Enjoy life and pay off the home sooner
Simon and Olivia are in their mid-30s, have demanding jobs, three children under the age of seven and a home loan.
"We'd just got to the stage where we felt we needed to get serious about our money, look at how we could pay off our home loan as fast as possible and have the extra money to enjoy with the kids while they're still young," said Olivia.
To give themselves the best possible start to achieving their goal they decided to seek professional finance advice. Olivia met a few advisers work colleagues had recommended and when she found adviser Liam Diggin through MLC, she felt comfortable they'd be able to work together.
The first meeting
"When Simon and Olivia first came to see me they were quite nervous about talking about what many see as an impossible goal," said Liam Diggin of Mentor1 Financial Planning. "But once we'd established what was really important to them as a couple and where they wanted to be in the next five to ten years it was easy to see that their priority was their family and having the time, energy and money to enjoy them.
"Like many couples they'd been busy setting up their careers, buying a house and building a family and hadn't really thought about how they could be making their money work harder for them," he said. "They were also keen to make sure their family would be safe and secure should anything happen to either of them. From our discussion we came up with a to-do list to help them achieve their dreams."
Simon and Olivia's financial plan
After reviewing Simon and Olivia's financial position Liam arranged a meeting to discuss his recommendations. He outlined a 10-point financial plan he'd created for them, three of the strategies from which were:
- Consolidate super accounts, switching to a different fund structured for long term growth
- Use equity in their home to borrow money and investment in a managed fund. Deposit earnings from the investment back in the home loan account
- Increase personal insurances and referral to a solicitor for wills and estate planning
The results
"We ended up following almost all of Liam's recommendations and it was a real weight off our minds. He arranged for us to see a solicitor and get our wills sorted out, something we'd been meaning to do since Milly our first child arrived," said Simon.
"I was quite sceptical about seeing a financial adviser and wasn't sure if we could afford it or if the results would be worth it but now I can't recommend it enough! In all we paid $2,500 for the plan and we agreed on a yearly fee so that Liam continues to look after our plan and make any adjustments. Not a lot when you think of the thousands we would have paid just in extra interest on our loan had we continued to drift along like we had been doing.
"I think it's really important to find the right adviser for you," said Olivia. "We really clicked with Liam and he understood what we were looking for and why. His advice means that we know that our family will always be taken care of should anything happen and that there's enough money there to pay off any debts, make sure the kids are looked after and cover schooling costs until they're all 18."
"We can see each month that the working hours we put in today are having a real effect on bringing our goals closer each day. We'll go back to Liam for a catch up each year and we'll also let him know if and when we make any big changes – maybe we can even beat our challenge and pay off the loan eleven years early!"
* Names of clients changed for privacy reasons.