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The Three Things You Need to Consider When Thinking About Money

The Three Things You Need to Consider When Thinking About Money

I spend a decent chunk of my time helping people, typically aged 50+ and having built a decent level of wealth, answer one clear question…

Have I got enough?

Even though individuals come to see us initially because they want to better organise their pensions, or make sure their investments are working as hard as they can, or so that they can reduce their tax liability, most of us want to ensure that we have achieved financial independence.

In this blog I want to share three points you should consider when reviewing your finances.

1. Money doesn’t make us happy. It does however provide options.

There are certainly things we can choose to spend our money on which improves our wellbeing, but more money doesn’t mean more happiness.

What money does however is gives us a choice.

This may sound an incredibly obvious point, but it’s an important one to make…

I’m lucky enough to work with a wide range of smart, successful people who have built wealth.

However often they have reached a crossroads.

Perhaps they’ve been enjoying work less, or like many of us they’ve become more conscious of the finite nature of time. For a lot of people, the Covid-19 pandemic and subsequent lockdown has been the nudge they’ve needed to review their life options.

Often when I mention that money is a tool to live their lives and remind them that they can make some different choices ,my clients tell me that it’s just what they needed to hear to make some fundamental decisions about the direction in which their lives are heading.

So, the wealth they’ve built provides them with options, but only if you understand whether it’s ‘enough’.

Which brings me onto my next point…

2. Becoming clear on your financial situation provides either comfort…or confidence to take action.

When we work with clients our initial job is to provide clarity on where they are financially.

This includes helping with investing and tax but also requires me to help answer one fundamental question…

“If I make some changes in my life and spend more time doing what I love…am I going to run out of money?”

Regardless of whether my clients are financially independent or on the journey it’s important to make sure they know where they stand financially.

This provides my clients with one thing…

The clarity to make some important decisions about their lives.

So, if you’re going to take any action after reading this blog, do one thing…

Take some time to get financially organised. Collate all your pension and investment paperwork. Put it all in a spreadsheet. Take time to understand where you sit today financially.

This, in conjunction with thinking about what your ideal life should look like will allow you to work out your financial ‘gap’ (if you have one) … and this then allows you to take significant action to move forward.

It’s something we’ve explored in more detail in our recently published white paper (you can download this at https://www.cervellofp.co.uk/white-paper/) which will provide a useful framework that will guide you through what you should do if you’ve reached one of these ‘crossroads’.

However, often trying to explore all the options on our own without a professional to help you can be difficult…which brings me onto my next point.

3. Ask for help

Regardless of whether you choose to work with a financial adviser, a coach or your accountant, the results are clear…

Our research tells us that working with a professional in order to clarify your goals will improve your wellbeing.

However, working with a professional who you pay to support you isn’t your only option.

The government provides free high level money guidance through the Money Advice Service (www.moneyadviceservice.org.uk) or if you want help understanding your pensions specifically Pensionwise (www.pensionwise.gov.uk).

Regardless of whether you pay for a professional to help you or decide that you can make informed choices after getting the information you need, I wish you all the best clarifying your financial situation and your journey to financial independence.

Author: Chris Daems from Cervello Financial Planning

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