Success Story

Organizing After a Recent Divorce

Situation:

A recently divorced physician came to My Financial Coach to review the impact on their goals and net worth. By reviewing all aspects of Dr. ______’s financial picture, we were able to provide clarity on the current financial situation as well, as understand the longer term implications of the divorce. We were able to provide clarity by using our account aggregation and modeling software.

Up until this point, Dr.  ______ was not able to make much progress on his goals and was taking on debt in order to stay afloat. He also had to make major lifestyle changes in the short term in order to not take on additional debt. The short and long term effects of the divorce needed to be framed both by a cash flow as well as a liability paydown analysis.

Gaps Identified and Analysis presented:

• We were able to see that most of the debt could and would be repaid in the short term from bonus income as opposed to salary income.
• It seemed as if much of the cash flow would return back over the medium term and that would help to increase lifestyle in the medium term.
• Based on the current savings habits of Dr. ______ , much of the goals in the long term could still be achieved as well as improved as long as spending remains reasonable after debt paydown.
• Client was able to see a significant improvement in lifestyle and financial health by the end of year one. 

Result:

Because Dr. ________ had recently changed much of his lifestyle and reorganized his assets in the divorce, we were able to find an expert in the property and casualty insurance area to make sure his policies still made sense given his current assets and liability exposure. We also made sure that Dr. _______ was made aware that most of his short and medium term progress could only be achieved through his income. His employer offered a very attractive group disability insurance policy that would protect against this risk. We were able to educate Dr. ________ on looking into acquiring additional disability insurance through this policy as well as comparing it to what may be available in the individual marketplace.