After changing careers and requalifying as a lawyer, Cameron joined a large firm. He was loving the law and doing very well. His previous role in commerce gave him an edge over his peer group and he was on track to being a successful lawyer in a large firm.

However as he slogged away something nagged at him. He watched the partners in the firm and couldn’t help wondering whether they thought it had been worth the sacrifice. They didn’t look happy and when speaking confidentially, some said they had ‘no life’ but ‘felt trapped’.

Cameron loves sport and in particular triathlons. He has 2 young children and his wife is fairly senior in a large corporation working 3 days a week so that she can spend some time with the children.

The Dilemma

Both Cameron and his wife know that it costs a lot of money to live in Sydney and they have a strong preference to send their children to private schools. On the one hand they could choose to maximize their potential earnings so that they can have a good life and educate their children. The cost would be both parents working more than full time and in his view this would mean sacrificing being the father he wants to be and doing triathlons.

The other alternative is to keep spending to a minimum, and enjoy their childrens’ early years as well as spend time on triathlons. This may result in working to an older age or relying on inheritances.

The financial cost would be around $190,000 p.a. before tax and would get more significant over time.

The Analysis

Scenarios were developed to check and compare their financial situation in the event that:

• He stays in the profession long-term
• He goes hard for 5 years then halves his income thereafter
• He takes a role as a corporate lawyer working for a large organisation but on half the salary
• His wife goes back to work full-time
• He goes corporate, she stays 3 days and they borrow to fund school education

The Strategies

• Implemented cash flow tracking to ensure no wastage
• Used super to fund all insurance premiums to help with cash flow in the short term,
• The mortgage was converted to interest only for next 10 years,
• They accepted that their holidays would have to be very low cost and therefore local,
• They increased their growth asset allocation in super in order to target a higher return over the long-term.

The Outcome

Cameron decided to give up the route to partner and move to a corporate role. His wife continued to work 3 days per week but accepted that she would have to move to a five day week at some point and possibly work until an older age than she had anticipated. They didn’t compromise their children’s education but cut right back on expenditure and plan to use debt if necessary for the limited time they may need it and will work longer (past 65) if required.