Meet
The Disasters
LIFETIME INCOME CASE STUDY
Presented by Puplava Financial Services, Inc.
Registered Investment Advisor
Dave & Darla Disaster
Important Notice:
This is a hypothetical illustration based on real life
examples. Names and circumstances have been
changed. The opinions voiced in this material are
for general information only and are not intended
to provide specific advice or recommendations for
any individual. To determine which investments or
strategies may be appropriate for you, consult
with a financial advisor prior to investing.
Puplava Financial Services, Inc.
Registered Investment Advisor
Background
Meet Dave and Darla Disaster. Dave was a self-taught individual investor who began
day-trading in the late 90s. Overexposed to technology stocks, the dot-com bubble
in the early 2000s diminished much of Dave and Darlas investable assets. As a result,
Dave began investing in what he considered safer asset classes like oil and
financials. In hope that Dave and Darla could pay for their three children to go to
school, they decided to sell Daves stock options and buy speculative properties in
2007 to create passive income to cover the college expenses. Unfortunately, Dave
and Darla were again hit very hard by the 2008 recession: their income plateaued and
they were forced to sell both the rental properties and their home because they could
not keep up with the payments. After these experiences, Dave and Darla decided to
no longer invest in the markets and instead hold their money in cash. Shortly after
relocating, they found PFS Group
Puplava Financial Services, Inc.
Registered Investment Advisor
ESSENTIAL INFORMATION
Client:
Dave & Darla Disaster
Ages:
Dave is age 49 and Darla is age 51.
Retirement:
Both are working but want to retire early in life.
Life expectancy:
Dave age 84. Darla age 93.
Risk tolerance:
Conservative.
Investment objective:
Income with Capital Preservation.
WHO ARE
DAVE & DARLA?
Name: Dave
Name: Darla
Age: 49
Age: 51
Job: Project Manager
Job: Homemaker
Dave has been working for the same company for many
years receiving an excellent salary and benefits. He has
always handled the finances and has long been able to
provide for his family, making sure they have the best of
everything since he did not have much growing up. Dave
is tired of his commute and wants to retire soon so he
can have more opportunities to play golf and spend more
time with his family.
Darla has been a stay-at-home mom raising their
three kids and was ready to take on a part-time job
when the kids left for college. It was very important
to Darla that her kids received a good college
education and graduated from a top tier school with
no debt. Darla enjoys spending time with her kids
and exercising.
WHAT IS IMPORTANT TO DAVE & DARLA?
Paying for college
expenses
Gaining control of
their finances
Retiring early
Purchasing a
new home
DAVE & DARLAS CURRENT BUDGET
Essentials:
Discretionary:
$66,800
$23,600
TOTAL:
Tonys Salary
Surplus:
$90,400
$125,000
$34,600
DAVE & DARLAS RETIREMENT BUDGET
Essentials:
Discretionary:
$58,400
$20,000
TOTAL:
Social Security:
Surplus:
$78,400
$45,000
$33,400
DAVE & DARLAS ASSETS
Non-Investment Assets
Primary Residence:
$335,000
Investment Assets
Daves Retirement:
Darlas Retirement:
Cash:
$425,000
$67,000
$102,000
Total Investment Assets
$594,000
Total Assets:
$929,000
Liabilities:
-$25,000
Net Worth:
$904,000
DAVE & DARLAS FINANCIAL PLAN CHALLENGES
1.
Poor investment decisions by
investing in flavor of the month.
2.
Lack of budgeting.
3.
Impulsive purchasing habits in
assets like real-estate.
4.
Little retirement savings.
GOAL BASED RECOMMENDATIONS
FOR DAVE & DARLA
Goal
Strategy
Gaining financial control
Dave and Darla relocated to an area with lower cost of living but it
increased Tonys commute time to 1 hour 20 minutes each way
from what was a 10 minute commute. Darla found work to help
provide more income.
Purchasing a new home
A budget was used to pay off debts. After becoming debt free, Dave
and Darla saved for a down payment on a home.
Paying for college
Unfortunately, this goal could not be met and their children ended
up paying for their own college education. As a result, their children
attended school while living at home.
Retiring early
Retirement was delayed till Dave and Darlas late 60s to provide
more time to catch up on saving for retirement.
Disclosures:
1. Bonds are subject to market and interest rate risk if sold prior to maturity.
Bond values will decline as interest rates rise and bonds are subject to
availability and change in price.
2. The payment of dividend is not guaranteed. Companies may reduce or
eliminate the payment of dividends at any given time.
3. Fixed annuities are long-term investment vehicles for retirement purposes.
Gains from tax-deferred investments are taxable as ordinary income upon
withdrawal. Guarantees are based on the claims paying ability of the issuing
company. Withdrawals made prior to age 59 1/2 are subject to a 10% IRS
penalty tax and surrender charges may apply.
Puplava Financial Services, Inc.
Registered Investment Advisor
Puplava Financial Services, Inc.
Registered Investment Advisor
If you have any specific questions or comments, please give us a call at
(858) 487-3939
Were happy to speak with you.
Post Office Box 503147 - San Diego, CA 92150-3147
10809 Thornmint Road 2nd Floor - San Diego, CA 92127-2403
(888) 486-3939 Toll Free (858) 487-3939 Tel (858) 487-3969 Fax
