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GROW , PROTECT & TRANSFER YOUR WEALTH
by Sam Hulson of First Equitable
Life rarely stands still . Priorities shift ; circumstances change ; opportunities come and go and plans need to adapt . But regular discussion and reviews are the key to keeping on top of things . This means adapting your plans when things change , to keep you on course .
1 . WHAT ARE MY FINANCIAL GOALS ?
Generally , people ’ s financial goals change as they progress through different life stages . Here are some themes which might help you consider your own goals :
• In your twenties , you may want to focus on saving for large purchases , such as a car , wedding or your first home ;
• In your thirties , you may be planning for your family , perhaps school fees or your children ’ s future ;
• In your forties , your focus may move to retirement planning and growing your wealth ;
• In your fifties , paying off your mortgage and feeling financially free is likely to be a priority ;
• In your sixties , it is usually about making sure you have enough money to retire successfully ;
• In your seventies , your attention may turn to inheritance planning and later-life care . Other plans may also include starting your own business , buying a second home or travelling the world . Of course , everyone is different , so you might have a goal in mind we haven ’ t mentioned .
2 . ARE MY GOALS SHORT , MEDIUM OR LONG TERM ?
You may have a mixture of short-term ( less than three years ), medium-term ( three to ten years ) and long-term ( more than ten years ) goals . Moving to a larger property might be a short-term goal , while saving for your children ’ s university fees might be a mediumterm goal and retirement planning a long-term goal ( depending on your life stage ). You ’ ll need different strategies , and different saving and investment risk levels , for each of these goals .
3 . HOW HARD IS MY MONEY CURRENTLY WORKING ?
If your cash is currently in a savings deposit account , the interest rate you ’ ll likely be receiving is probably not going to be sufficient to keep your money growing as quickly as inflation is rising over the longer term . So your savings could eventually lose buying power in real terms over the years ahead . If you want your money to grow faster , you might want to consider allocating a portion of your savings towards investments . This may involve more risk than a savings account , but the amount of risk involved will be dependent on you and what you are looking to achieve , so you decide . Obtaining professional advice will ensure you choose investments at a risk level that suits your preferences .
4 . HAVE I PAID OFF MY DEBTS ?
It ’ s not always wise to start investing if you have debts that you need to pay off ( excluding long- term debts like student loans and mortgages ). That ’ s because overdrafts , credit cards and other shortterm debts can charge you more in interest than you could expect to gain in investment returns .
5 . AM I MAKING THE MOST OF MY TAX-EFFICIENT ALLOWANCES ?
All UK taxpayers receive certain allowances to help with saving and investing . For example , you may already have an Individual Savings Account ( ISA ) and be taking advantage of your annual allowance . You also have a capital gains allowance , a dividends allowance and a pension annual allowance . All of these will help you to grow your wealth faster - if you know how to use them .
6 . WHAT ARE MY RETIREMENT PLANS ?
A key factor in any financial plan is the date you plan to retire , as that typically marks a turning point from accumulation of wealth built up throughout your working life , to the de-cumulation phase as you start to spend your savings and pass your assets on to loved ones . Ensuring that those two elements of your life are well balanced is an important part of the financial planning process .
ARE YOU PLANNING WITH PURPOSE ?
After answering these six questions , your financial plan will start to take shape . However , you may still have more questions - such as how to reach a particular goal ? How to reduce a potential tax bill ? How to invest without taking on too much risk ? Or how much money you ’ ll need to retire comfortably ? In which case we can help . Please speak to us – we look forward to hearing from you . You can also email me at sam . hulson @ first-equitable . com
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