Outside The Box...
First Steps…
Let me start by asking you a couple of questions:
Why would you go and see a financial adviser?
What do you think they do and how can they help you?
Common reasons why someone might see a financial adviser (I like to use the term financial planner but that might just be semantics) are:
I probably don’t know enough to be able to manage my money in the best way.
I’ve got some pensions and I don’t really understand them. Are they any good?
I’ve had some letters from my pension companies and I don’t really know what they mean.
Recently, I inherited some money and this is the first time I’ve had a large sum to invest. Help!
I’m thinking about retirement and probably need to get my finances organised.
What’s the best way of making sure as much of my money as possible is protected from tax?
Of course, there’s a lot more but one or some of these might resonate with you. If they do, you’re not alone in feeling a bit daunted by this stuff. It’s complicated and can tend to create a bit of a mental block!
But Is That It?...
Well, forgive me for saying this but there’s usually more to it. You see, money is just a means to an end, a facilitator, something that gives you options to make decisions in your life. Don’t get me wrong, it can be a nice problem to have but it also carries responsibilities. Knowing what the ‘right’ thing to do with it can be scary!
When you’re thinking about this stuff, consider a few questions that might take you to a deeper place of thinking. These are questions I ask clients to help them create a context for making better decisions:
What’s matters most to you in life?
How do you want your future to look?
What’s important to you about money?
What worries you about money?
Where do you rank material wealth against health, family, legacy, etc?
How do you see your money helping you?
What does a ‘good’ investment outcome look like to you?
If you died tomorrow, what would you regret not having done?
These are pretty deep questions. You might think they’re a bit ‘touchy-feely’. But they’re important questions nonetheless and your money could help you unlock the answers and give you a sense of ‘possibility’. Isn’t that exciting?!
It doesn’t matter how old you are either. Just because we might be getting on a bit, does that mean these questions aren’t relevant? Of course not.
Trade-offs…
For most of us, the amount of money we have is finite. It might be that you can’t do everything. But what do you ditch and what do you keep? Wow, that’s tricky!
It might be that you want to buy a holiday home, make sure your loved ones are looked after, ensure you have enough put away for things like long-term care, the list goes on. But what if you can’t afford to do it all? What then?
This is where clear thinking and clarity comes in. if you have a deeper understanding of what truly matters to you in your life, well beyond the money, you’re then in a good position to make decisions that are right for you because you’ll have a benchmark of importance.
Proper Financial Planning…
Hopefully, you can see that there’s a fair amount of thinking that needs to be done before you start taking action with your money. A good financial planner (incidentally, I hope I’m one of them!) will help you through this journey of thought.
Absolutely, the technical stuff is important. The right financial products, a sensible investment strategy, tax-efficiency, etc. But this all happens as part of an overall plan. This is what you expect from a financial planner in the first place. But can you see that a good financial planner should also get you to think… perhaps differently?
It’s not rocket science but when it comes to money, most of us have a tendency to think about the technical side of things and, perhaps, don’t take the opportunity to reflect on what’s truly important to us. I’m the same as you, I do it all the time!
Amen…
I hope this little article has been useful. If you’re still reading it, I hope you’ve found it interesting? Perhaps ask yourself some of the questions I’ve posed. I wonder what your answers might be? They’re not easy! I wish I knew a good financial planner to help me!
Stay well and let’s hope life returns to normal as soon as possible after the virus. It’s difficult to know when and how things will end up but that doesn’t mean what I’ve talked about is any less important. In fact, it could be that this damn virus is giving us the opportunity to evaluate things differently.
Happy thinking!...