Financial planning needn’t been seen as complex. We misjudge planning, perceiving it as difficult, unnecessary or a preserve of the super-rich. None of these things are strictly true.
For me, financial planning is as simple as coming up with a realistic end goal. It means that instead of sitting back and hoping for the best, you’re deciding on an objective. Whether or not you achieve the full extent of that doesn’t matter, planning is not a certain path.
If you plan ahead and make the most of the means available to you, you’ll be in a stronger position long-term. Read our retirement investment guide:
You might have inherited money and be unsure where to begin. You might have accumulated wealth over a period of time and be waiting for the right opportunity. Either way, planning is sensible for those of us who are ambitious for ourselves, and the lifestyles we want to achieve. Let’s dispel some common misconceptions:
‘Planning is too complicated’
Financial planning does not have to be elaborate. Planning is, in fact, a rewarding and easy thing to do. Macdonald Wealth breaks plans down into simple formats. Most focus on a single end goal.
In it’s simplest form, planning is about two things:
- What do I currently possess, in terms of assets?
- How can I plan ahead towards my goal?
‘I don’t need to bother’
Most of us don’t have a financial plan in place, which is understandable. Only 4% of UK adults plan their lives in terms of decades. We lead busy lives and are reluctant to part with the money we’ve earned or inherited.
It’s my belief that individuals are better off planning ahead for their future than not.* Regardless of whether you achieve your goal, a plan is a pathway that you can use to sure up your own future.
I regularly help clients with financial planning and retirement plans. A lot find it difficult to break down their assets and conceptualise how to plan for what they want. Together, we look at shortfalls, contributions and sensible investment strategies.
‘I need more money, planning is for the rich’
You do not need to be a millionaire to justifiably get support with financial budgets. This is a huge misconception about planning. A lot of my clients invest less than £100k.
Financial planning should be accessible to everyone because everyone needs to take sensible steps to protect their future.
‘I should be saving more’
If you do have spare money at the end of the month, then save it today. This is the most basic and simple guidance around planning.
Should you be saving for your retirement? Yes. And of course, the more you save, the better. But be realistic. Stick to a budget and leave yourself enough money to manage important bills and living expenses.
‘Should I just leave things to my spouse?’
In most cases, I’d argue it’s always sensible to take a personal interest in your own financial situation. Relying on a husband or wife to ‘take care of it’ for you is risky, because you don’t have a clear view of your position. Take charge of your future, and make sure you know where collective funds are.
80% of the over 50’s don’t know how big their pension pot is, three in 10 Britons aged 55-64 do not have any pension savings at all. Whether it’s with Macdonald Wealth or not, it’s sensible and useful to seek support. I believe it’s a good idea to set your flag in the sand – choose behaviours that help you get closer to the dream goal. And my final piece of advice: it’s better to have a plan than none.*
Disclaimer:
*The value of your investment can go up as well as down, you may get back less than you originally invested. Circumstances are subject to change.
Performance from the past or yields quoted should not be considered as reliable indicators of returns. This communication is for general information only and is not intended to be individual advice.