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MOCK CLIENT SCENARIOS

Jackson

Young Professional

Client Age: 27

Occupation: Actuary 

Income: $95,000

Young Professional

Jackson

Young Professional

Client Age: 27

Occupation: Actuary 

Income: $95,000

Young Professional

Situation:

Jackson was a driven young professional who had just been promoted at work. He had a promising career trajectory as an actuary and loved what he was doing for a living. Thinking it’s time to get serious about his finances, Jackson schedules an intro call with Activate Wealth.

Concerns:

  1. Putting together a personalized budget 
  2. Saving for a down payment on his first home 
  3. Paying down his student loans 

Jackson is a perfect candidate for Project Planning with Activate Wealth. This is a short term engagement that answers questions on 2-3 financial planning areas. Clients walk away with a detailed summary document and action items for self implementation

Solutions:

  1. Implemented the 50/20/30 Starter Budget
    • The first step to optimizing Jackson’s budget was to classify his cash flow into 3 categories. A great place to start is the 50/20/30 rule:
      • Fixed Expense Target: 50% of Income
      • Savings Target: 20% of Income
      • Variable Expense Target: 30% of Income
    • Turns out Jackson was able to reduce a portion of his fixed and variable expenses and allocate them to savings. Accounting for all his expenses helped Jackson realize how much free cash flow he had to dedicate to savings.
  2. Opened an Online Savings Account for a Home Down Payment 
    • With his new found savings, Jackson was able to save more towards his goal of buying a home. His first thought was to invest this money in the stock market. Given he wants to buy a home in 2 years, this would be an ill-advised move. While the stock market is a great place for long term investments, it can be extremely volatile in the short term.
    • The advantage of an Online Savings Account was a higher interest rate. Jackson was able to increase the interest rate on his savings to 2% (up from 0.25% at his local bank). It was also helpful to have a specific savings account for a specific goal.
  3. Optimized Jackson’s Student Loan Payments 
    • Through our 50/20/30 savings plan process, we realized that Jackson had been paying an extra $200/month towards his student loans. While this was a great move by Jackson, he could have been doing it more efficiently. It turns out there were actually 8 different loans with 8 different interest rates within the 1 monthly payment (ranging from 3% to 7%). Instead of spreading the $200 across all the loans, Jackson is now directing all extra money towards the loans with the highest interest rates.

Results:

Jackson now has a detailed plan on his areas of concern and a great baseline for building his wealth in the future!

Additional Mock Client Scenarios:

Check out our Growing Family and Mid Career Professionals  mock client scenarios!  

SCHEDULE A CALL

Want to learn more about Activate Wealth and see if you may benefit from our solutions? Schedule your 15 minute intro call here: