What’s your number?

Think carefully. How you answer will say a lot about you.

Of course, some of you reading this won’t know. Others will be too embarrassed to say…

But, it’s time for some transparency and openness. Otherwise, how will you know when you will achieve financial independence? Yes, that’s right, financial independence.

What did you think I was talking about?

Let me explain more

The number we are referring to is the amount of money you need to be financially independent and free.

• Free from the 9-5 (if only it was that, when was the last time you only worked a 40-hour week and took your allocated hour each lunchtime?)
• Free from debt
• Free from financial anxiety
• Free to do what you want, when you want

Financial freedom and financial independence both mean different things to different people. In many ways though, the concept is an evolution of retirement.

Previous generations worked hard to repay their mortgage and save into pensions. At some point, usually closely aligned to their State Pension age, they decided that now is the time to finish work. They then turned their pension fund into an income (more often than not buying an annuity) and retired.

In my view, there’s a better way

It starts by understanding what’s truly important to you and what you want to do with your life. As the saying goes:

Life is not a dress rehearsal.

You only get one shot at this, so dare to dream. Think long and hard about what you really want out of life:

• Leave your current job and volunteer? That’s fine
• Finish work at 55 and travel the world? That’s fine
• Cut back, work when you want to, and spend more time with the children or grandchildren. You guessed it, that’s fine too

It’s your life, only you truly know what you want from it.

You now need to know your ‘number’; the point where you have ‘enough’ money to achieve financial independence (where you don’t rely on that monthly salary) to pursue your chosen path in life.

This approach, is completely different to traditional retirement planning. It focuses on you, your aspirations and future, not a date decided by the government.

Where do I come in?

Initially, by helping you to understand what you want out of life, by reviewing where you are financially right now and with the help of sophisticated cash flow modelling mapping out your future, showing you what you need to do to achieve financial freedom.

The result of knowing your number?

The insight provided by this process is enlightening. You will be working towards a financial future that you have chosen, not one that’s been imposed upon you. While knowing the steps you need to take to build your chosen future is empowering and genuinely puts you in control.

If you would like to know more, please get in touch.

In the meantime, I can highly recommend the following books, which discuss the subject in more detail.

http://www.thenumberbook.com/thebook/

https://www.amazon.co.uk/Enough-Much-Money-Need-Rest/dp/1530800552

P.S. Notice how I’ve not talked about financial products once in this blog?

Sure, at some point, in order to implement a financial plan and to accumulate ‘enough’ we’ll need to talk about the basics of ISAs, pensions and so on. But they are very much subservient to you, what you want to achieve and the number that means you have ‘enough’.

The value of your investment can go down as well as up and you may not get back the full amount invested.
Accessing pension benefits early may impact on levels of retirement income and is not suitable for everyone. You should seek advice to understand your options at retirement