If you are going somewhere new it makes sense to get a map. In today’s world sat nav and road signs may be a substitute for a map but they are all guides that necessitate a) You know where you are starting from and b) that you know where you are going.
When you know these two things a map will make sure that you get there (hopefully!).
Financial planning is the same in that it enables you to understand where you are now, where you want to end up and when.
Breaking that down a bit. Knowing where you are now is about us gathering all the data about you and what your financial position is now. Clients bring in bags and folders full of stuff they’ve kept for years and never had the confidence to throw away. It can be a minefield. Policies may have matured or the company may have changed its name, or you may have forgotten about that policy you took out years ago anyway.
Our job is to gather and analyse all that data so we can help you understand where you are now.
The second, and probably most important thing, is understanding where it is that you want to get to and when. That can often need quite a bit of soul searching if you really want to get the most out of the process. Thinking ahead can be a challenge for many who are caught up with the day to day noise of work and family etc. In many cases the real question might be ‘how soon can I retire knowing that I won’t run out of money?’ There are many variants to this question, but typically they revolve around wanting to know about future financial security. ‘Will I run out of money?’
The third step is the analysis and research that we do:
- Are you in the right place now & if not what changes are necessary
- How you will get from where you are now to where you want to get to? This is where we create your map of the intended financial journey. In our experience people generally don’t come up with a plan themselves. They need prompts. They don’t know what they don’t know!
You now have a road map! A personalised financial plan. You are now no longer ‘winging it’ in the hope that it will all turn out OK. All is in order and you have a ‘go to’ someone who you have trusted to help you through this.
And from the navigational work that I’ve done with Scouts, I know that once you have worked out where you are and where you want to end up, constant reference to the map is imperative so that you don’t wander off course. You need a map to travel with. And the need to stay more focused becomes greater when conditions become more adverse. All of this is true of our client’s financial plans. Regular updates aren’t just about how an investment has grown. Regular updates are moments to check where you are on your journey and make sure that you are still moving in the right direction towards your goal. Life and all sorts of circumstances inevitably mean that, on occasion, you’ll wander off the path. And when you do, a map will help put you right again. It’s what we do and it’s what our clients love.
So while you sit digesting your turkey, maybe now is a good time of the year to ponder on what your financial journey might look like over the next year and beyond. ‘Winging it’ might work for a bit and you might get lucky but if you do travel without a map you’ll never know if you’ve got to where you wanted to get to.
Happy Christmas to all!