Colin and Philippa
Equitus showed us how to reduce our exit point by 16 years.
Where we were...
This debt reduction principle is obviously so sensible and having Equitus manage it takes all the hassle out of it.
My marriage broke up in 2007. It was a great shock as I didn't see it coming. I am a professional man and felt very much in control of my life until this happened.
I moved out and signed the house over to my wife and children, feeling that they should have the family home. As a single man I knew a rented apartment was all I needed. I focused on work more than ever.
But then I met Philippa. What a surprise and how welcome. Philippa, too, had recently left a long term marriage and we found we had just so much in common. It had been years since I'd been to a movie or eaten out just for the fun of it and here we were treating ourselves and having the time of our lives.
It didn't take long before we thought of ourselves as an item and wanted to set up house together. Philippa had $50k from the sale of her marital property but all I had was $20k worth of shares.
How Equitus helped us...
Together, we had a deposit of $70k and as we needed 20% equity to buy we settled for a $300k townhouse because it was modern and maintenance free. We were elated at first but when we signed the loan documents we didn't know whether to laugh or cry, because it meant taking on a 25 year mortgage and Philippa was 50 and I was 54.
We both earn well and realized that if we upped the payments we'd be able to exit the mortgage quite a bit sooner. But if we upped the payments what would happen to our savings? What would we have to retire on?
Philippa said she'd heard some radio ad claiming that you could pay off your mortgage much sooner if you paid less interest. I said that that sounded ridiculous but then realised I was dismissing something out of hand without investigating the claim properly. Result: we are now Equitus clients.
It suits me because the planning guys at Equitus crunch the numbers and update any adjustments in income and then once a year we sit down and have a strategy meeting so we can reset the programme with the new year's objectives in mind. It's running your domestic economy like a business and I can relate to this.
Where we are now...
We've been with Equitus nine months now and have reset our exit point from twenty-five to nine years. This debt reduction principle is obviously so sensible and having Equitus manage it takes all the hassle out of it. It takes a minute a month to check whether you're on track. Also, Equitus is developing new software that will enable us to log onto their website and explore investment scenarios so we can really see how to drive our savings for our retirement.
To protect sensitive financial data, the names and images of the case study participants have been changed.