As we begin a new year, we’ve been thinking about how we can help our clients even more with all of their financial challenges. As part of this thinking we’ve identified a few ways in which we believe we help you manage your money better. So here goes…
Take a strategic view with your money
We all get sucked into focusing on the day-to-day and short-term challenges of our financial situation. Should we borrow to change the car? Are we saving enough for an upcoming holiday or should we just use the credit card for a few months? These are important challenges, but thinking only about these diverts your attention away from the longer-term picture.
We see our role as helping you to lead the life you want to live, both today and in the future, and that money is simply an enabler of this lifestyle. So we will help you take a longer-term view of your finances, looking at your income, expenditure, assets and liability. We might challenge you on your short-term budgeting, but with a view to helping you to achieve long-term goals! And we’ll help you actually identify those goals, and then work with you into the future to make sure you achieve them and live the life you want.
Stick to the plan
Particularly when investment markets are very volatile, there can be a huge temptation to ignore your financial plan, stay out of the markets and just keep your money in cash. And particularly with events like Brexit and other political uncertainties around the globe, there has certainly been a lot of volatility and uncertainty around!
However we will help you keep focused on your plan and not react to every bump in the road. Because we’ve seen that these events typically only cause short-term impacts. Take the US elections of a year ago as an example. Excluding 2008 when there was an unusually deep recession (with little to do with the election cycle), the average return of the S&P 500 index in US presidential election years going back to 1960 has been 9.1% versus 8.8% for all other years. Not much of a difference there! So we’ll keep you focused on the plan to achieve your financial goals, rather than reacting in a knee jerk fashion to every market shock.
Make more informed choices
We all make choices every day in relation to money. Most of these are relatively small and while we can help you with overall budgeting, these are choices you’ll make on your own each day! However we can help you with the big financial decisions that typically will be based on desired lifestyle or other life goals. For example, how will you decide whether you’ll retire early, or whether you’ll buy a place in the sun when you retire, and what’s the relative financial cost of each? Or what impact will a 2nd annual holiday have on being able to privately educate your kids, if that’s what you want? These can be hard questions to answer, but we can help you at least to understand the financial picture of all of these choices.
This is one we constantly talk to our clients about. We don’t want you lying awake worrying about your investments. That’s why we place a lot of emphasis on fully understanding your risk profile. If you’re not fazed by your investments going up and down frequently, then we may guide you towards a portfolio with risk in it, once you have the capacity to live with that risk. However if you are going to sweat over every movement in the markets, we are more likely to suggest that you minimise the impacts that these movements will have on your portfolio.
We’ll ensure that you manage your money, rather than your money managing you!
Build your confidence
This is probably the most valuable impact that we can have. We can bring a realistic picture to manage any financial insecurities you might have. For example, we had a client recently who was worried that she wasn’t paying enough into her pension plan. However when we analysed this client’s situation and her lifestyle objectives, it became very clear that not only was her pension funding adequate, in fact she will be able to retire earlier than she had thought and still achieve her chosen lifestyle.
You may be faced with a simpler financial decision and be unsure which way to proceed. In all of these instances we’ll be delighted to provide a 2nd opinion to help you reach your decision, and bolster your confidence in the process.
Yes, we will make sure you have the best value financial products and we will help you maximise the impact of every euro invested. But we hope that our impact on your money goes far deeper than this. Talk to us, we’re in your corner.