The Wonders of Cashflow...
Bigger Picture
Most people get in touch with us because they have a specific financial issue they want to get resolved. Things like:
I’ve got a bunch of pensions and should I be doing something ‘better’ with them?
My savings in the bank are earning VERY little interest and I want them to work harder for me.
I’ve inherited some money and I don’t know what the best thing to do with it is.
My financial arrangements are messy and could do with some tiding up.
I’m concerned I’m not getting as much out of my money as I could be.
These are all great reasons to get advice from a professional but, without knowing what the bigger picture is for you, it’s difficult to know what the solutions are.
We tend to ask some simple but thought-provoking questions. Questions that help you (and us) find the deeper meaning behind your money.
What do you need your money to do for you?
What does a successful outcome look like?
What’s your one, major, overriding financial objective?
What matters most to you in life?
What concerns you about money?
If you knew the date of your death, how would you change your life?
If you asked yourself these questions, how would you reply? Usually, the kind of answers that come up are:
I want to have peace of mind and financial security.
I want to know I can live the life I want without running out of money.
It’s important that my children (or grandchildren) are taken care of.
If I need care, I want to know I can afford it.
Will my loved ones be OK financially, if I pass away?
These are BIG answers to BIG questions and it’s this bigger picture stuff we seek to uncover because it’s likely to be far more significant than the technical issue they contacted us about in the first place.
So, Cashflow Planning?
I’ll let the video explain what it is…
Actually, it’s pretty simple. It’s a bunch of inputs in to a piece of software, along with some assumptions, to generate an output that’s easy on the eye.
That said, the inputs are YOUR future plans, the assumptions are based on what YOU think will happen and the output is YOUR life! That’s exciting and turns a relatively bland exercise in to something living!
A fair amount of thinking has to go in to the process but that work is rewarded by showing you a realistic picture of what the future might look like for you.
You’ll need to consider what your life looks like now (and what it costs), what you want life to look like in the future (and what that will cost) along with any other ‘variables’ you can see happening along the way.
It takes time to put this in place but, as I said, it’s a valuable exercise and one that will make YOUR cashflow planning experience highly personal to you.
What Next?
Producing cashflow planning for clients is highly rewarding work for us and highly valuable for our clients, not least because it helps making decisions (on the technical, money related questions) far easier.
You see, it creates a context within which major (and minor) financial decisions can be made. Every decision can be tied in to the bigger picture. The stuff that REALLY matters to you!
I hope I’ve made sense in this little article. I hope you’ve found it useful. I’m slightly evangelical about this issue but, frankly, what’s the point in making decisions with your money unless you know why you’re making them!
Until next time…