Want to predict your future? All you need is a financial plan

If you had the ability to know how much money you would need to live the life you want to, would you take it?

Knowing this figure would mean you could decide just how much risk you needed to take on  your investments – maybe it’s not as much as you think. It would help you decide whether you can push the boat out a bit more on your house renovations. It would even help you understand when you can finally retire to live in that house in the sun you’ve always wanted. From my perspective, I see this as a pretty powerful nugget of information.

And it’s one that is available to us all. It just comes in the form of a rather dull sounding ‘financial plan’. If anything ever needed a rebrand, it’s the financial plan…. it sounds boring, but what it gives you is an incredible sense of freedom and confidence. And putting it together is really quite straight forward.

Are you on track?

As modern day advisers (rebranded as financial planners, of course) we will ask soft questions such as “what does money mean to you?” and “what is your monthly income target in a non-working world?” as well as discuss how much of your capital you are prepared to invest and what risk for potential returns you’re willing to take.

Armed with this information, we can prepare a personal income forecast that will show whether you are on track to meet your lifetime income target or not. And if you’re not, we’ll help you figure out what you need to do get back on track.

A modern day phenomenon

We understand why people don’t do it – it’s still a relatively new concept. This kind of planning hasn’t really been needed in the past. There was a time when you would work for one employer and retire on a pension worth around two-thirds of your salary. You’d have paid off your mortgage, seen the value of your property increase and invested wisely. In those days, it was pretty easy to know what money you would have coming in for the rest of your life.

Things are radically different now. This predictability has gone. But that doesn’t mean we can’t – shouldn’t – still have the sense of empowerment that comes with knowing how much you need to live comfortably. All it takes is a financial plan.