Man surrounded by crowd

Why it’s important for me to do as I say

One question I’m often asked in discussions I have with clients is “have you done this yourself?”

Usually this is in relation to a specific piece of advice I’m offering, but occasionally I’ll be questioned about my wider financial planning process.

A similar thought may have crossed your mind when reading previous newsletters and articles I’ve written – all of which contain tips and guidance.

It’s a very fair challenge that always deserves a response.

I believe it is only right that I lead by example and follow the same advice that I give to you.

My wants and needs are the same as yours

Because no two people are alike, everyone’s financial circumstances are different.

Behind that truth, however, is the fact that ultimately, we all want pretty much the same thing when it comes to planning our financial future.

Like me, you’ll want to ensure your family are protected should the worst happen and you’re no longer able to provide for them.

You want to save for your future so you can enjoy a comfortable and rewarding retirement after you stop working. So do I.

You’ll also want to make the most of your savings and investments, reducing tax and charges so your money is working hard for you. My sentiments are exactly the same.

All of those are deliverable and achievable if you have a robust financial plan in place and review it regularly.

Practising what I preach

Let me illustrate this to you with five examples of steps I’ve taken that correspond to advice I’ve given you in recent articles.

1. Ensuring we have sufficient life and critical illness cover

When we recently increased our mortgage, we increased our life cover and critical illness cover at the same time.

This ensures that, in the event of death or being unable to work, a lump sum will be payable to ensure our family doesn’t have to worry about future mortgage payments, along with an additional lump sum to go towards covering ongoing expenses.

Both of these are now set at a level that I feel will never need to be increased again.

2. Reviewing my savings rate

Every time my income increases, I’ll make sure the amount of money I’m saving – either into investments or into my pension – increases at least proportionately.

It’s too easy to continually kick the can down the road and delay setting money aside for your future. The best time to start saving was 10 years ago. The next best time is now.

3. Saving for my children

The power of compounding growth means that the sooner you start saving money the better.

When our daughter was born last November, I set up a Junior ISA (JISA) in her name and have been contributing to it since. The extended time frame means it should hopefully provide her with a substantial lump sum when she reaches 18.

I already have a similar arrangement in place for my son.

4. Not obsessing over my investments

You’ll often read in my articles about the importance of not continually checking your investment values. Over-managing can lead to you making potential mistakes that can lose you money. Investing is a long-term game, and the less you check your portfolio, the less likely you are to meddle.

I check the value of my investments very infrequently – particularly during a downturn. I don’t think I have looked at mine once this year!

5. Buying low

I often quote Warren Buffett in articles. Not only is he very quotable, but nearly everything he says makes sound financial sense. One quote that always sticks in my mind is “be fearful when others are greedy, and greedy when others are fearful”.

So, following this advice, when fund values are down, I put any spare cash I have to work and invest it whilst markets are on effectively on ‘sale’ – which means I am buying more units in the funds that I invest in.

The value of financial planning

Clearly, I would only recommend you do any of the five things I’ve highlighted above if the circumstances are right for you. Your financial plan is bespoke to you, and will form an overarching strategy rather than just a series of individual events.

An effective financial plan will act as a road map for your future, with the ultimate destination being your long-term financial independence and security.

Get in touch

If you’d like to talk about your financial planning strategy, please get in touch.

You can call me on 07769 156 250.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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