5 Questions…

on 24 November 2015

Good financial planning involves creating a clear path to identifiable objectives.

But what if you aren’t sure of your objectives? Or if you’d like to know what might be possible but don’t know which questions to ask?

Investment management, tax planning, pensions rules – all these are important in getting along that path to your financial future. But before we can bring our expertise in these areas to bear we need to be sure we are clear on where we’re headed.

As the Chinese proverb says, every long journey starts with a small step. But in which direction?

These are not the only five questions you could ask yourself in helping to understand what you want your financial future to look like, but they’re a pretty good start.

  1. How much is enough?

This is the first question to ask, and yet it’s probably the last question to be answered. Some people can never have enough, but for most people there is an amount that will give them enough money to do what they want to do. Which means we  must work out what it is we want to do…


  1. If I had financial independence, what would I do with my time?

What would life look like in an ideal world? For some this would be travel, for others spending time with the model railway. Dream a little, but in a practical way. This isn’t an ‘if I won the lottery’ question. It’s more about really understanding what life would be like post work, and getting an idea of how it would need to be funded. This is a particularly important conversation for couples!

Tip: Write down your answer. Now throw it away and write down your second answer. Very often the first answer we give is constrained by what we think we can afford, by current thinking, by ‘permission’. As we come up with other ideas our minds broaden as we get deeper into thought. This often brings ideas that both surprise and excite us.

This process makes us realise that tweaks and small changes are often enough to increase our wellbeing.


  1. Do I work to live or live to work?

Would you stop work if you could? Or maybe you might stop what you currently do, but work at something else? For many the idea of not working is actually rather scary. This could be because they enjoy work as it gives them a sense of purpose. Stopping working – either through retirement or selling a business – may not be the right thing for everyone.

Retirement doesn’t mean what it used to. The idea of reaching retirement age then being given a gold watch and stopping work is no longer the norm. Reducing hours, consultancy work, charity work, there are many ways to ease into retirement. The question is, what would be right for you?


  1. What do I need to buy

The boringly practical question. What payments are coming up? Cars need changing? Mortgage to be paid off? Weddings to fund? University fees? What money needs to be set aside for future expenditure.


  1. Attitude to risk

This question doesn’t just refer to investment risk. It’s about an attitude to life. It can’t be assessed by a questionnaire. This needs discussion.

For example, how much is a current attitude to risk driven by a bad (and possibly unrepresentative) experience of investing in the past? How much risk needs to be taken to achieve the objectives? What is your capacity for loss (how much are you able and prepared to lose? – two different questions). Risk is a big area and agreeing a level of risk to be taken requires careful consideration.

The answers to these questions will not be easy but, as with any plan, it is the thinking process that is required which really provides the value and helps us to understand ourselves more.

Which in turn allows us to help you structure a financial plan that works for you.

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