Make the future you want... for your family
Introducing Kurt and Lucy - Managed Portfolio Service clients and immigrants in search of a fresh start
Kurt and Lucy emigrated to New Zealand looking for a more secure lifestyle as a result of the shattering event of 9/11 in America. Kurt had gained a job transfer offer with his international employer and within one week of landing on kiwi shores, Kurt was into his new role and Lucy had discovered she was pregnant. The couple soon realised that on one income, they couldn’t afford to purchase a family home close enough to the Auckland CBD to be convenient. They’d also discovered that although Kurt and Lucy had made a good start at creating their wealth through a US Bond Portfolio in their early 20’s, the construction of their portfolio was based on US tax breaks that were now no longer available to them. They needed to seek advice.
The Challenge
After being referred from ABN AMRO Bank in America to ABN AMRO Craigs in New Zealand, they found an investment advisor who could assist them tidy up and reorganise their existing portfolio and guide them on the best path to wealth creation.
While they had a deposit for a house they would be excessively mortgaged with little left to put aside for their children’s education, and no buffer to enjoy life. Until Kurt had proved his worth with his new employer, the extra financial boost they needed wasn’t going to come from a professional salary. Now on one income, they needed help to build capital.
The Solution
In consultation with their ABN AMRO Craigs advisor they devised a strategy to convert a low-yielding portfolio into a high-growth portfolio constructed to take advantage of tax breaks. Kurt and Lucy were not risk averse and in fact a specific request of their advisor had been to push hard to adopt a strategy that had them in the best position to out-run Auckland’s steep housing market incline.
As a result the US Bonds were converted to New Zealand and Australian blue chip equities, some UK trust equities and the balance (10% or so) converted into fixed interest. Over two years the portfolio (which had previously only grown at only 3% while in US bonds) sustained a 25% annualised return, which the couple put back into the investment to further compound their growth.
The Johnston’s are today the proud owners of a three-bedroom villa in Sandringham. The couple have a relatively small mortgage with over $450,000 in equity, while retaining the original value of their US portfolio.
The Johnstons called their investment advisor recently, with good news of a growing family which they were financially taking in their stride. Acting on a recommendation from their advisor they already created a mySTART fund to separate out their children’s education fees from their portfolio.