In yesterday’s article we talked about how we use the initial appointments as a way to better understand your current financial situation and determine what issues may arise that could stop you from achieving your goals. As part of that process, we use a tool called the Wealth Snapshot. In today’s article we’ll look at the remaining two categories in the Wealth Snapshot – Goals and Financial Confidence.
Where Do You Want To Go?
The financial planning industry is moving to provide goals-based advice. Under this model we help you determine your future goals and understand what they could cost. Once we know the amounts of money you desire in the future, we can work backwards and help you better understand how much you need to begin saving now to have the confidence you’ll have the right amount of money in the future, when you need it. So the amount of money you save is all based around your needs in the future.
I see many people who don’t know if they’re saving enough for their future. Sure, they’re saving and investing, but they don’t have a specific plan in place and don’t know if the amount they are saving is enough.
You can never accurately predict how much you’ll need in the future. There are so many factors that affect the outcome – returns, inflation, change in legislation, levels of contributions etc – that you can only aim towards a broad target. Importantly, you need to review your progress regularly to ensure you remain on track.
It’s a bit like taking a plane trip overseas. You can point the plane in the general direction of where you want to go, but things like weather, fuel loads etc can affect the progress. The pilot needs to regularly check the progress against the plan to make sure you reach your destination.
So it is with your finances. We can suggest a strategy that’s appropriate today, but your goals may change in the future, or legislation may change and affect your strategy. Regular reviews are so important to ensure you remain on track.
Financial Confidence
How confident are you that your current financial strategy is the best for you? How happy are you in the way you manage your income and debts? Are you confident that that your dependants would have enough money to meet their financial obligations if something were to happen to you?
Are you confident that you’re on track to achieve your goals?
These are questions we ask as part of the Financial Confidence section of the Wealth Snapshot. And we think they’re important.
Your answers to these questions reflect the intangible nature of what we do. We feel we’ve done a good job if your answers to these questions are positive. If you can sleep at night because you’re confident you’re on track to achieve your goals, then we’ve done our job properly.
There will always be events that occur that are outside of our control – such as the recent market downturn – but the important thing is understanding how they impact on your plan.
The Value of Good Advice
We’ll conclude this week by talking about the topic we started with – the Value of Advice.
As a result of advice from Geoff and I over the years, we have clients who are still receiving a regular income even though they’re unable to work. These clients held income protection policies that are paying them monthly payments that provide income to support them and their families.
We have clients who are no longer alive, but whose families are financially secure because there was adequate life insurance in place so that the existing debts were repaid and the beneficiaries live a standard of life they are use to.
We have clients who have been able to retire comfortably because they sought advice early enough and, through the discipline of regular reviews, stuck to their plan and accumulated enough capital so they could have the retirement they desired.
Above all else, we have clients who tell us they are very comfortable with what we’ve done for them and they can sleep well at night knowing they have a financial strategy in place the works for them.
What will you do now?
If you don’t have a financial planner, we’d love to help you with your financial planning needs. You can contact us on 08 8364 0066 or send us an email to arrange a no obligation, complimentary first appointment.
We regularly update our blog with new articles. To ensure you don’t miss anything, you can sign up here to have them delivered directly to your inbox. Alternatively, sign up for our e-newsletter and you’ll receive summaries of the blog articles plus regular email updates.
Impact Financial Coaching is a financial planning business in Adelaide, South Australia. We’d love to help you with your financial planning needs. You can contact us on 08 8364 0066 or send us an email to arrange a no obligation, complimentary first appointment.
Important information
This article contains financial product advice of a general nature only and is not intended to constitute personal advice. It does not take into account your particular investment objectives, financial situation or needs. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should obtain professional advice before acting on the information contained in the publication.
Financial Wisdom Advisers are Authorised Representatives of Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, a wholly owned but non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.
