Lifestyle financial planning for creatives
Today has been another day helping clients to figure out what they want from the future. It is really important to me to understand what it is that a client is aiming for and in my experience this is really all to do with “lifestyle”. As I have said before, the main objective of great financial planning is to “ensure that your money doesn’t run out before you do”. In other words – to last for the duration of your life. When viewed this way, the financial services industry largely appears to be upside down – normally emphasis is placed upon achieving high returns or “guaranteed” ones (no such thing). However a financial planning approach starts with the end in mind – addressing our mortality and then prompting the discussion about what we want from life with the time we have left – however long this is we simply don’t know, but for most of us it is probably less than we hope for.
Great financial planning involves engaging with values – what is it that people really want to achieve and why it is important to them. This is not wishful thinking, but a plan of action – although sometimes (rarely) I need to suggest that for some plans to be achieved, significant alterations would need to be made. Today I was working with a composer who will hopefully have more of his work performed and published. Composers and indeed many people in the arts don’t really have a “retirement date” of course they want the option of choosing whether to work or not, but in practice, health permitting, there is no reason why individuals cannot work well beyond State Pension age. This can (and should) be taken into consideration when planning the future – what sources of income are available from royalties and box office receipts etc. Naturally one needs to make assumptions carefully and they should be reviewed – getting this “right” is not really the objective (initially) but appreciating and realising the various options enables further creativity when thinking about the future. I am a committed advocate of lifelong financial planning, when done well it reduces financial anxiety and stress, releasing greater creativity.