Arrival in Time

Arrival in Time

“There are days that define your story beyond your life, like the day they arrived”. Arrival, tells the story of an alien arrival (I’m not giving anything away). The film itself will likely get your grey matter working hard grappling with the concept of time. This is a very different alien movie, unlike any other that I have seen as it challenges the concept of time…well ok Interstellar did this too… and perhaps a little like the HG Wells story, but different in that it proposes time as non-linear.

Time as an image

As a financial planner, we use cashflow modelling in a very linear application. The present, perhaps a nod to the past, but a plan for the future. The result is translated into an illuminating image, which clients find very helpful indeed. Yet it is linear, which is of course it’s limitation. A great financial planning meeting will attempt to address questions about whether some of the plans in the future can be brought further forward, perhaps much more into the present. Never-the-less it is still a linear experience.

Life is a journey… and some

The movie Arrival is not really about aliens. It’s about communication and about being able to develop the adage “life is a journey, not a destination”. One that we play with in this site. Many people find financial services jargon to be fairly alienating. Communication is not something that our sector has done terribly well in the past. The film seems to ask the question whether we would change the image, if our life was reduced to a single image, with all its joys, but with all its pains. One might argue that there is something almost deity-like in this understanding of time and it is rather different from our more linear rational explanation. This might be viewed by the fairly expected traditional male approach of binary thinking, as often displayed in our world, with the “if you aren’t for us, you must be against us” rationale. This is given character in the usual full military display and response to anything different or other worldly. It takes a female linguist (Louise, played by Amy Adams) to have the humility and wisdom to listen and comprehend the message provided by the Heptapods.

Lessons from Arrival

Financial planning looks at the future and adjusts the present to have a better chance of reaching the one you want. Arrival, is more accepting of what is, when it was, is or will be, but all at the same time. Time is not linear. So, from a financial planning perspective, the movie doesn’t teach us a lot other than to remind us to listen to what is being communicated and attempting to avoid the binary choice mentality that is rarely constructive. However, the idea of being able to visualise and create an image of your life for you to see, well that’s very much an aspect of proper cashflow modelling, which is all about conveying your choices about the future visually.

If you haven’t seen it yet, here is the trailer for Arrival. I enjoyed it a lot.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Arrival in Time2017-02-08T12:46:26+00:00

Pensioners set to run out of cash

Pensioners set to run out of cash

The Social Market Foundation released a report yesterday called “The Golden Years – What freedom and choice will mean for pensioners“. This explores the new pension freedoms that were introduced and considers the experience of other nations where this has already happened to see what we might learn.

It will come as little surprise to anyone, that given the opportunity to take money from a pension, many people struggle to make it last for the remainder of their lifetime, yet this is precisely what underpins the point of a pension.

The report points to experience in Australia and the US where similar pension freedoms have been enjoyed. They note three main types of behaviour and problems.

  1. Cautious Australians – who withdraw less than 1% of their pension fund
  2. Quick spending Australians – one in 4 clear out their pension fund by 75
  3. Typical Americans – who withdraw 8% a year

Overspending and pessimism

I’m not going to pretend that this is an easy problem. As a financial planner I have to make lots of assumptions about the future and I typically advise clients that few of them will be accurate, but they are all reasonable, but just as importantly, they are reviewed.

In simple terms, financial planning attempts to ensure that you don’t run out of money. Great financial planning attempts to ensure that you get and keep the lifestyle you want. There are numerous assumptions that I have to make, not least of which is your life expectancy. Most people under estimate this. Pause for a moment. At the risk of boring you… as I say this to clients… if we take a conservative approach to your life expectancy and assume you live until you are 100, your money has to last longer and thus work harder… if we assume you live to say 80, then it doesn’t need to last as long or work as hard… but if you invite me to your 80th birthday party, I’m the least popular person in the room, because once we’ve had a drink, the cake and a bit of a dance, I turn the lights off. That’s it.

OK, you may have other sources of income (State Pension etc) which would continue, but the point is merely to help you grasp the significance of this assumption… which I find seems to work. Importantly we review this (its an educated guess)…  the day you die isn’t something that we can easily predict, but we can at least build scenarios into your plan.

The Destitute Pensioner

There’e a new film out which I plan to see as it stars the rather wonderful Maggie Smith. Its called “Lady in the Van” and is on general release on 13th November. Its based on a true story. I’m not sure if this was a lifestyle choice or something that was forced upon her, but it makes for a good script. Without proper financial planning advice, many pensioners are going to run out of money, the only way to properly engage with this prospect is to provide a proper financial plan which includes cash-flow forecasts, without it (as many advisers still appear to be) you are up the creek with the proverbial paddle. Here’s the trailer.

 

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

Pensioners set to run out of cash2017-01-27T11:05:54+00:00

What is great financial planning?

What is great Financial Planning?

Financial planning is something that I have a real passion for. It is my belief and assertion that when done well, proper financial planning is akin to a light bulb moment or a bit of an epiphany. In essence as a financial planner I address the fundamental question that clients ask (even when it isn’t verbalised)… will I run out of money?

Living Deliberately

A financial plan is essentially your lifetime goals, perhaps aspirations, but clear, well defined and thought-through goals. This process can take some time to get right – not because the process is difficult, but because most people simply don’t know what they want out of life. American life coaches probably call this “living deliberately” rather than “living by accident”. In other words – if you don’t have a lifeplan, how can you make good decisions.

Treasure the questions

The questions can be fairly straight-forward – “Can I afford to buy this house and pay off a mortgage, run it and still afford to live in it when I retire?” or perhaps “I’d like to retire from my job at 60 not 65, but can I afford to do so with all of my commitments?” or “I have worked hard to build my business, what I need to know is what is the sale price I must achieve to do all the things I am working for?”.

Sometimes the questions are less clear – “Can I afford to start giving money away to my children or will I need it later?” “Can I really afford to spend all this money in my retirement? will it run out?”… “What investment return must my savings and investments achieve as a minimum?”

Yes there are lots of assumptions, proper financial planning will involve use of some type of cash flow modelling – certainly assumptions about the future, but these are reasoned, reasonable and reviewed.

Seeing is believing… take it from a doubting Thomas

A great financial plan, will provide answers to the questions that you have thought of and hopefully quite a number that you didn’t. Seeing this graphically represented is a very powerful and profound experience, something that enables you to make better decisions and understand why a financial planner is no more interested in financial products than you are – we are interested in solutions.

What’s your passion? your dream?

Salmon Fishing In the Yemen” is a really great “little” British film which seems to capture an aspect of current times. I won’t give the plot away, (its well worth seeing with a fantastic cast and director) but in essence stereotyped cultural barriers need to be crossed in order to achieve an ambition… a vision, which sometimes means going against the flow.

Vision is more than eyes to see

To some, what on the surface seems daft, ludicrous or mad really poses the question – do you understand the vision? not just the “head-stuff” but the “heart-stuff” too? Great financial planning must connect with what’s in your heart, not just in your head, after all, we’re talking about your life, not a hypothetical one. As one of my favourite dance bands “Faithless” suggest “you don’t need eyes to see, you need vision” (Reverence track from the 1996 album of the same name).

Here is the trailer for Salmon Fishing in the Yemen, a movie that I really enjoyed.

Dominic Thomas
Solomons IFA

You can read more articles about Pensions, Wealth Management, Retirement, Investments, Financial Planning and Estate Planning on my blog which gets updated every week. If you would like to talk to me about your personal wealth planning and how we can make you stay wealthier for longer then please get in touch by calling 08000 736 273 or email info@solomonsifa.co.uk

What is great financial planning?2017-01-06T14:40:06+00:00
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