(Please note; the case study used is fictional and for illustrative purposes only).
Earlier this month I went to see a client called Helen, to have a catch up and carry out our annual ‘Forward Planning’ meeting. Helen works in the centre of Leeds but she lives in a picturesque part of Sheffield, right on the outskirts of the Peak District. The views are truly stunning: her home is at the very top of one of Sheffield’s many hills, the winding country roads remind me of the opening theme to ‘Postman Pat’.
During our meeting Helen informed me of the sad news that she had recently lost her grandmother who had kindly left Helen some money in her Will. Helen told me that she wanted to put this money into her pension because her primary objective is to ‘pack it all in’ as soon as possible!
I asked Helen why she was so keen to retire; ‘Oh, don’t get me started’ she replied, ‘I don’t enjoy my job anymore, it pays well, and I love the work, but the commute is over an hour. Then, when I get there, I hate my boss, the targets are ridiculous these days and we are constantly understaffed, I don’t sleep properly anymore because of the stress’……She went on for a while, it appeared I had opened Pandora’s box!
The most shocking thing to me was that on further questioning, not only was she prepared to ride this out until she ‘retired’, but she had also accepted the fact that she would have to sacrifice holidays and experiences along the way in favour of putting any spare money she had into her pension because she is hell bent on ‘packing it all in’.
Previously I had created a Financial Plan for Helen using my Financial Forecasting software. The good news was that based on conservative, prudent assumptions, her Plan showed that she would be able to comfortably retire at 58. ‘Fantastic’ Helen exclaimed!
The sad thing is, Helen is 50. This would mean another 8 years not living the life she wanted.
I wanted to show Helen some potential alternatives, so using Helen’s Masterplan as the template, I created a ‘What if’ scenario to show Helen what difference it would make to her plan if her salary was to reduce by 15% PA. It showed that she would be unable to retire until she was 60 due to the potential reduction in her monthly pension contributions. After a long discussion around what options this could open up for her, Helen began to see the possibilities, she told me that she could easily source a job closer to home which paid that level of salary, or indeed she could transfer to a different role in a less stressful department with her current employer at their offices in Doncaster, which would reduce her daily commute by almost 30 minutes (that’s around 5 days less time spent commuting over the course of a year)! She told me that this would make an enormous difference to her lifestyle and in this case, she wouldn’t be so desperate to escape!
I also suggested to Helen that instead of investing all her inheritance, she should consider spending some of it on a long overdue holiday. Her long working hours meant that she had not spent much time with her partner recently and I suggested that there seems little sense in neglecting someone you do want in your life forever, in favour of spending far too much time being somewhere that you don’t want to be.
At the time of writing I am pleased to tell you that Helen has arranged a 3 week trip to the USA with her partner in April 2018. They will be able to enjoy some quality time together discovering Yellowstone National Park & the Wild West! I am sure it will be an amazing break for an amazing person. Helen also assures me that she has taken steps to make some changes in her working life too – I will keep her accountable to this, it’s part of my role.
(Although this may be an illistrative case study, it is a typical example of the type of client scenario that I come across regularly as a Lifestyle Financial Planner, I hope it resonates with you).
Simply add a drop of inspiration:
Actor Jim Carrey provided this inspiring quote which is taken from his MUM university commencement speech:
“My father could have been a great comedian, but he didn’t believe that was possible for him, and so he made a conservative choice. Instead, he got a safe job as an accountant, and when I was 12 years old, he was let go from that safe job and our family had to do whatever we could to survive.
I learned many great lessons from my father, not the least of which was that you can fail at what you don’t want, so you might as well take a chance on doing what you love.”
(You can watch the full speech and read the transcript here But if you do, be warned that you are now departing from the regulatory site of Clarity Lifestyle Financial Planning. Neither Marc Hoyland nor Intrinsic are responsible for the accuracy of the information contained within the linked site.)
Do you have any specific financial issues or topics that you would like us to cover in our next blog? If so, we would love to hear from you!
Until next time…
Financial Planner | Financial Adviser | Investment Advice | Pension Advice | Insurance Advice | West Yorkshire
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