If there’s one thing I have taken from the last few weeks, it’s the realisation of how little we are all really in control. It’s a leveller. No matter who you are, or how much money you have – none of this is optional (like weather and taxes!). To me, it feels like we’ve pushed mother nature too far. Perhaps we all needed a reminder or how fragile life is, the importance of community and how easy it is to get wrapped up in things that really, don’t matter.
Starting a new job in financial advice when the markets fall through the floor is a humbling experience. But hearing the conversations with our clients about falls in their portfolios, really has shown me how a good relationship with your planner works. And I know I’m going to love this job.
‘Will I still be able to eat?’– of course… Will I be able to live on my drawdown?’ Absolutely. Well it’s all going to be okay then’.
The reality is, those of us, lucky enough to invest or who have a financial planner, may have ‘lost out’ in the markets in the short term, but we are all lucky enough to be in that fortunate position in the first place. A good planner means that you’re not as vulnerable in these situations as you might have been. It makes it easier, or at least slightly less stressful, to not worry about how you are going to pay the rent of the mortgage. It means that if you do experience losses in the short term, they are within your financial capability to cope and it’s a risk that you understand.
Like most of the country, the prospect of being at home for the foreseeable, my mind is rattling with ‘to do’ list tasks. Stuff around the house, unread books, that garden – oh the garden! But with every nightmare – there is opportunity. I’m going to get my own financial house in order.
As a bit of risk taker, I’ve never seen the need for protection. For my wedding ring – yes – I can’t be trusted with pretty things, but for my life? Or Critical illness or income protection? Oh no no no. Well that’s going to change. Not only does this bring to the forefront how fragile life is, but also however positive or bullish we are, bad things really do happen. My very first client and good friend, had a horrible brush with cancer last year. Now he is the poster child for Critical Illness Cover having successfully claimed on his policy.
3 – 6 months of expenditure, stashed somewhere safe, cash deposit/easy access account/premium bonds. With the world moving towards a gig economy, free lancers and self-employed, this is a good starting point. Having a stash of cash, that we can access if the worst happens.
The government has announced a raft of help for small businesses. I’m going to be writing a piece on this when the details are clearer. Watch this space.
Cash Flow Planning
I’ve been learning how to use this software (which helps project your finances into the future with programmed variables), and the geek in me is in planning overdrive. We can programme your income and expenses, savings and investments and model what would happen in different market scenarios. Given, I’m not sure anyone modelled a corona induced market meltdown, but it certainly helps us test your financial resilience.
Parents and elderly loved ones
I’m sure those heading rapidly towards middle age like me, will be having the same, tricky conversations or message exchanges with their parents about staying in and looking after themselves. I do love their rebellious nature, but in this scenario, I’m putting my foot down. It goes without saying that this brings up all sorts of anxiety about looking after the people we love. Scotland has never seemed so far away. Much to their dismay - I’m going to be peppering them with financial tasks to keep them from going out. We’re getting their house in order too. Getting a strategy in place and securing their future for us all. Updating wills and getting Lasting powers of attorneys in place that will last longer than the virus.
If you’re at home, and any of this strikes a chord, we’d love to help. Drop us a call or a message and we can set up a chat at our expense. Let’s take control of what we can. Stay safe, stay positive, and get your house in order!
Ali (the newest recruit) & Team HFL