- October 23, 2019
- Bob Quinn
- Financial Planning
The driving force behind a goals-based financial planning strategy is simple (and obvious); provide the funds for you to achieve specific future goals. Specific goals are often times events-based; retirement, children’s education or buying a holiday home abroad.
So rather than focusing on generating the highest possible portfolio return or beating the market, the strategy instead is geared towards you getting to do the things you have in mind.
Taking a revolutionary approach to investing
The way the financial services industry has traditionally operated is that someone has a product to sell and goes about trying to make that product fit your needs. If you’ve ever sat through an investment meeting arranged by your bank, you’ll know exactly what I’m talking about. Starting with identifying your actual goals leads to a different outcome.
There are must-haves and nice-to-haves
Look at your short-, medium- and long-term goals. Are they clear in the first instance? How would you prioritise those goals in terms of which are necessary and which are desirable? While it may be desirable for you to have an income on retirement of €100,000 pa, it is necessary for you to have €50,000 pa to meet all your outgoings and have a comfortable lifestyle.
Think about the advice you got
Many clients that I meet may have invested in property during the boom. Buying the property fulfilled an investment need for someone with surplus savings, but was it driven by a future anticipated event? If your timing was lucky, you may have achieved your objective. But if you bought in 2006, your twins may have to change their college plans.
Remember: if it doesn’t look like what is being suggested will fulfill your objectives, run. Run a mile! (Best wishes to everyone running Dublin this weekend too).
Setting financial goals gives focus
There are other advantages of this particular approach; by pinpointing goals, you will be automatically more likely to achieve them.
Secondly, with those goals clearly in the crosshairs, you’ll be less likely to act impulsively based on a fad or scare and get off track.
If you would like to discuss any aspect of this, do not hesitate to contact me.