posted in: Investment Advice

From redundancy to a $1m+ investment portfolio within 5 years


In 2002, Jesse* was offered a redundancy package. Included in the package was an optional meeting with a financial planner. While her manager encouraged her to take up the offer, Jesse had some concerns about meeting with a financial planner. “I’m Chinese and financial advisory had never come across my mind. My perception at the time was that financial planners are just for wealthy people,” says Jesse.

What to do with a redundancy package? 

In 2002, Jesse* was offered a redundancy package. Included in the package was an optional meeting with a financial planner. While her manager encouraged her to take up the offer, Jesse had some concerns about meeting with a financial planner. “I’m Chinese and financial advisory had never come across my mind. My perception at the time was that financial planners are just for wealthy people,” says Jesse.

“My redundancy package wasn’t a large amount of money. I was worried that a financial advisor would need me to invest more than I had, and that I’d be pressured to buy shares or a certain product,” says Jesse.

After doing some research into financial planners she spoke with one over the phone but didn’t feel she was a good match.

“It was unfortunately what I expected — she told me I needed a certain amount of money and then told me what I should invest that money in.” Jesse persevered and contacted Montara Wealth. Our director David Hancock suggested she come and have an obligation-free meeting to talk about her situation.

Unlocking the possibilities for Jesse

When we first met Jesse, she felt that she didn’t have many options. She had a redundancy package but also the responsibility of servicing a $300,000 mortgage on her apartment as well as to send money back to Hong Kong to support her mum. Her cashflow was tight and she was worried about taking on any extra risk. We started our analysis for Jesse by collecting information on her spending habits.

“David and his team were willing to help and that comforted me. The first two meetings with the Montara team were like peeling an onion. Peeling back the layers of my situation, gathering information bit by bit so they could do their analysis. They got into my world to understand my lifestyle,” says Jesse.

Identifying Jesse’s strengths and improving her lifestyle

A key part of our role is identifying our client’s strengths to help them to see their financial potential.

For Jesse, we felt her strengths were:

• She had a stable job with a semi-government agency earning $60,000 p.a.
• She had a redundancy package
• She owned an apartment as an asset in a market where values were going up.
• She wasn’t a big spender and was committed to make sacrifices to save money.

Jesse found our external opinion on her situation gave her more confidence in what she could do with her money.

“David and his team gave me a clearer picture of my position and what I needed to next do step by step. The reality was very different to what I thought I had,” says Jesse.

Creating a balanced lifestyle as well as longer-term goals

Jesse saved every cent she could. If she could walk instead of taking the bus, she would. “‘Don’t spend was my saving strategy,” says Jesse. David and the team helped Jesse to actually feel comfortable to spend more than she was, so she could have a better lifestyle. “David said to me, Jesse, you can live like this for a short time but you can’t live like that for the next three to five years. That’s not how life should be,” says Jesse.

“The team at Montara put a plan in place for me. I could see clearly how I could maintain a certain lifestyle while also meeting my longer term investment goals,” says Jesse.

Choosing to invest in property

To start with we analysed Jesse’s financial position and to give her a little leeway we refinanced her mortgage to a lower interest rate. We then presented Jesse with a rounded strategy on the various asset classes she could invest in.

Our goal for Jesse was to establish a baseline of investments that would work away for her in the background.

After reviewing various scenarios in our model, Jesse decided to buy an investment property.

We guided her through a step by step approach to buying her first one. Our model factored in a buffer in case interest rates rose to make sure Jesse wouldn’t have any difficulties in this event. Jesse did independent research and consulted an investment property expert when deciding where to buy her investment property. She was careful to understand the pros and cons of the properties she was considering.

Jesse followed the plan carefully and continued her strong ability to save. Her dedication and hard work has transformed her financial situation — she is now the owner of three investment properties, one in Queensland and two in New South Wales.  Jesse’s investment property in Newcastle, NSW, has performed particularly well. It was cash flow positive after tax from day one and the value of this property grew from $400k to $650k within 5 years.

Her advice to people who think that they don’t have the wealth to use a financial advisor is clear:

“Talk to the team at Montara Wealth with an open heart. They will give you advice and suggestions beyond what you can imagine”.

*Our client’s name has been changed for this case study for her privacy.

If you’re an existing client and would be interested in booking in for a review, please contact us. If you’ve never met us before and would like to find out how we may be able to assist you in building a personalised strategy, please contact Kathleen on (02) 8330 3733 or kastor@montarawealth.com.au.