Sunlife Case Study – Wayne and Fiona

Wayne & Fiona

Clients situation when we first met

Married, two young children
Home owners & self-employed Business owners
Business premises (with mortgages secured against family home)
Small amount in savings
Super (more than $200,000, combined)
Credit card debt
Business Overdraft
Small Business loan

Although their business had good turnover, the pressure of juggling various loan and debt repayments was taking its toll. They were treading water, not getting ahead financially and their situation was limiting their lifestyle.

Objectives

  • Reduce debt
  • Free up some capital to finish home renovations
  • Improve monthly cashflow
  • Take control of Superannuation
  • Start an investment strategy to create wealth for their future

Outcomes

By restructuring their financial position, we were able to reduce their debt against the family home saving them around $2,180 per month in repayments (that’s $26,160 per year in savings).
We determined that setting up a self-managed super fund and transferring the factory unit (owned in their personal names) as an asset was the best strategy to enable them (as business owners operating from their business premises) to use their super fund balance and a smaller loan to clear the large debt against the family home.
This new strategy allowed their business to legally “pay rent” to their super fund, which in effect will help pay off their SMSF loan.
The reduction in loan repayments (savings of $2,180 per month) enabled them to start a “personal contributions” strategy into their SMSF which reduced their taxable income, and the extra payments were directed towards paying down their new SMSF loan. This strategy could see them debt free and owning the asset in approximately 7-8 years.
There were other strategies we introduced to further improve their financial position, and they are well on their way to becoming debt free before retirement.

Here’s what Wayne and Fiona have to say:

“We knew we had to do something as the business had good turnover, but we just weren’t getting anywhere financially. We wanted to reduce the financial burden of having multiple loans and personal debts, but our bank manager couldn’t help us. We’d heard about self-managed super funds but didn’t know where to start or what was really possible. Our accountant recommended we meet with financial adviser Steve Luman, and after our first meeting we felt like a huge weight had been lifted and we were confident in the strategies and new direction Steve had outlined for us.
The results were instant, having gone from drowning in debt to increasing our cashflow and being financially in control. Steve worked closely with us to ensure we understood each step, and he made the process seem a lot simpler than it really was.
We are a lot more confident in our finances now and taking these steps has made a huge financial difference in our lives. We are very appreciative of Steve’s advice and guidance and would strongly recommend him to anyone looking to improve their financial situation.”

Wayne & Fiona

Disclaimer:
Sunlife Group offers specialised services in the areas of financial planning, accounting, finance and property. Each service provider operates under their own entity and license. Information is shared under a third party authority with permission from the client. Our duty of care as industry professionals is to always act in the client’s best interest. For further information please visit: Sunlifegroup.com.au

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