We Plan for a Reason

12 March 2020

A proven way of making a financial plan that is relevant and coherent to what we are seeking through life planning is lifetime cash-flow forecasting. If we look at a Lifetime Cash-flow Forecast, we can see events that we have been anticipating for quite some time: children heading off to college, home upgrades, family holidays and trips, later life care for your parents, and, of course, your own retirement.


Here’s why guiding you and your family through these life transitions is still the central focus of our planning, whatever is going on in Financial Markets and even during a significant bout of market volatility.

1. The Big Picture Is Always Brighter

Nobody could have predicted that a virus outbreak would disrupt global business right in the middle of Brexit and a contentious US presidential election cycle. But market history did tell us that the record-breaking bull market of 2009-2019 wasn’t going to last forever. What goes up eventually comes down (and vice versa!)


The further you pull back when you’re looking at market returns, the smaller today’s volatility looks, especially in comparison to big life transitions plotted on a 30 or 40-year Life Plan/Lifetime Cashflow Forecast. Continuing to work towards those events we can see coming is a much more effective strategy than trying to predict the next natural disaster, the next market downturn, or the next president. 

2. You Have Options

While major market volatility is never about just one thing, the coronavirus is making it hard for companies around the world to buy raw materials from China and sell to Chinese customers. Stocks in the energy, travel, technology, and consumer goods sectors have been hit especially hard.


A well balanced portfolio is not overly invested in any one company or any one sector. Spreading out your assets across a wide variety of investments – including more stable government and corporate bonds and cash savings – provides some options during volatility. Diversification gives the means to scout for rebalancing opportunities when prices are low. It also provides reserves that you can tap if you need a little extra help weathering market fluctuations.


What’s going to guide the decisions we make during this market correction, and the next one? How are we going to decide which levers, if any, to pull, and which to leave alone? 

3. Following Your Life Plan

We can’t plan for the next significant market shakeup. What we can do is use the tools at our disposal to keep you and your family on track to navigate your planned and unplanned Lifetime transitions and achieve your financial goals, no matter what’s going on outside of your home.


That’s why there’s no “one-size-fits-all” answer when folks wonder what they should do during a moment like this. The millennial who just started working and investing is at a very different point on his financial journey than the CEO eying retirement in the next five years. The couple planning to start their own business has different financial needs than the couple with three smart children all angling for “the best” schools. And the retiree planning to golf her way across the country probably doesn’t have the same concerns as the retiree whose husband is experiencing ongoing health problems.


These “what if” scenarios all require their own unique, personalised plans. Some folk will make the most progress towards their goals by sticking to their current saving and investing strategies, even as the markets are unsettled. Others might need to increase allocations to their cash reserves. And still others might look for “buy low” opportunities that will pay off in the long run. In each case, the client’s Life Planning Goals are our guide, not today’s headlines.


We can (and do) apply any “what if scenario” into our clients Lifetime Cashflow Forecast to explore the impact these may have on their overall Life Plan and make any adjustments necessary.


We understand that volatility can be worrying, especially if you’re nearing retirement or newly retired. If you’d like to review your most recent Lifetime Forecast (or indeed build one) please let us know. Whether news is good, bad, or somewhere in between, you can rely on our Life-Centred Planning process to keep your best interests first and your life goals in perspective. 

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4 May 2021
Is a financial check-up on your Spring-Cleaning list? Once you've tidied your lawn and emptied that out-of-control closet, let some fresh air into your home office and use these six tips to freshen up how you spend, save, and plan for the future. In our experience ensuring that clients remain confident in their financial situation now and going forward is important and setting aside some time, maybe a morning, is well worth it for peace of mind. By drawing a financial line in the sand, we can model the impact of your “what if scenarios” on current and future finances. We would advise doing this once a year in “normal” times anyway, but the events of the last year have almost certainly impacted upon your finances and may indeed have completely changed the way that you think about your future. 1. Pay yourself first. Making automatic contributions into your insurance, savings, investment, and pensions is a small budget adjustment that can go a long way towards building wealth over time. Is there extra money in your monthly cash flow that you could use to increase those investments? Do you want to save/invest more now - or enjoy a treat, break, holiday? How much extra could you contribute per year if you went from five coffee shop visits per week down to two, or started packing your lunch every day? Your life - your choice. 2. Review your monthly statements. Automating your investments and bill payments doesn't mean that you never have to check on them. Get back in the habit of reviewing your monthly bank and credit card statements. Make a list of all your recurring charges and subscriptions and consider cancelling anything you're not using enough to justify the expense. Also review the terms and conditions of your accounts and be sure you understand what fees, if any, your financial institutions might be charging you and what benefits you might be overlooking 3. Shop around. And if you don't like those fees? Of if the cost of your Satellite/Internet/Streaming TV bundles have shot up unexpectedly? Or if you never get near the data cap on your mobile phone/tablet service? There might be better deals elsewhere. Do a little comparison shopping, and don't be afraid to play some hardball if you can find ways to save a few pounds every month. 4. Check your credit report and score. You can also use a free credit score service to see where you stand with potential lenders and check for any major fluctuations in your score, which could be another indicator of fraud. Together, these reports will help limit any surprises if you're preparing for a big purchase in the coming year, such as a car or new home. Many such services also offer key services and options for loans, credit card rates etc 5. Scan and shred. Digitising your financial records can save space and simplify tax season. There are many apps and online services that can help you replace your filing cabinet with a cloud-backed folder, but snapping pictures of important documents with your cell phone is an easy way to get started. Once you've backed up your statements and receipts you can shred anything that's over three years old. Also review your hard copy filing system and make sure that your birth and marriage certificates, National Insurance cards, insurance policies, and Will are stored safely. 6. Talk to your financial planner. How have your short-term and long-term financial goals changed in the last year? Are you thinking about making a career change? Are your teenagers scouting colleges and universities? Is there a new baby on the way? Do you want to start making a bigger impact in your community through sustained giving? Is this the year you’re finally going to start your own company? Do you or your spouse have any new health care concerns? We use your answers to these kinds of questions to guide our Life-Centered Planning process. Annually, it’s a good idea to check if dust is settling on some out-of-date plans or if the path to any of your financial goals is feeling a little cluttered. Give us a call and we’ll schedule a meeting to shake off some cobwebs and put a fresh shine on the year ahead.
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