Neil & Sue – The Case of How Much Money Is Enough?

Neil & Sue worked hard, very hard.


But they played hard too, they enjoyed the lifestyle which they had worked hard to create for themselves and their daughters Rebecca and Lucy…


Neil was 45 and he had a plan.  It was his plan – his own financial plan.


Because Neil hated three things:

  1. His home loan.
  2. Pensions
  3. And most of all, financial advisers!


So Neil’s plan was simple – to pay off his mortgage as quickly as possible. Then, mortgage free, he intended to accumulate as much as possible via his business between 45 and 55 – so he could retire early.




Neil didn’t think he had a problem. And he didn’t need any ‘advice’.


However, on the advice of his accountant he was recommended to speak with Endorphin Wealth to ‘crunch his Number’.


We first spent some time getting to know Neil and Sue, to understand the life they’ve had, the life they’ve got, and the life they wanted in the future.  We helped them tune in to the real lifestyle they wanted to enjoy throughout their life.  We also wanted to understand why retirement at ’55′ was so important?


The reason? Neil wanted to escape at age 55 and pursue his passion of sailing whilst he was still young enough – and more important – fit enough to participate in it.  He wanted to cross the ocean and see the world.  He wanted to ‘do stuff’ – ‘before it’s too late!’


But why 55?


Neil shared with us that his father had worked hard his whole life, right through to age 65, only to drop down dead at age 67.

That was Neil’s main motivator. He could not bear the thought of that happening to him. He knew – and understood – that ‘Life is NOT a rehearsal’ and Neil lived it accordingly. That’s why Neil worked so hard now, so he could ‘escape’ early.


So, understanding our clients, we said we would work with Neil and Sue through a lifestyle financial planning process to calculate their Number – the amount of money they needed by age 55 to ensure they could live the life they wanted – without fear of ever running out of money.


We built in the cost of continuing private education for Rebecca and Lucy.  We built in the cost of two daughters weddings.  We got Neil & Sue to really think about the lifestyle they wanted at various stages of their lives.


And then we crunched their Number.


We then broke the news. We explained, that on agreed assumptions, Neil & Sue’s current plan – Neil’s’ plan – would see them running out of money by age 67!


Not good.


We then helped Neil & Sue to understand HOW MUCH IS ENOUGH – i.e. how much they needed to accumulate by age 55 in order to prevent EVER running out of money whilst living the life they wanted.


It was a BIG NUMBER.


We then worked with Neil & Sue to help find ways of accumulating the money, including how they could utilise their greatest asset (their business) to build their Number.


Neil & Sue are now well on course to achieve their Number and their intended retirement at age 55. Neil now has a reason to work hard; a real ‘WHY’. Neil is motivated.  Neil is inspired.  Neil knows where he is going.


They continue to meet with us on a regular basis to constantly review their financial planning, to ensure they stay on track.  For Neil & Sue, we play various roles; that of a planner, a mentor and a coach, mostly inspiring them, but sometimes nagging Neil & Sue to do the things they need to do to get to where they want to go.


And that’s easy to do – when you know your Number.

David & Elaine – The Case of ‘Mr & Mrs Do It Yourself’

David and Elaine were retired and struggling to live off the income from their capital.

After allowing for various pension incomes, they felt very dependent on the income from their savings and investments. If interest rates went up they spent more. If interest rates went down they spent less.

Over the years they had accumulated various managed funds and a few shares. Mostly bought off the money pages of the Sunday papers and mainly from leading investment houses who tempted them with promises of high returns. So they invested more money every year.

The trouble was, knowing when to buy investments is one thing, but knowing when to sell is another.  So David & Elaine had gradually built for themselves a portfolio that they didn’t really understand – but of course they were too proud to admit it.

Worse. Every weekend saw both David and Elaine stressing over the immense amount of direct mail received from their various investment providers – and all the time worrying over the money articles in the Sunday papers.

Then the markets went down.

David & Elaine were worried.

So a close friend referred them to Endorphin Wealth.

We met with David and Elaine, and after spending some time getting to know them; their interests, their hobbies and their lifestyle requirements we then analysed their position. We looked at all of their various investments and their income situation.

More important, by talking to David and Elaine about what they enjoyed, we got David & Elaine to stop thinking about their ‘income’ for a while and instead really thinking about their expenditure requirements and how much they would LIKE to spend to give them the life they wanted.

We then ‘crunched their Number’.

Here’s what we found.



Option 1:

David & Elaine could keep doing what they were doing.  Living off interest and dividends, forever fearful of market movements over which they had no control, forever afraid to dip into their savings, just in case. Forever going without. Forever cutting back.

Or they could consider: –

Option 2:

They could ask themselves “What’s most important?”  To constantly worry about such matters, or to consider the option of looking at their assets in a different way, and instead planning to live their life with the INTENTION of spending their liquid capital in their lifetime, leaving their home and personal effects to their children when they eventually died.  After all, even their children were saying that they “wish Mum and Dad would spend it!”

We helped David & Elaine understand what their financial future really looked like, and just how little return they needed on their investments to ensure their money lasted their lifetime.  David & Elaine then understood they could actually spend more, yet take LESS risk with their investments – and in the process consolidate and simplify their portfolio to reduce fees, not to mention relieve themselves of immense complexity.

For David & Elaine, their money suddenly made sense.

More important, David & Elaine got their life back.  No more stressing over the money pages in newspapers.  Instead more fun!  More eating out, more holidays, more treats for the grandchildren.

Five years on, they continue to meet with us where we continue to help them monitor their Number and manage their wealth to give them the life they want.

For David & Elaine it was a very rewarding experience, providing them with a better lifestyle, less risk, more security and a lot more peace of mind. 

Trevor & Sue – The Case of Too Much Investment Risk

Trevor & Sue had recently sold their share of their business having worked hard building it up for over 30 years…


Aged 60, they had no children whom to pass on their hard earned wealth.  And now, like so many people, Trevor’s primary concern was to try to ensure a high return on his capital.


Trevor & Sue had already met with two financial advisers with a view to investing their money.  Each of these advisers put forward their recommendations based on the ‘risk /reward’ profile they had identified for them client at their first meeting.


As former business owners both Trevor & Sue had confirmed to these advisers that they were prepared to accept a ‘reasonable level of risk’ in order to obtain a good return on their hard earned capital. Trevor’s long held view was that “to accumulate, you have to speculate”!


So, in order to satisfy Trevor & Sue’s requirement for a high return both Advisers had recommended a similar, fairly adventurous investment portfolio which “matched their above average risk profile”.  Both portfolios suggested a very high proportion of monies to be invested in equities and other investments in an effort to secure a high return over the longer term.


Trevor & Sue were about to decide which Adviser they would invest with.


However, before investing their money Trevor & Sue were urged by a friend to speak with Endorphin Wealth.


Here’s what happened…


When we met with Trevor & Sue, we did the complete opposite to the other two Advisers. We focused our attention on Trevor & Sue, not their money!


We focused on getting to really know and understand Trevor & Sue, enquiring about the business they had built; when, how and why they started it; the trials and tribulations they had encountered along the way; the sort of things they’ve enjoyed doing in the past, what they now enjoyed doing – and what sort of things they wanted to do in the future.  We got to understand their fears and doubts and what was important to them about their future.


Through a straightforward process we then helped Trevor & Sue identify the cost of their desired lifestyle not only now, but over the various periods of their lives.  We then helped Trevor & Sue to consider and include into their planning certain additional financial goals and objectives that would make their retirement even more fulfilling and meaningful.


With a thorough understanding of their situation we then were able to demonstrate to Trevor & Sue that in order to prevent ever running out of money all they needed to achieve was a real rate of return on their money of just 1% above inflation.


With this knowledge, we helped them understand that the last thing they needed at this stage of their life was risk…


What they in fact needed was a lower return with much less risk; a prudent, tax effective portfolio which would give them the peace of mind they needed to enjoy their retirement – without constantly worrying about world share markets.


With recent volatility of share markets Trevor & Sue avoided the inevitable loss on capital that would have ensued had they invested with the other Advisers without knowing and understanding their full financial situation.


We saved Trevor & Sue over $200,000 of imminent losses that would have occurred had they invested through the other Advisers who did not do lifestyle financial planning.  Why take excessive risk when there is no need to do so?  Retirement should be a time to enjoy the precious time you have left.


Trevor & Sue continue to enjoy their retirement and we  continue to meet with them, to monitor their investments, review and update their financial plan and, more often than not, discuss how much more they can afford to spend to further enjoy their retirement and continue to be free of worry.


For Trevor & Sue, their big question was “Why didn’t the other two Advisers do this?”

John & Sarah – The Case of ‘Are we there yet?’

John & Sarah were nearly there, or so they thought.  Trouble is, they didn’t know where ‘there’ was…


It all started late one night when John, a Senior Pilot for a major long-haul airline, flying over the Indian Ocean, suddenly thought to himself “How much longer do I have to do this?”


John used to live to fly. Every minute he could be in the air he would. But now things were different. Increasing pressure, increasing regulation, continued testing, and increasing cut backs, it was no longer the same.


The fun had gone.  And now, aged 55, he was thinking ‘WHY am I still doing this?’


John loved to fly, but what he wanted to fly now, more than ever, as his own single engine, two seater bi-plane.  Now that was real flying.  That’s what he wanted to do. To buy and fly his own bi-plane, his own beauty.


He had a great superannuation balance.  He’d built up some investments.  He’d nearly paid off his mortgage. But what did it all mean?


Was he ‘there’ yet?


He needed help.


So, with an introduction from a friend, he turned to Endorphin Wealth to help make sense of it all.


We first helped John and Sarah get a fix on what they wanted, and when they wanted it, and on the sort of lifestyle they enjoyed now and what they wanted to continue to enjoy.


Travel? “No thanks!”  They’d done enough of that in their lifetime!  Now, their interest were, for John, flying and for Sarah breeding goats on their 20 acre land in Trentham.


So, with a full understanding of their ambitions, and having obtained all the details of their existing arrangements, and more importantly having broken down the cost of their desired future lifestyle, we  crunched their Number – the amount of money they needed, taking everything into account, to live the life they wanted, for the rest of their life, without fear of ever running out of money.

The result was that YES, they were already there – so long as they built into their financial planning a cash inflow from a projected (and necessary) house downsize at around age 75.


So, for Sarah no more long periods spent alone. She now has more than just the goats for company.  That’s because John is no longer away for most of the time; he no longer flies long-haul. Instead he enjoys the thrill of the wind in his face at the controls of his own bi-plane.


And, as a thank you, we continue to get an annual supply of goats’ cheese!