Client Case Study

Caroline and Raj

Hi everyone Salena Kulkarni, here from Phoenix Wealth Group I wanted to share with you a story about Caroline and Raj, clients of mine who started working with me a couple of years ago both senior public servants. Caroline was actually earning significantly more than Raj but, a good solid household income they had two kids under the age of 10, they’d been fairly undisciplined around their financial management, but they had basically thrown every spare cash or spare dollar they had into their mortgage, so their mortgage was actually quite small but other than this they actually hadn’t really done any investing.

In terms of the problems that they were experiencing when we first started meeting though, they were very career-focused and I’d say very highly cautious around money and, it’s not so much that they had a lavish lifestyle but they definitely spent money quite freely and outside of the mortgage there was a lot of money being spent on things like holidays and meals out. The goals they had they would have articulated as very general and non-financial in nature but they were very clear as well unclear as well so that was something that they were a little bit confused about.

The impact of all of those things and the reason why they said they came to see me in the first instance was they felt that they were treading water. They were neither moving forward financially or from a wealth place nor were they moving backwards. They both had parents that had been quite poor and they’re feeling was they didn’t want that same experience for themselves. They were very clear that they wanted to invest in property and had been to a bunch of seminars offering them great deals but they didn’t actually feel that good about it so that was why they actually had come to see me.

In terms of a framework that we worked through with these guys again I leaned back to the Money Matrix™that I use with most of my clients, which is really about helping people personalize their approach to property investing. It takes into consideration their risk their goals their attitudes preferences and really tries to give them a business plan type framework so that they can execute it themselves if they want or with my help they can implement it step by step.

What I also helped them to do was articulate their goals a lot more clearly. They felt that their goals were non-financial in nature and more around how they were going to spend their time in 10 to 15 years, so really what I was able to do was link those back to a financial outcome so that they could get much clearer on where they needed to be financially in 10 years’ time. The action plan for these guys was very simple, we needed a framework to help them divert some of their premium income into investing.  We also built some strategies and scenarios using spreadsheets to really help them understand the options and the financial implications of going one particular way over another. In terms of outcomes we’ve now got an easy-to-understand plan which is going to get them to their goals in the least amount of time and they have to investment properties under their belt.

I asked these guys to actually reflect to me what did you guys get out of the experience of working with me, and they said that they had really hadn’t realized that just paying off their house was only going to create limited wealth, that they hadn’t understood that the cost of inaction for them was somewhere in the vicinity of one point six to two and a half million dollars over ten years, so lost wealth that wouldn’t have been created if they’d really just carried on as they were. And also they just really were quite surprised that the goals which they felt were non-financial actually did have a financial impact and actually did translate into me meaningful dollars in terms of day-to-day existence.

If I were to share with you some of the lessons that I observed with these guys and maybe some prescriptions for what you guys could do in the future, the most important thing to do to understand is that all goals have a financial implication whether it’s taking time out, even though they may seem non-financial many of them can actually have a financial bearing.

The plan that you implement when you’re looking at any kind of investing needs to be easy-to-understand easy-to-follow and leave you in the driver’s seat. And finally,  I think it’s really important to understand that when you don’t take any action that in itself can actually have a huge cost.

If you’d like any more information about anything that I’ve spoken about or you just want to touch base with someone who works in the space of property advice, then feel free to get in touch my personal email address is Salena@phoenixwealthgroup.com.au .

Looking forward to connecting with you in the future.

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