Welcome to AAB Wealth’s first blog. On a monthly basis we are going to offer our thoughts and general wonderings on a number of financial issues which I hope you will find interesting… First up Stuart Ritchie, Paraplanner at AAB... Read more
Blog27th Jan 2015
Welcome to AAB Wealth’s first blog. On a monthly basis we are going to offer our thoughts and general wonderings on a number of financial issues which I hope you will find interesting…
First up Stuart Ritchie, Paraplanner at AAB Wealth, discusses Financial Planning.
What is Financial Planning?
Financial planning is an ongoing process to help you make sensible decisions about money that can help you achieve your goals in life; it’s not just about buying products like a pension or an ISA.
‘If you fail to plan, then plan to fail’
A Ferrari, a bigger house, never having to work again …all goals that sound good however rather than just wishing that you could do something or have something that’s important to you, why not make it happen using the process of Financial Planning?
As well as realising your dreams at the end of the process, you will have a sense of achievement: in addition you will feel in control and have the comfort of knowing that your financial life is ordered.
Your plan will provide you with a financial roadmap which, if you follow it correctly, will lead you to where you want to go.
In order to be effective your plan must be:
- Agreed with your partner, if you have one. Are your goals also his/her goals? In order to be successful you will both need to be committed and to enjoy your achievements as you progress towards your goals.
- Realistic and achievable: you need to be sensible about what you are setting out to try and achieve if you want to avoid disappointment.
- Written down: if it’s not written down, it doesn’t exist!
- Regularly reviewed and updated: in order to keep your plan on track you need to regularly revisit it and repeat the whole planning process to keep it up to date.
The above information is taken from the Institute of Financial Planning and I’d highly recommend having a look at some of the tips and strategies outlined on their website: http://www.financialplanning.org.uk/wayfinder
However we all know that the best laid plans of mice and men (and women) usually go awry which is perfectly illustrated by the illustration above but by following the steps above and regularly reviewing and updating your plan, you give yourself the best possible chance of getting that Ferrari, buying that house, giving up work or achieving whatever your chosen goal is.
Next topic – Investing
(Out)performance is not a financial goal and it’s not a financial a financial plan…if this is news for you, it’s time to seek quality financial advice.