Your social media feeds are about to be filled with……………………” looking after your financial
wellbeing”, “5 or 6 Steps to financial freedom” and “It’s a New Year time to review your Financial Goals”.
Let me vent a little. Banks announcing that they are interested in your financial wellbeing seems a little uncomfortable. Have they changed beyond all recognition? What do they mean by financial wellbeing? What product do they have that will enhance you sense of Financial Wellbeing?
Lots of advisors will be sending social media messages and tweets, starting “5 ways to…”, “Best practices”, and all sorts of other well-meaning advice (menu items). To quote Alan Watts “The menu is not the meal.” But the advice is based on the advisors knowing and the advisors experience. At best, what you hear from these advisor’s is a guide, a direction for you to head toward. But, ultimately, you must taste the meal yourself. It is not until meet with the advisor that you truly “know” if they and their advice will really suit you. Speak to a few advisors before deciding what you
In an industry driven by payment for product placement you must be careful about who’s financial goals they are interested in. As a life centred planner, I am often amazed at how marketeers use the term “goal-based planning”. I have been on the other side and seen clients being made to jump through pointless hoops, participate in compliance projects, have annual reviews to prove their best interests and being served, and endless file reviews. All these exercises are supposedly focused on the importance of goals.
It is and always should only be about “YOUR goals”.
Most people only seek advice when they are looking for a certain outcome and they know they cannot do it by themselves. The difficulty is that the outcome they seek is not clearly defined. Consequently, some people will either avoid or skip the defining piece altogether. As a result, they end up at the solution phase due to some external influencing factor. “Mick got a great investment in Bulgarian property” is a classic example.
A Life Centred Financial Planner’s purpose is to help you achieve the best life possible with the money you have”
Many of the people I meet for the first time do not know with real clarity what they want. If you were asked the following questions how clear could you be?
What do you want from life?
Where do you want to live?
How much money do you need to live a comfortable life?
Where would you like to travel too?
Where do you want your children educated?
How many hours a week do you want to work?
What do you want to work at?
Do you feel you know or can be clear with your answers to these questions? In my experience the range of answers I get span from having some idea but not with any detail to I have not thought about it.
This is where it gets interesting for me as a Life Centred Financial Planner.
“Dreams are goals without time frames and costs.”
It is important to place measures around your dreams. That is not to stifle them but to see how they can be supported and what is important to you. Some examples are listed below: I want to pay off my mortgage early. How much earlier? And How much extra do you need to pay off? I do not want to worry about money or manage my spending. What needs to happen for you to feel that way?
I want my children to go to a private school. How much will that cost?
I want to retire comfortably. What income is enough, so you feel secure in retirement?
It is by teasing out time frames and costs we can start to process of planning. But it is not yet the complete picture.
In every plan be it a house plan or a business plan there will always be choices. For example in a new house you know you need taps for your sinks but what type of taps. Stainless steel, chrome, modern, traditional or dare I say it gold plated. All these choices come down to how they make you feel. You may not believe me, but they do. That is why we often do things that do not make sense. We buy stuff on impulse and convince ourselves after wards that it was a good deal.
Let us look at how a couple of the examples above can affect your feelings:
You want to pay off my mortgage early even if you must add €15,000 per annum to your payments.
How will you feel on the day you make the final payment?
How will you feel if this now allows you to perhaps consider an investment property?
You do not want to worry about money or manage your spending.
Does an annual income of €80,000 make you feel that you have enough?
How much income makes you feel comfortable?
If part of your income was passive or unearned from investments or property does that make you feel financially secure?
What do you feel you could do differently if you had this level of income that you cannot do now?
Never underestimate the power of your feelings. Spend some time thinking about the motivation for your choices. These thoughts and discussions will help you address what is important to you. There is no point in over funding a pension if you will feel more secure when you do not have a mortgage to pay.
Last of all do not feel embarrassed or shy about seeking help. Financial Planners have seen it all. We are not judgemental. You may have had bad experiences with money, made mistakes or feel you have not done enough saving. We are here to bring organisation, objectivity, accountability, be proactive and share our knowledge to help you with your financial stress. “Remember money is not the objective, living your best life possible with the money you have is.”