Case Studies

The Case of Mr. & Mrs. ‘Do-It-Yourself’

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David and Elaine ‘Do-It-Yourself’ were living off the income, and some of the capital, they had accumulated over the years. After allowing for various pension incomes, David and Elaine were supplementing their income from their savings. If interest rates went up they spent more. If interest rates went down, they spent less.

Over the years they had accumulated a small collection of PEPs and ISAs and a few shares. Most of these they had purchased off the page from the leading investment houses who tempted them with ‘promises’ of high returns.

Trouble is, knowing when to buy is one thing, but knowing when to sell is another ! So David and Elaine had gradually built for themselves a portfolio that they didn't understand - but of course they were too proud to admit it.

Worse still, every Sunday they wrestled with the money pages in the Sunday papers, and spent many hours wading through the Direct Mail from their various investment providers.

This wasn’t too bad, while things went up. But then the markets went down. David and Elaine were worried. So a friend referred them to one of our ‘numbercrunchers’.

He analysed their position, looked at all their various investments, and scrutinised their income situation. More importantly he got David and Elaine to think about their expenditure requirements and how much they would LIKE to spend to give them the life they wanted.

Then he ‘crunched their number’. Here's what they found.

One option was for them to keep doing what they were doing - live off interest and dividends, forever prey to market movements, condemned to dip into their savings whenever things got tight. Forever going without. Forever cutting back.

The other option was to change their attitude and plan to spend their liquid capital in their lifetime. They could leave their home and personal effects to their children when they eventually died, but enjoy spending the rest. Even their children were saying that they wished their Mum and Dad would spend it!

So our ‘numbercruncher’ helped David and Elaine understand just how much return they needed on their investments so their number lasted their lifetime. This meant they could actually take LESS risk with their investments, and in the process consolidate and simplify their portfolio to reduce charges.

More important, David and Elaine got their life back. No more reading papers. Instead more fun, more eating out, more holidays, more treats for the grandchildren.

For David and Elaine, their money suddenly made sense.

They continue to meet our ‘numbercruncher’ and so continue to manage their number to give them the life they want.

It pays to know your number