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Article 11 Making Personal Sense of the Financial Meltdown
Monday, 22nd June 2009
In the past 18 months, share markets have fallen by around a third. Average house prices in Nottinghamshire, over the last 12 months, are down by 6.6% and interest rates are now 0.5%, some 5.25% lower than July 2007.
It is common to hear Wealth Managers, Financial Advisers and Private Bankers reassuring people “compared with the index…”, “against the average…” or “relative to most people…”, but the important question still remains: What does this mean to me and my future? If we do not know the answer to this, how can we possibly know how to react or respond as individuals? ‘Do I have to work longer, spend less, save more, take more risk, modify my aspirations and objectives?’
The question ‘What does it mean to me?’ should be on all our lips when we meet with our advisers. This can really only be answered by carrying out an exercise in comprehensive financial planning.
If you do have a detailed, well thought through financial plan, it should include a lifetime cashflow analysis, income and expenditure forecast and realistic growth/inflation/tax assumptions you are happy with. If you have this then you will doubtless be well on your way to answering the questions of personal impact that we should all be asking ourselves. If you don’t have a financial plan, then your response could well be based on foundations of sand.
There is a world of difference between the traditional financial ‘advice’ provided by the banks, tied salesman and the service offered by a professional financial planner. Comprehensive financial planning makes us all face and answer questions – pleasant and unpleasant – that must be confronted before any informed decision on how and where to invest; what risk - if any - we need to take, how much we need to invest into or take from our investments in order to help meet our goals. None of this can be done, without taking responsibility for our future financial requirements and regularly reviewing our plans, in alignment with our objectives.
For an initial financial planning consultation at our expense please contact us using the 'contact' link
