It’s fascinating talking to people about what’s important to them.
Asking “What’s most important in your life?” can stop many in their tracks.
They have come to see us about managing money, they want specific advice on certain areas like retirement or investments and wonder what on earth this question has to do with what they have come to see us about. There is no need for you to delve as “we are on top of things”.
… Chaps, I’m afraid you’re the worst culprits here!
Yet, when encouraged to think more deeply, we receive some fascinating responses.
Below is a list of typical responses from our clients:-
• I’d like more time to spend with friends and family
• I wish I didn’t worry about money
• I’d love to go off and travel for a few months
• I would like to help out our children financially
• I wish I could retire earlier
• I’d love to spend more time on my hobbies
• I worry about my exit plans from my business
• How can we pass money to our children without paying tax
As financial planners, we are here not merely to manage money but improve people’s emotional lives. If you prefer, improve wellbeing through financial planning.
Besides physical health, much of wellbeing is centred around emotive feelings:-
• Self esteem
• Being more in control
• Being empowered
• Having realistic choices
• Hope and anticipation
We find that financial planning helps people transform relationships with money by making permanent changes to attitudes, beliefs, and behaviours. Naturally, we are influenced by our past, our upbringing and experiences. With it comes all manner of predetermined views, many passed down through the generations.
It has been estimated that 90% of all financial decisions are made emotionally and so separating financial and emotional wellbeing can be difficult. However, here at Blue Sky, we don’t want you to separate them; we want you to have stronger emotional connections to your finances, based not on gut reactions or long-held views but instead on comprehensive planning.
We find that many have become a slave to their mortgage, to their pensions, to their work or their pre-occupancy with avoiding inheritance tax. It’s also common to see people building up vast investment portfolios, yet being unable to feel as though they can withdraw money because they don’t want to see the value fall. As we often say, ‘there is no point in being the richest person in the graveyard’. Enjoy your money whilst you have your health is our motto. To execute with confidence though, it is important to plan ahead.
I can reel off numerous scenarios whereby there was an initial resistance to planning as the protagonists ran a tight ship with regards to their day-to-day finances. In one recent situation it created such anxiety to the wife, who wasn’t typically party to the finances of the household, that she used to bargain hunt all the time, despite them being in a wonderful financial situation. She took on board her husband’s anxieties around money, fuelled by changes in his company pension and legislative changes around his industry. Yet, they were worth circa £2.5million with a final salary pension scheme to boot. Undertaking our financial planning programme relieved them of their anxieties and empowered them to take control and look at the bigger picture. As a result they have moved to their dream home and he is about to retire much earlier than he thought possible.
Essentially, financial planning reduces anxieties, explores possibilities and creates excitement about the future. Perhaps most relevant, is that it helps you focus on what’s most important in your life.
Clients of ours, reading this blog, will be nodding in agreement. Their glass is half full. Is yours?