BEACON WEALTH MANAGEMENT LTD
- What Would You Do If.....
May - July 2018
Meetings with new clients often proceed in ways that are unexpected.
I want to find out what an individual wants and why.
The want is not always easy to define initially, when followed with “why”.
So, why not give some thought to “what would you do if...”
e.g. you didn’t have to worry about money and why?
What would you do if.....you only had 5 years to live.....and why?
What would you do if....you only had 1 year to live.....and why?
From the above, and other questions, we can decide how your investments should be managed in terms of levels of risk, access, flexibility and tax efficiency.
Achieve what you want
Sometimes, of course, clients have done or achieved what they want, and purely want to live as they do now, with peace of mind or protection from Inheritance Tax or care fees.
Care fee planning normally involves individuals wanting to work out either the best way to save for them, pay them or avoid them.
When it comes to Inheritance Tax there are allowances and exemptions which cover gifts, gifts out of normal income and tax mitigation for the usual 7 year rule but also the special 2 year rule (that still allows full access to funds during and after the two year period).
Then there is the use of ISA’s, and I don’t mean Cash ISA’s which have very limited attraction, given the disappointingly low interest rates compared to our 9 year average of 9.85% - note funds can go down as well as up and past performance is no guarantee of future returns.
Cash ISA’s can be switched to Stocks and Shares ISA’s and full values are transferrable on death in some circumstances.
Now try asking yourself what’s been good and what’s been bad over the last 12 months.
The majority of people can quickly think of all the things that went wrong or could have gone better, and appear to struggle to think of the things that went well.
This is because more people are affected by negatives. For example, an individual feels far worse if they lose £5 than in comparison to the pleasure of finding £5.
This follows through when discussing the individual’s general attitude to investment risk and their capacity for loss. For many years general investments have seen steady growth but the recent market correction has reminded everyone that funds can go down as well as up.
So, staying with the theme of the article “what would you do if…..” and giving thought to the first question in this article “….if you didn’t have to worry about money”, you first have to think would you work, where would you go on holiday, would you move house or change the car?
Would you decorate, eat out more or take up a hobby?
Create a Bucket List
In answering the question try completing a bucket list of WHAT, WHEN, HOW MUCH and WHY.
Once you have done this you can work out just how much is enough in terms of capital and income for you to answer the question.
Often what I find is that most clients have a few ‘big ticket’ items but that most of the other things do not require that much, and that often clients can already achieve what they want, but either didn’t realise it, or were afraid to do these things for fear of the cost.
A common theme is that money is for when clients get old or for a rainy day.
Because most of us feel much younger than we actually are, it often takes a while to realise we have reached the age we were actually saving for.
Individuals seldom find time to actually sit down and think what they “really” want.
Go on, ask yourself “What would you do if……….”
Given all the above, different requirements usually exist for different client age groups.
If you have not given thought to your “what would you do if.....” give me a call on 01480 869466 or email and I will be happy to discuss this with you.
You should always seek qualified advice from an IFA, preferably a Chartered (APFS) or Certified (CFP) Financial Planner.
Should you require financial assistance for pensions, savings, investments, mortgages, protection, long term care, employee benefits... contact the team at Beacon Wealth Management Ltd.
Tel: 01480 869466
The Old Chapel, Thrapston Road,
Kimbolton, Cambridgeshire, PE28 0HW