It occurs to me that as a nation, we are avoiding many rather important questions. I love Britain and the freedoms we enjoy. I want a fair welfare system. However, until politicians, economists, financial advisers and the public at large face a few important questions, we seem destined (in the main) for more people reliant upon State support. In essence we collectively seem to agree that it is better for each of us to gain financial independence from the State or any other source of funds. There are variety of questions that come to mind, which challenge this assertion.
- Why is it easier to get into debt than to save?
- Why is it easier to borrow money at 100%+ interest than 4%?
- Why is it easier to open an online gambling account than an ISA?
- Why do more people play bingo than save for their pension?
- Why do more people spend more money on a mobile phone than invest into their pension?
- Why do so few people write a Will?
- Why do more people take out travel insurance than suitable financial protection?
- Why has betting become so popular and investing so problematic?
- Why have we become such a litigious society, yet unwilling to take personal responsibility?
- Why do so many people complain about low interest rates, yet do not invest?
- Why is the financial community obsessed with the risks of investing but not the purpose?
- Why do so few people take action?
- Why do so many fail to review their arrangements?
- Why do so many pay for a gym that they don’t attend?
To my mind, it seems that financial planning is rather like a diet. I accept that this is a contentious statement. Most people do not like dieting (by which I mean observing, controlling and restricting what is consumed). A “healthy” diet is only one part of the equation, we all know that regular exercise when combined with a good diet will yield results. I am someone that wrestles with this very issue. The problem most of us have is that we want quick results, we are generally unable to take a long-term perspective. Little wonder, given a culture obsessed by image and reaction. It doesn’t really matter how much you spend on a gym, how many books you read, how many videos/DVDs you watch, how much kit you buy… it all boils down to what’s going on in your head. Despite many motivational guru’s that have some considerable results for a few people, we all know that there are very few short-cuts and its all about a long-term perspective and a change in lifestyle. A key question is really are we prepared, willing and able to change? I don’t subscribe to the belief that this is a simple “change of attitude” but it certainly requires change.
I am open to thoughts, insights, suggestions and answers..
Dominic Thomas: Solomons IFA
I wonder if you have been or are an Executor for an estate. Most people will experience some degree of involvement in the Probate process at some point in their lives – for many it is the death of a parent or sibling. In simple terms Probate is the accounting for the value of an estate (upon death) of an individual. This involves proving his or her identity, residency and a full account of assets and liabilities.
To say that Probate can be burdensome is an enormous understatement. The Executor of an estate is responsible for the proper, full and fair accounting of the estate to HMRC, after all inheritance tax may apply. As a reminder, failure to to do properly can have the consequence of a custodial sentence. So it is not a task to be taken lightly.
Just stop to think for a moment. If you had died yesterday who would be responsible for being your Executor? you have of course clarified precisely who this is in your Will right? (see my guide to Wills). Anyhow back to the morbid thought of you departing yesterday… just think of all those statements, accounts, online accounts, offline accounts… have you kept your records up to date? Whether its a Bank or Amazon, Sky or a subscription to your favourite magazine, your tiddly share holding in BP or an substantial portfolio… where is it all? and all those passwords? As you may now begin to imagine, the list of “stuff” that you have can be daunting… so you pay your AA membership monthly, but why is there also a Green Flag certificate and an RAC one in your desk drawer filed under “car”. What do you do about loans or creditors? and where precisely are the Deeds for the house?
I’m sure you get the picture. Of course it would be easy to say – oh I’ll sort this out when I’m 80, but who knows how long any of us has left? If you have any life assurance you have already acknowledged this fact to yourself. So it is time to start getting prepared. A good financial planner will hold a lot of this sort of information, but many do not and even my own very thorough assessment of a clients situation is bound to have some gaps for some of these things. So without any panic, can I encourage you to think and begin taking action on this…. and by the way, if you live alone, who has the key to get in?
Dominic Thomas – Solomons IFA