Client Profile: Our client came to us facing significant financial and personal challenges. Recently going through a turbulent personal life, she realized that her financial situation had deteriorated to a point where cash flow was severely weak, and she was nearly bankrupt. At the time, her portfolio included multiple investment properties, but managing them had become increasingly difficult. She was struggling to make ends meet, and her overall financial outlook appeared uncertain.

Challenges:

• Weak cash flow

• Financial mismanagement due to personal turmoil

• Over-leveraged with multiple investment properties

• Risk of bankruptcy without immediate action

• Lack of a structured financial plan or foresight for future needs

Our Approach:

1. Understanding the Financial Landscape: We began by thoroughly assessing her current financial situation, including reviewing her assets, liabilities, income, and expenses. This comprehensive review revealed that her cash flow was unsustainable and that her investments were draining her resources. We identified that the best course of action was to restructure her assets and remove some financial burdens to regain stability.

2. Asset Restructuring: Given the weak cash flow and high levels of stress associated with her investment properties, we advised her to sell her investment properties while retaining her owner-occupied home. This strategic decision allowed her to liquidate high-maintenance, non-liquid assets and reduce the debt associated with her investment properties. By doing this, she could eliminate the financial strain and have more liquid capital available to improve her situation.

3. Building a Super Portfolio: With the proceeds from selling the investment properties, we advised her to redirect the funds into a well-diversified superannuation portfolio. We tailored her superannuation strategy to focus on long-term growth while keeping it aligned with her current risk tolerance. By doing so, we not only secured her retirement but also ensured she had a more structured and stable investment vehicle for the future.

4. Applying for Age Pension: Recognizing that her financial resources were limited in the short term, we helped her apply for the Age Pension, ensuring she could access available government support while her superannuation portfolio grew. This decision helped bridge the gap in her income, allowing her to cover essential expenses without worrying about depleting her resources too quickly.

5. Planning for the Future: We leveraged foresight to project her future financial needs, taking into account both her lifestyle goals and long-term retirement needs. We provided her with a clear roadmap, detailing projected income, expenses, and the necessary steps to safeguard her financial future. This planning approach allowed her to feel more confident about the road ahead and gave her peace of mind that her financial future was in capable hands.

6. Insurance and Life Insurance: In addition to improving her asset base and income stream, we recognized the importance of insurance to protect her from unforeseen circumstances. We ensured that she was adequately covered with both life insurance and appropriate health coverage. This would safeguard her financial future in case of an unexpected event, further securing her family’s well-being.

Outcome:

• Net Worth Growth: Within a few years, our client’s financial situation dramatically improved. She went from being nearly bankrupt to achieving a net worth of $1 million. This was a direct result of the strategic asset restructuring, superannuation planning, and foresight applied in our advisory process.

• Improved Financial Security: With a more robust financial structure, our client now enjoys stable cash flow and reduced financial stress. She is no longer over-leveraged, and her future retirement is secure with a well-positioned super portfolio.

• Ongoing Client Relationship: Our relationship with this client didn’t end with the initial restructuring. We transitioned her to an ongoing client who benefits from regular reviews and updates to ensure her financial plan stays on track as her needs and circumstances change. This continued support allows us to adapt her strategy as needed, keeping her on the path to continued financial success.

• Peace of Mind: With life insurance and a comprehensive financial plan in place, our client has peace of mind knowing she is financially secure, both now and in the future.

This case highlights our ability to provide comprehensive financial advice, particularly during times of personal and financial hardship. By applying foresight, strategically restructuring assets, and providing long-term planning, we were able to turn a nearly bankrupt situation into one of financial stability and success. Our holistic approach, ongoing support, and tailored strategies were key in helping our client achieve a net worth of $1 million, ensuring her financial well-being for years to come.