Real Life Financial Planning
I know that this is a blog and therefore part of my marketing strategy, but I hope that is helpful and not simply marketing messages. I thought that it may be helpful to provide you with a real life financial planning example of work that I did today for a client. The couple concerned have good jobs, Mr E runs his own business. They have a reasonably large mortgage and surplus income each year. They had very modest ISAs. They make payments towards their pensions and are planning fairly normal retirement dates, though would like to consider options about bringing this forward.
Most financial advisers hear the term “early retirement” and tend to direct people directly to maximizing their pension and ISA contributions as far as possible. This is all well and good, but isn’t exactly “impartial”. Impartiality to my mind means comparing different solutions to a problem and advising on the most suitable. As we charge fees (and always have) this is not a big deal for us.
Long story short, I advised that they sell the ISAs and use them to reduce the mortgage. We had identified and drawn up a proper budget for their lifestyle and we had already put enough cash in the bank for emergency reserves. The surplus income was directed at clearing the mortgage. This reduced the mortgage payment term by 6 years. As a result from the age of 53 Mr E would be able to reduce his earnings considerably to support his lifestyle (another set of questions). If he doesn’t want to do that, then from that point onwards we simply squirrelled the surplus cash (no mortgage payments) into their bank. Their net worth doubled against their original plan. This surprised even me, but delighted the clients. This is before we do anything sophisticated such as decent tax planning and investment. This was a “no risk” approach, that meant no adjustment to lifestyle, just a better organised and more disciplined and focused plan.
Of course the clients have to implement the plan and I shall be helping them to do just this, but the point is that great financial planning can make a massive difference to your future. So the real question is, isn’t it time you had a proper financial plan and gave me a call?