We can all think of people perhaps for whom life is about living. New experiences are eagerly sought out, each day is attacked with enthusiasm, friends and sharing are important, and occasional setbacks are seen as minor hindrances to be learned from along the way.
Their life is about attitude - positive attitude. They are prepared to risk a little and through this they grow, they learn and they profit.
Compare this to others who could live to be 100 without ever stepping too far out of their comfort zone, for whom life, with a different approach, has much still to offer.
Attitudes to investment and therefore the resulting outcomes follow a very similar pattern.
Financial planning is not just about restricting spending now to invest the savings that will create a financially independent retirement. Life has to be enjoyed as we go along.
That involves having an understanding of the annual savings necessary to reach your retirement goals and tying this information together with short, medium and long-term family and personal goals.
Risk is a topic relevant to any discussion of investment issues and one I regularly explore with clients. It is vital that investors We can all think of people perhaps for whom life is about living. New experiences are eagerly sought out, each day is attacked with enthusiasm, friends and sharing are important, and occasional setbacks are seen as minor hindrances to be learned from along the way.
Their life is about attitude - positive attitude. They are prepared to risk a little and through this they grow, they learn and they profit.
Compare this to others who could live to be 100 without ever stepping too far out of their comfort zone, for whom life, with a different approach, has much still to offer.
Attitudes to investment and therefore the resulting outcomes follow a very similar pattern.
Financial planning is not just about restricting spending now to invest the savings that will create a financially independent retirement. Life has to be enjoyed as we go along.
That involves having an understanding of the annual savings necessary to reach your retirement goals and tying this information together with short, medium and long term family and personal goals.
Risk is a topic relevant to any discussion of investment issues and one I regularly explore with clients. It is vital that investors have an understanding of risk over and above that which is most people's intuitive reaction.
I note that my dictionary defines risk as “the possibility of suffering harm”.
I would like to offer some alternative definitions from a financial planning perspective -
• Having your retirement funds run out before you do.
• Having a fixed interest only investment strategy, using the after-tax income for living expenses each year, and having the value of your still invested capital eaten away by inflation each year, even at 2%.
• Wanting a secure financial future without being prepared to put in the work to make it happen. Schemes which offer easy and high returns are often just that - schemes. There is no substitute for having a plan and showing discipline in following it through.
• Not taking the time to examine the concept of risk, how it can work in your favour, how it can be controlled and whether the sometimes negative pictures that the word conjures up for you are really valid.
Our job as financial planners is to assist clients in being protected from these risks and to provide the information that gives you the best base for planning for the future.
