Planning: Your Partner for Financial Success

The most common piece of feedback we get from new clients is that they wish they had come and seen us 10 years ago – so why do we leave it so late when it comes to financial planning?

Whether you’re a professional, a business owner, or self-employed, financial planning is critical for understanding where you want to go in life and how you will get there. But more importantly, it provides you with confidence and clarity around the future, which enables you to get the most out of and enjoy the present.

Step-by-step

Financial planning starts with discovering what is important to you, both now and in the future. Often, we focus on things in life that we think are important, like buying a new car or investing in the latest fad, but not the things that matter to us or bring us fulfilment, like being able to spend more time with our family. We often chase what others are doing, rather than our own goals and dreams.

The next step is to create a financial overview, including your assets, liabilities and income streams. You should consider whether these will change materially over time and whether there are any financial commitments or receipts that will apply in the future. You will also likely consider what your future work and retirement plans are and how much you would like to spend in the future.

Once there is a clear view of your personal and financial goals and your financial position, the planning work begins. The planning work needs to consider your risk profile, debt repayment, an appropriate saving strategy, how to take advantage of retirement plans and an overall top-down investment strategy. A financial plan should also consider risk management (i.e., insurance) and asset protection and estate planning (i.e., Wills). The outcome of the planning exercise is to bring all these considerations into a cohesive plan supported by financial modelling which helps illustrate the potential outcome of the plan in the future.

A long-term view

At this point, it is easy to think the planning work has been completed, but it is only the beginning of the financial planning journey. The purpose of a plan is not to predict the future, rather it is to help make informed decisions that result in action. The one certainty in life is that things will change, and you will constantly need to make financial and personal trade-offs along the way. The power of financial planning is coming back to the plan regularly and using it to continue to make good decisions year after year to ensure you provide yourself and those you value the best opportunity to achieve the things that are most important to you.

The above may sound simple, but the reality is most individuals or couples leave their planning journey too late, or never start at all. Working with a financial adviser to apply objectivity to the process, challenge your thinking and provide guidance and advice along the way can add significant value to your future self.

At Cambridge Partners we help our clients build their best future. Our advisors are here to help you with the financial planning process. Contact us today, and let’s start your journey, one step at a time.

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