Harry is an international premier league footballer with an illustrious and successful career to date. He has built up over the years a large cash holding position and also invested into a directly held buy-to-let property portfolio. His aim is to invest his high football income wisely so as to provide replacement income streams when he stops playing football. His property portfolio is not providing the anticipated returns due to changes and cuts to buy-to-let tax relief and increases in stamp duty introduced by the government since 2015. This has made his buy-to-let investments less commercially viable with him paying considerably more tax. Therefore when Harry first came to us he was seeking an alternative and more tax-efficient Wealth Management solution, that would provide him and his family with the financial freedom and security that they so desire.
There are many stories about professional athletes and their post sporting career money problems. Research by XPro, a charity for ex-football players, suggests that three out of five Premier League players – who earn an average of £30,000 per week – declare bankruptcy within five years of retirement. High profile football and sport stars who have declared themselves broke after quitting their respective lucrative games include Ronaldinho, David James, Diego Maradona, Paul Gasgoine, Duncan Ferguson, George Best, Mike Tyson, Chris Sutton, Boris Becker and Evander Holyfield to name a few. Lured into bad investments by their agents or advisers, stalked by freeloaders, and naturally prone to egotism, many professional athletes get a huge shock when faced by the harsh economic realities after years of living the high life. The evidence is compelling and highlights how unprepared, both financially and emotionally, they are to deal with the 'sudden wealth factor' and the impact this has on their lives.
According to behavioural economists, financial decisions are likely to be subject to decision making bias. Our work with Harry includes gaining an understanding of his current relationship with money and how this has evolved over time to help us identify any detrimental bias behaviours. Working closely with Harry we gain an understanding of current and future lifestyle expenditure and the costs thereof. Our financial modelling and analysis workflows enabled us to calculate how much money Harry needed to maintain his current lifestyle to age 100 ie the magic number. We reviewed current assets and liabilities to better understand whether his goals and objectives were in fact sustainable or whether there were any shortfall gaps that needed addressing.
With a comprehensive financial plan fully implemented, Harry and his family are now prepared for anything that life has to throw at them. This has helped Harry plan and adapt to any real life events and transitions, before, during and after they happen. We created and designed different financial modelling scenarios for the most complex of financial situations and adjusted the models going forward - covering Cash Flow, Expenses, Investments, Pensions, Property, Debt, Protection and Taxes. The models are kept under constant review and updated accordingly. Harry and his family now have the peace of mind that they were seeking, knowing that they have a holistic plan in place, that they are in charge of their own destiny, and are able to maintain their desired lifestyle throughout their lifetime.
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