‘No legacy is so rich as honesty.’

William Shakespeare, All’s Well That Ends Well

I received an email recently from Peter and Sue thanking me for taking them through the cashflow modelling process.

‘Thank you for the time spent with us on Friday. Having entered your offices with some trepidation – you know how much money management scares us – we must admit to being pleasantly surprised and reassured by your presentation.’

Lifetime cashflow and wealth modelling is a fundamental tool in pulling any client’s life plan together. This couple, by their own admission, had lived frugal lives, going without a lot of things to bring up three daughters.

Retirement was planned and beckoned at age 65, but an out-of-the-blue redundancy at age 62 changed all that. A rushed downsizing, life plan and rewritten cashflow model provided reassurance retirement was going to be OK.

Costa coffee or Costa del Sol?

In their revised model, these clients had an expense item for ‘Costa coffee and lunches’: about £2,400 per annum, an expense that was part of a good model.

I suggested changing it to £4,800 per annum just to see what little extras in life they could be acquire. The result was still an acceptable model. Then, with a twinkle in her eye, Sue asked: ‘Please could you make it £500 per month or £6,000 per annum?’

I did, and the model was still acceptable. Peter and Sue sat back, reflecting on a retirement overabundant with Costa coffee and lunches.

I interrupted their thoughts: ‘Do you know what you have just granted yourselves? Yes, you could have a retirement full of Costa coffees, but equally, you could afford to rent a villa for a month every year for the rest of your lives somewhere such as Portugal, Spain or America when it is cold and wet over here in the UK.’ A golden silence followed.

This frugal couple were suddenly entertaining a retirement lifestyle never contemplated nor considered before, way beyond their wildest dreams and imagination. Even the dreams we have never had can sometimes come true.

Peter and Sue have not rented a villa yet, but I know that Costa Coffee loves them.

Chris Mellor is financial life planning director at Succession Group