When I was a child, maybe around ten, my mum had a defined plan for my future career…

She wanted me to be an airline pilot! 

Her thinking was she could travel the world for free if I were flying the plane.

Conversely, my dream as a ten-year-old was to be a footballer! 

As the years went by, I realised I would never make it as a footballer and that the world of finance was much better suited to my skillset.  This didn’t stop me from playing football with my friends every chance I got and until very recently (birth of Emilia) I have played every week since I was that wide eyed ten year old boy.

One regret I have is that I never played for an actual Sunday league team fearing that I would not be good enough to compete.  A failed dream. 

Dare to dream

Fast forward to today.  I met with my client last week, a retired airline pilot, who flew the World as his career.  Barbados, the Balearics, and the Greek Islands were just a few of his frequent destinations.  Now retired, he keeps up with his love of flying and most recently had a holiday in America where he and his friends hired propellor planes and tried stunt flying in the clouds.

The meeting was in person where we investigated the current ISA and pension positions following the declining markets of the past few months.  The result?  No changes were needed to the plan and he can continue his lifestyle.  Whilst he has less capital than before, when we overlay future market performance the current expenditure level is supported.

We held an online debrief the following week to reinforce the points we had discussed.  At the meeting I had outlined the importance of having objectives (and dreams) as they keep us alive to our finances.  We don’t need money per se, it facilitates our survival and fulfils our desires so its pursuit is a pursuit of happiness in a way.

At the beginning of the debrief the client, excitedly, stated he was given such confidence after our meeting that although investment markets have fallen this year (on the back of previously great years) he could invest in a collector’s item, a 1960s Les Paul guitar.

It is an investment but as it won’t create an income stream, we must be careful to allocate it correctly in his planning but there it now sits.  An asset which we will keep an eye on from a valuation perspective from time to time. 

I dare say it looks great in his living room too.

Financial Planning Meetings

As part of our financial planning meetings, we encourage clients to sit back and dream. 

Dream of the life you want to have

Never accept that where you are right now is where you must be in the long–term

While not all dreams have to be big, I believe they should be shared and where possible written down.  We include these in our financial planning meetings.  These do not differentiate our approach from our competitors but give purpose to why we are discussing financial planning and investment management in the first place.

I like my clients to have a clear purpose in their planning.

Planning to have more family holidays is another great example.  We can set aside current and future capital with the purpose of funding these. 

Biggest fears

One of the biggest fears I have for clients is they get to say age 90 and have a huge capital base but at the expense of missed opportunities.  It would be such a shame if a client spent less now because they felt their investments would not support them in the long term.

It would be very easy to feel overly pessimistic on the current cost of living crisis and make cutbacks on lifestyle based on perceptions rather than the facts that belie their finances.  The hardest position may be to continue living your life as before, which is precisely what many of us should do.

We simulate market crashes inside our long-term income projections for clients so we deliver pessimistic but feasible options on how much can be spent each year without ever running out.  These are updated at least annually to ensure we are still on track.

If we ever have a client not on their chosen path, we use the financial planning meetings to steer them back.  We create sensible plans to allow objectives to be met on the back of realistic and pragmatic planning. 

Summary

So, my one simple trick to life?  Dream big with confidence. 

If you’ve planned well, the dreams will be realised.  But there is no point in planning unless you have a dream.

Financial planning should give you the confidence to live your life with freedom that even the hardest of investment markets and rounds of high inflation have been accommodated and mitigated via these techniques.

Thanks for reading.