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Jack and Penny
Find out how we helped Jack and Penny when the unthinkable happens...
Jack (46) and wife Penny (45) ran a family business in Wollongong. They were raising a young family and trying to grow their business with some long hours and very hard work. Penny enjoyed working in the business in an administrative role, and Jack was the real driver of new business.
Although the business was starting to see some good returns through repeat business and referrals, they were not saving much for their retirement, nor had they given much thought to what might happen to their family should something happen to either of them. They had other priorities, like paying off a mortgage and attending to their next customer!
Jack and Penny met with our principal, Bill Bracey, to review their situation and talk about what was important to them. The following points were identified by the couple to Bill as priorities:
- They needed to start thinking about their retirement
- They wanted to pay off their mortgage as soon as possible
- They wanted to invest the surplus cash flow of their business wisely
- They wanted to ensure their family would be looked after if anything happened to them
- Jack wanted to buy a new car
If you can identify with Jack and Penny, please read on...
Bill listened to the couple’s concerns and helped them prioritise their goals. They were happy to spend nearly two hours with Bill to do this and gave Bill a lot of personal information which allowed him to better understand their situation.
It was difficult for Jack and Penny at first to share such private thoughts and financial information with Bill, but he explained to them the importance of this part of the financial planning process.
Firstly, Bill set up a superannuation fund for the couple and directed some of the business’ surplus into that to reduce their income tax bill. He then set up personal insurance policies for each of them to protect their family in case the unthinkable occurred. Bill ensured that the ownership structures of these insurance policies were designed in the most tax effective manner possible.
Bill then addressed the couples’ debt and recommended ways to restructure them simply in order to reduce interest costs and enable them to pay their debt off a few years earlier, which meant they may be able to retire sooner.
Every year for the next three years Bill met Jack and Penny to talk about what had changed in their lives and keep them informed of how their financial plan was tracking.
In the fourth year, the unthinkable did happen...
Jack was at home one Saturday and suffered a minor heart attack. He was unsure at first if that was what had occurred, thinking 50 years of age was too young for such a medical emergency.
When Penny called Bill to inform him, Bill set in motion the paperwork to claim on the $350,000 trauma policy he had recommended and implemented for them. Very soon afterwards, Jack had a cheque for $350,000 in his hands.
With the money, Jack and Penny were able to retain a top cardiologist and pay all his private hospital bills. He was also able to take a few weeks off work to fully recover and watch the cricket! But it didn’t end there, because Jack had enough left over from the claim to pay off their modest mortgage and buy a new car.
Needless to say, Jack and Penny are very satisfied with the advice they were given (and continue to receive) from Bill. They are now fully focused on their retirement strategy and still meet with Bill annually to make sure it happens sooner rather than later.
If you are interested in discussing your situation with an expert - speak with us today on 02 9328 0876.
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Illawara: 02 4229 8533
Email us: email@sydneyfinancialservices.com.au
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