Eric And Cindy Sample
Turning Income Into Wealth
Sample Case Study
(This Is A Hypothetical Example Of Working With Affinity Financial)
AGE(S):
35 and 39
PROFESSIONS:
Corporate Sales
SOURCES OF INCOME:
Salary Wages, Sales-Based Bonuses, Restricted Stock Units
PRIMARY GOALS:
Joint lifestyle planning; Turning income into wealth for early financial independence
THE CHALLENGE:
Eric & Cindy, recently married, have each worked at recognizable Fortune 500 companies for the entirety of their careers and risen the corporate ladder in highly respected sales roles. Independently, they had each made enough money to cover their personal needs and desires, but they are now thinking more about the future and their joint lifestyle aspirations.
Since their employment income opportunities and benefits have expanded significantly over time, they are highly focused on ensuring that they are making smart
financial decisions as a team to maintain a high quality of life now while saving and investing determinedly for the future. They expect to start a family soon, and would like to walk away from the corporate sales world and be financially independent by their early-to-mid 50s. It’s an ambitious goal, but with the right planning and systems in place, they believe it to be well within reach.
THE APPROACH:
Eric & Cindy want to stay focused on living a life on purpose, and ensure that they have a shared vision for the future. They feel that a financial planner can aid in fostering accountability and positive progress toward their most meaningful life objectives.
THE RESULTS:
During regularly scheduled planning meetings, Eric & Cindy are appreciative that partnership with a financial professional gives them dedicated times to openly and candidly speak about their lifestyle desires. As we all know, “it’s too easy to get caught up in the day-to-day of life, and we work so much that we don’t naturally want to talk about the household finances during our free time during nights and weekends. It can be helpful and enjoyable to proactively plan for success, knowing that we have a clear direction for our family and that we are actively taking actions to turn dreams into realities.”
In working with Affinity Financial, Eric & Cindy would be able to:
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Implement a “Pay Yourself First” system in which cash flow is automatically allocated to various financial objectives. These include personal accounts for individual discretionary spending autonomy, joint savings for emergency fund and near-term spending needs, tax-advantaged retirement accounts, and growth focused investment accounts.
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Keep liquid cash holdings at adequate levels, while permitting appropriate funds to grow with a long-term investment plan.
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Identify how annual sales target bonuses and vested RSUs can be purposely used to enhance personal savings and investment contribution targets.
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Understand and optimize the value of their workplace benefit packages to lower out-of-pocket costs and reduce taxes. They would be surprised to learn about the tax-efficient growth and generous matching policies within the 401(k) retirement plans, executive deferred compensation plans, and flexible spending accounts.
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Recognize that they want to live well within their means but allocate sufficient spending for their most cherished activities, like hosting social gatherings and travelling domestically.
They know that life will throw them unexpected curveballs along the way, yet they feel a great level of confidence that proactive and mindful planning will help them navigate any life transitions. Plus, they know that they can always reach out to their financial planner for guidance as questions arise.
