The following financial modelling charts illustrate examples of actual results obtained [in the first year] from the provision of our advice for a Doctor aged 40 (first set of charts) and for a Consultant Physician client age 59 who plans to retire in six year’s time (second set of charts).
As you can appreciate, the results for each client’s personal financial and life situation will be different. Financial models will be customised to your specific needs, the outcomes desired and what is achievable.
The following illustrations are examples only, based on numerous assumptions (such as inflation of 3% per annum, income increase assumptions of 3% per annum, rates of returns of 7.5% per annum, current legislation and risk management (personal insurances) in place, projected into the future and may further vary according to (unknown) future events.
All being said, projections are a value tool for clients to visualise the value add that we are able to create as well as to provide a degree of confidence and certainty into the future. As your situation, the economy, investment market(s) and legislation changes, your illustrations become dynamic and will adapt to the variables presented.
In the examples provided below, the results of the client’s Recommendations (from Elixir Wealth Advisory) versus their Current Situation is shown via way of graphical comparisons (not taking into account of the effects of inflation [Future Value] and are all based on real life scenarios.
Tax Legally Minimised – Medical Professional age 40 retiring in 25 years – Future Value
The above charts illustrates an example of what may be reasonably achieved via the full integration of our Tax, Credit and Wealth advice. In this scenario, the client saved $45,000 of tax in the first year.
Tax Legally Minimised – Medical Professional age 59 retiring in six years – Future Value
The chart above shows the client’s estimated tax benefits. Once in retirement this particular client will pay no tax (the steep drop seen in 2021), as they will be drawing on a superannuation pension which is 100% tax exempt. In this scenario, the client saved $44,000 of tax in the first year.
Net Income Improved – Medical Professional age 40 retiring in 25 years – Future Value
By implementing strategies to legally minimise tax, we are able to increase the above client’s net income. Over time our additional investment recommendations come into play and provide a more sustained boost to long term net income for this particular Doctor. In this scenario, the client’s net income improved by $28,000 in the first year and progressively increased afterwards as a result of our strategies.
Net Income Improved – Medical Professional age 59 retiring in 6 years – Future Value
The above charts shows the transition of the client moving into retirement in 2021. As consulting income ceases, the primary source of income in this situation becomes superannuation pensions (husband and wife) and at a sufficient level to meet the client’s lifestyle and travel aspirations. The declining value of income in retirement is due to the gradual depletion of the clients’ superannuation based pensions. In this scenario, the client’s net income improved by $24,000 in the first year.
Net Wealth Trajectory – Medical Professional age 40 retiring in 25 years – Future Value
The compound effect of our advice is displayed above in this example. Whilst this particular Doctor will have adequate assets beyond the majority of the population, we were able to further optimise their situation so that legacies and philanthropy activities may be engaged for other generations to benefit from.
Net Wealth Trajectory – Medical Professional age 59 retiring in 6 years – Future Value
The above scenario is unique in the sense that initially it seems that the client has lost a lot of net wealth but is not the case over a +10 year period of time. Our strategies were purposefully designed with the client’s cashflow and capital longevity in mind. We made recommendations for the client to invest $400,000 in the first year with the view that the client will have sufficient funds and assets to draw upon (if needed) deep into retirement.
Cashflow Analysis – Future Value
The above charts is a cashflow analysis of our example Doctor client in their 40s. It shows to composition of income leading to and into retirement.
Capital (Asset) Analysis – Future Value
The above chart illustrates the projected asset composition now and into retirement with our strategies in place with the bulk of the client net worth being investments.
The graphs displayed are a small sample of our Elixir Wealth Advisory’s capabilities within Wealth & Risk Protection.
