UBS Wealth Way

A larger home: dreaming is good, planning is better

Robert and Patricia H. are middle-aged parents of three children. They lead busy professional lives – and are full of dreams. They are envisaging the purchase of a larger home. What does this mean for them and their financial situation?

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Robert (47) and Patricia H. (44) are not far off their perfect dream home: the couple live with their three children (5, 9 and 11) near the city, surrounded by plenty of greenery. The landscape, the infrastructure, their local circle of friends – almost everything fits. “It’s just that the terraced single-family house seems to shrink with each additional year of the children’s lives,” Patricia H. explains.

The couple agrees: sooner rather than later, they need a larger single-family home – for several reasons. As soon as the children enter their teens, they will need more privacy. Robert is an entrepreneur who runs his own carpentry business. On top of that, he has always dreamed of having his own workshop at home where he can devote time to his hobby: creating wooden sculptures. Patricia, a corporate group lawyer, also longs for more space. She would like a spacious furnished office so that she can work from home more regularly.

A complete assessment

Robert and Patricia H. decided to carry out a financial assessment with their UBS client advisor based on these wishes for the future.

Can we afford a larger property and how will this project affect our long-term life goals?

That’s what Robert and Patricia H. want to know. Their client advisor takes these questions as an opportunity to analyze the family’s general financial situation according to the UBS Wealth Way advisory approach. On this basis, he draws up a plan for the family’s new future perspectives, focusing on their individual goals and taking an overall view of their asset situation.

During the conversation, it quickly becomes clear that there is nothing standing in the way of the couple’s new goals from a financial perspective. “You should be able to sell your current home at attractive conditions. You can then use the proceeds and your available liquidity to purchase your dream home and still achieve your long-term goals,” the client advisor tells them.

UBS Wealth Way: thinking finances in three dimensions

UBS Wealth Way ensures that no aspect of planning for the future is forgotten, the UBS client advisor explains. The advisory approach defines the three key strategies of liquidity, longevity and legacy by coordinating the couple’s short- and long-term life goals.

Liquidity for today

Maintain your lifestyle

You always have enough liquidity to maintain your current lifestyle, e.g., for:

  • Entertainment and vacations
  • Tax payments
  • Safety margin

Longevity for tomorrow

Achieve personal goals

You use your wealth for the long term to preserve your assets whilst achieving all your life goals, e.g., for:

  • Retirement security
  • Expenses for health and long-term care
  • Purchase of a second home

Legacy for others

Transfer wealth to future generations

You define what is important to you and how you want to help future generations or society, e.g., with:

  • Gifts for your family
  • Philanthropy
  • Wealth transfer to future generations

The client advisor starts with the liquidity strategy, which should cover planned and unexpected expenses over the next few years. He announces some good news: the family’s annual income exceeds their current expenses. In plain language, this means that the couple can put aside a sizable amount of savings each year.

Structured consulting approach: UBS Wealth Way

Our proven consulting approach links your current life situation to your short- and long-term goals. Wealth planning comprises three key strategies: liquidity, longevity and legacy.

Keeping strategies balanced

Robert and Patricia have not yet taken any special measures as far as the longevity strategy is concerned. “This strategy aims to help you maintain your accustomed lifestyle in the long term. Even if pensions take the place of earned income,” the client advisor reminds them. In the light of their new situation, he recommends building up assets in a targeted manner with a suitable investment strategy. In this way, anticipated income gaps in the third stage of life can be compensated for.

It is particularly encouraging that in the case of Robert and Patricia, a legacy strategy can also be developed in which the couple’s long-term investment horizon can be perfectly adjusted to their risk tolerance.

Planning means thinking ahead

What does the analysis along the three dimensions of liquidity, longevity and legacy mean in practical terms? The couple decides to restructure their assets. They will reduce their liquidity reserve – and invest the “surplus” funds.

Comprehensive planning also prepares us for unexpected challenges.

At the same time, UBS Wealth Way is not just a snapshot. Instead, it illustrates long-term development and allows Robert and Patricia H. to look calmly to the future. However, as stressed by the client advisor: “It’s important to check that the plan is still on target at least once a year or whenever any major life changes occur."

Knowing that they have planned their future with foresight, Robert and Patricia can now concentrate on the present. Patricia says to her husband enthusiastically: “Let’s take a look at some single-family homes in our area."

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