Hello 2019, I’ve been expecting you! Last year I saw a slew of clients who came to me for one main reason – they were not prepared to let another year slip by without putting some structure around their financial affairs. Some were seeking advice on how to structure their estate in later years, others were transitioning to retirement. They all had one thing in common; they acted at the appropriate times to plan for an eventuality such as retirement or death (chirpy for a Sunday morning, eh?) 

“OK”, you say, “I’d do the same.” But then let’s talk about those things you put on the long finger for 2018. Don’t let 2019 slip by without taking decisive action. I actively encourage clients to mimic Ryanair’s slogan of Always Getting Better when it comes to their financial affairs. 

How about we start 2019 with one simple goal?

Your goal for 2019 is first and foremost to figure out what’s important to you and what you need your money to do – maybe at this point it is there to provide an added layer of peace of mind by paying a solicitor to draft enduring Power of Attorney? Perhaps you have decided to cash in your share portfolio and plan a trip of a lifetime.

Whatever the goal, just remember that your money is there to support your lifestyle, not control it. 

When you’ve gotten to that point, you need a strategy to get you from where you are right now to where you want to be; it’s a really simple concept. It’s we we call goals-based financial planning.

One of the many reservations I have with the outdated, traditional approach to financial advice is that many brokers and financial advisers are typically “transactional“, in the sense that advice tends to rotate around financial products, and not the individual. These products in the first instance do not bring you any closer to understanding or reaching your goals. You end up with a raft of stuff, but in the absence of a strategy, what exactly has been achieved? 

Take action now

In business, you know you can’t ignore important issues, and financial issues, in my opinion, are the most important of all. Your home, lifestyle, children’s education – everything, is dependent on your ability to earn a living and manage your assets and liabilities. So, apply the same proactive approach to arranging your own finances.

Remember, ignore the noise

When you agree on the plan, it’s important to be aware of the things that can knock you off your perch. I always caution clients about the ‘noise’ in the financial markets. This coming year, turn down the noise – in fact, switch if off entirely! There is really only one person in the financial services industry you need to engage with and that is your independent, fee-only financial planner. Fee-only will ensure that the raft of financial products are keep to the bare essentials and conflicts of interests are significantly reduced as a result. 

So my advice to you is to focus on these areas for the year ahead:

  1. Know your long-term goals – and understand how achievable they are with your current lifestyle.
  2. Cash-flow is king – understand how your income squares with your expenditure. Include pension contributions, savings, investments and protection in that long list of expenditure. Ideally every cent will be accounted for. 
  3. Protect your wealth – understand and deal with debt and potential costs such as nursing home care for a family member or other unanticipated costs. 
  4. Grow your wealth – money in a current account will lose value because of inflation. You need to protect your wealth at minimum by keeping pace with inflation. 

Finally, if you’d like to join us on the 17th for an interactive Q&A session on the Fair Deal scheme, setting up an enduring POA and associated issues, you may do so here.