Meet Mr & Mrs G

Mr & Mrs G have always been organised with their finances, regularly putting spare monies away for their retirement and a rainy day.  It’s a good job too as, in 2010, that rainy day arrived.

As middle managers the pressure to perform and ‘keep the bosses happy’ grew so strong that it began to make Mrs G ill with stress.  Mr G had just retired early to pursue a more sedate lifestyle with a part time business so now they were worried about how their future would be affected if Mrs G stopped working too.

One of the main concerns was that Mrs G’s employers were refusing to pay her pension benefits until age 60 – 4 years away!  Another concern was that they had recently bought a 2^nd property to retire to and the issue of having two properties to maintain was also adding to their worries.

Their question was simple – if we don’t sell our current house and get Mrs G’s pension until age 60 do we have enough to leave our employment today, do the things we want to do and still not run out of money?

So we showed them the answer.....by building a lifetime cash flow forecast.

A lifetime cash flow forecast takes into account all of your financial circumstances so we can show you the reality of the financial future you are creating for yourself.  Cash flow modelling allows us to deliver the number one priority for clients – a clear and accurate picture of how you are going to get to a point where you never have to worry about running out of money.

Suddenly you can see it, understand it and believe it – because it’s based solely on the information you provide.

Let’s have a look at the cash flow forecasts for Mr & Mrs G if they told her boss to shove it!

As you can see from this chart Mr & Mrs G were right to believe that their income will not meet their expenditure and that they would have to start dipping into their savings.  However, by looking at this with a ‘bigger picture’ mentality we can see that this is only a short term problem as the cash injection from the sale of the property together with the fact that their income will be higher than their expenditure post 65.

Now, let’s look at this ‘big picture’ then by adding up all the blue, taking away all the red to see how their cash flow forecast looks-

The amazing thing about this is that, despite their deep concerns, it’s obvious that Mr & Mrs G have little to worry about.  In fact their cash flow shows that they’re problem is not worrying about running out of money, it’s dying with too much!

What do we mean by ‘dying with too much’?  It’s where you fail to do all the things you want to do in life, can afford to but leave the money to someone else so they can do it instead!

We also created a couple more scenarios to show Mr & Mrs G how their future would be affected with different expenditure assumptions and different investment returns etc.

The end result for Mr & Mrs G was something that a traditional ‘product salesman’ cannot deliver - peace of mind through seeing the long term effects of how you manage your money today. Not a product sales oitch in sight – just good advice focused on solving client’s main concerns.

Needless to say Mr & Mrs G are now happily retired and enjoying most of their time in their holiday home.

Lifestyle financial planning – it’s not about your money; it’s about your life.