Couple Financial Decision-Making - Helen and Tony's Story

Helen had participated in the Financial DNA process, and urged her husband Tony to take part in the process as well.

They were at a crossroads in their investment strategy. Several years prior, they had invested all their savings in a property development which had produced a profit, albeit a disappointing one. Their proceeds from this investment, however, were subsequently lost in some bad stock speculations and a failed business. In addition, they both found it difficult to save money, budget, and administer their finances.

Helen was, by her own admission, frustrated with Tony who repeatedly proposed investment strategies that Helen felt were too risky. In her own words, she would rather ‘tread water’ than embark on an investment with any risk whatsoever.

Most revealing for Helen and Tony was seeing how very different their approaches to financial risk were. The Core Life Profile in Stage 1 of Financial DNA uncovered a very high risk tolerance in Tony, but extreme caution in Helen’s approach. This information immediately enabled Helen to understand her husband’s need for adventurous investments, and it also helped Tony understand Helen’s hesitance in all things financial and also her need for more of a balanced lifestyle. This had previously caused a great deal of conflict between them, but by objectively learning about one another’s motivations, they were able to understand each other’s behaviors, preferences and dislikes much more easily.

Helen and Tony then completed the Financial Directions Appraisal, which took them around an hour each.

Interestingly, both Helen and Tony’s Financial Directions Appraisals showed they had low financial astuteness. It became apparent very quickly that they both needed education in investments. They both had a strong preference for property investing, however after education into different investment options, they both began to take a more holistic view of their long-term investment strategy.

It was also made apparent that Helen and Tony had very different investment styles and preferences. Tony, an aggressive growth investor, preferred to take sizable risks in investments that had potential for very high returns. Helen however, favored value and security in her approach. In addition, they both had a highly emotional approach to making investment decisions. Helen’s emotions were fuelled by her fear of loss, whereas Tony’s were fed by his desire to ‘make a killing,’ as he termed it.

It was clear that as things stood, it would be very difficult to create an investment strategy that met the needs of both of them. After discussing their Financial Directions reports with Chris, Helen and Tony both realized they needed help in achieving their financial potential, and they asked Chris to mentor them through the Quality Life Financial Planning process.

Even before beginning the Financial Life Planning process, Helen and Tony had come a long way in understanding themselves, one another, and the key drivers behind their previous investment decisions, mistakes and fears. However, they were both hungry for investment knowledge, as it became very apparent to both of them that they had significant financial potential that, at the time, was unrealized.

Firstly, Chris recommended they attend a seminar on stock market investing for beginners, as there were several fundamental aspects of stocks that neither of them understood. It was at this seminar that ‘the light went on’ for Helen in particular, and it was instrumental in her beginning to understand that price volatility, so often focused on by the media, was not the same as capital risk.

Under Chris’ guidance, they also began self-education in the area of property investment, and Tony in particular began to view property investment in another light. A long property bull market had caused Tony to view property as a completely risk-free investment, but through the Quality Life Financial Planning process he began to understand the risks of price volatility, liquidity and inflation risk as they applied to property.

While both Helen and Tony were still keen to invest in property, they also began to have a more holistic, measured, long-term and strategic approach to their investment strategy. After mentoring by Chris, Helen and Tony were able to do better than reach a compromise in their financial plan. Through education, understanding and mentoring, they were able to formulate a plan that fully met Helen’s need for stability and a reasonable degree of certainty, and Tony’s need for aggressive growth.

With new insights into both property investing and the stock market, Helen and Tony, with Chris’ help, formulated concrete goals, and a plan to reach them. Chris was able to help them establish their own family company for restoring and developing properties. With this residual income stream established, Helen and Tony used their new understanding of the benefits of the stock market to embark on a 20-year investment plan managed by Chris. Today, Helen and Tony are well on their way to their goal of early retirement which will be amply funded by their growing investment portfolio.

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