommended increasing contributions to their superannuation via salary sacrifice, taking advantage of tax benefits while being mindful of contribution caps. This approach also included developing a diversified investment portfolio for their super funds, focusing on growth assets for long-term performance.
3. Investment Strategy: A new diversified investment portfolio was created to replace their underperforming share investments. This portfolio was designed to maximize growth while managing risk.
4. Debt Management: David and Amanda purchased an investment property, using debt against the family home to create tax-deductible debt. This approach included directing surplus funds towards reducing the family home mortgage and maximising tax-deductible debt.
5. Insurance and Estate Planning: We reviewed and updated their insurance coverage to include life, TPD, and income protection insurance. Additionally, we ensured their wills and power of attorney documents were current to safeguard their children’s future.
6. Home Loan Restructuring: We restructured their existing mortgage to secure a lower interest rate and increased their repayments, accelerating debt reduction.
7. Lifestyle Budget: A budget was developed to allow for family holidays of $15,000 per year, balancing enjoyment with financial planning.

• Significant Wealth Growth: The strategy is projected to deliver substantial growth over the next 10 to 15 years, with a clear path to financial independence by age 60.
• Enhanced Retirement Planning: David and Amanda now have a solid plan for retirement, with options to retire earlier if desired.
• Tax Efficiency: Implementing salary sacrifice and tax-deductible debt has resulted in significant tax savings.
•  Improved Investment Returns: The new diversified portfolio and strategic investments have positioned them for better financial returns.
• Clear Financial Plan: They have a comprehensive budget and a clear plan for the coming years, including professional management of their investments.
• Balanced Approach: They enjoy their current lifestyle while preparing effectively for their financial future, with a dedicated partner to keep them on track.