The ‘life after the mortgage’ plan.

We thought clearing the
mortgage would take a lifetime.
Thanks to bonuses we had
the money in no time.

Mark, 45

Company Director, Pharmaceutical Industry

For Denise and I, the big house was the big dream.

I remember sitting in the sitting room and saying to
her, ‘All this is now ours.’ She said – ‘not bad for a
couple in their forties. What’s the plan now?’ No idea.
I replied.

The ‘life after the mortgage’ plan.

https://goodbodywealthmatters.ie/wp-content/uploads/Mark-mob-991px-1.jpg

We thought clearing the
mortgage would take a lifetime.
Thanks to bonuses we had
the money in no time.

Mark, 45

Company Director, Pharmaceutical Industry

For Denise and I, the big house was the big dream.

I remember sitting in the sitting room and saying to
her, ‘All this is now ours.’ She said – ‘not bad for a
couple in their forties. What’s the plan now?’ No idea.
I replied.

I’m no financial adviser
but with interest rates
sitting at historic lows,
I knew sitting on a pile of
cash wasn’t a smart move.

A Nice Problem to Have

I was earning well, I had stock options in the business
and I was receiving regular bonuses, so with the mortgage
cleared, cash just started piling up.

My sons are keen surfers, so we discussed investing
in a holiday home by the sea. And I also knew that one
day I’d inherit my parent’s business.

But I wondered if buying more property would impact
my financial flexibility.

I’m no financial adviser
but with interest rates
sitting at historic lows,
I knew sitting on a pile of
cash wasn’t a smart move.

A Nice Problem to Have

I was earning well, I had stock options in the business
and I was receiving regular bonuses, so with the mortgage
cleared, cash just started piling up.

My sons are keen surfers, so we discussed investing
in a holiday home by the sea. And I also knew that one
day I’d inherit my parent’s business.

But I wondered if buying more property would impact
my financial flexibility.

A Timely Webinar

Then I saw a post on LinkedIn promoting a webinar from Goodbody – aptly titled ‘Investing in your 40s.’ I signed up, and listened in.

Goodbody followed up the seminar with a call and asked if I’d like an initial meeting. It proved enlightening.

Their financial planning process forced us to confront what I call ‘The Golf questions’, these are big questions that are easy to hit into the long grass:

  • Can we afford that holiday home?
  • When was the right time to cash in my stock options?
  • How much will I need in retirement?
  • Was my pension on track?
  • When could I afford to retire?
  • What were the implications of inheriting my parent’s business?
  • How could we invest our cash?

The Goodbody Advice

There’s more to wealth than property.

Mark and Denise wanted to know how best to invest their capital,
at what age Mark could retire and if they could afford to purchase further property.

The first step was to help them understand their current net worth.

So, we drew their attention to three big numbers:

Current Net Worth

€2,242,229

This is the value of Mark and Denise’s assets today less their debt.

Current Net Worth

€2,242,229

This is the value of Mark and Denise’s assets today less their debt.

Projected Net Worth

€6,183,342

This is Mark and Denise’s
future net worth based on
their financial plans.

Projected Net Worth

€6,183,342

This is Mark and Denise’s
future net worth based on
their financial plans.

Legacy Net Worth

€4,252,229

This is the value of Mark and
Denise’s estate following their
deaths, which after exemptions
of €335K per child would leave
a taxable estate in the region of:

€3,582,229

Legacy Net Worth

€4,252,229

This is the value of Mark and
Denise’s estate following their
deaths, which after exemptions
of €335K per child would leave
a taxable estate in the region of:

€3,582,229

The Goodbody Advice

There’s more to wealth than property.

Mark and Denise wanted to know how best to invest their capital,
at what age Mark could retire and if they could afford to purchase further property.

The first step was to help them understand their current net worth.

So, we drew their attention to three big numbers:

Current Net Worth

€2,242,229

This is the value of Mark and Denise’s assets today less their debt.

Current Net Worth

€2,242,229

This is the value of Mark and Denise’s assets today less their debt.

Projected Net Worth

€6,183,342

This is Mark and Denise’s
future net worth based on
their financial plans.

Projected Net Worth

€6,183,342

This is Mark and Denise’s
future net worth based on
their financial plans.

Legacy Net Worth

€4,252,229

This is the value of Mark and
Denise’s estate following their
deaths, which after exemptions
of €335K per child would leave
a taxable estate in the region of:

€3,582,229

Legacy Net Worth

€4,252,229

This is the value of Mark and
Denise’s estate following their
deaths, which after exemptions
of €335K per child would leave
a taxable estate in the region of:

€3,582,229

Our projected net worth
was a welcome surprise.
The inheritance
tax liability facing the boys,
certainly wasn’t.

Our projected net worth
was a welcome surprise.
The inheritance
tax liability facing the boys,
certainly wasn’t.

A glimpse of the whole plan.

Through a combination of strategic recommendations
and lifetime cashflow modelling, we were able to
build Mark and Denise a plan that would enable them
to realise all their ambitions.

The lifetime cashflow model helped us understand the
consequences of decisions before we made them.

Key Recommendations

Mark’s salary, bonuses and stock options were solely reliant on the prospect of one business – his employer.

We suggested Mark exercise and sell 50% of his vested stock options and invest in a wider portfolio to mitigate the risk.

Mark’s legacy company pensions invested in low-risk portfolios that did not reflect his appetite for risk.

We advised Mark to amalgamate his legacy pensions to minimise fees and adopt a more appropriate risk allocation.

With the primary mortgage now cleared, Mark and Denise
needed a long-term investment strategy for excess cash after pension contributions.

Mark and Denise both had a high-risk tolerance, so we
recommended a portfolio where a significant portion was invested for growth.

Based on Mark and Denise’s legacy net worth, their sons would face a CAT liability in the region of €591,000 each.

Mark and Denise could take out a Section 73 policy to contribute tax efficiently to their son’s gift tax liability on a gift of property to them in 8 years time. Once the proceeds of the policy were used towards the payment of their son’s gift tax bill, the policy itself would not be a taxable gift.

A glimpse of the whole plan.

Through a combination of strategic recommendations
and lifetime cashflow modelling, we were able to
build Mark and Denise a plan that would enable them
to realise all their ambitions.

Key Recommendations

Mark’s salary, bonuses and stock options were solely reliant on the prospect of one business – his employer.

We suggested Mark exercise and sell 50% of his vested stock options and invest in a wider portfolio to mitigate the risk.

Mark’s legacy company pensions invested in low-risk portfolios that did not reflect his appetite for risk.

We advised Mark to amalgamate his legacy pensions to minimise fees and adopt a more appropriate risk allocation.

With the primary mortgage now cleared, Mark and Denise
needed a long-term investment strategy for excess cash after pension contributions.

Mark and Denise both had a high-risk tolerance, so we
recommended a portfolio where a significant portion was invested for growth.

Based on Mark and Denise’s legacy net worth, their sons would face a CAT liability in the region of €591,000 each.

Mark and Denise could take out a Section 73 policy to contribute tax efficiently to their son’s gift tax liability on a gift of property to them in 8 years time. Once the proceeds of the policy were used towards the payment of their son’s gift tax bill, the policy itself would not be a taxable gift.

The lifetime cashflow model helped us understand the
consequences of decisions before we made them.

A Final Thought From Mark

Goodbody gave us the confidence
to buy a place by the sea, so the boys
finally got the opportunity to teach
me how to surf.

A Final Thought From Mark

Goodbody gave us the confidence
to buy a place by the sea, so the boys
finally got the opportunity to teach
me how to surf.

What’s your plan?

Please contact us if you think your life could be enriched by a financial plan.

Request a Meeting

READ ANOTHER STORY

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made it big’ plan.
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myself first’ plan.
The ‘keep the farm
in the family’ plan.
The ‘can I afford to
walk away’ plan.
The ‘time to slow
down’ plan.