Whatever stage of life you are in, future security is a concern for us all. We all want to enjoy the coming years but planning for your future can be a daunting prospect, especially with the current rates of inflation that are eroding your money. But that is not the only risk; pitiful rates of return, volatile markets and overpaying tax could also damage your future plans. So how can you grow your wealth, reduce your tax bills and fulfil all your ambitions?
"Most people take too much risk with their money and fail to review what they have in place."
Keeping money in cash is highly unlikely to deliver the levels of return that you hope for but investing can seem like too much of a gamble. And it can be, if it is not done correctly, because most people take too much risk when investing and don’t review what they have in place.
- Review. Continually and regularly reviewing what you have in place is crucial to your future success. For example, high charges, commissions and fees all erode the money you make, thus drag your investments down. Sometimes the charges aren’t as clear as they should be, so we can help you get to the heart of what they are and identify ways to reduce them. This could even mean retiring earlier or affording more of that bucket list.
- Manage Risk. It’s important to mention here that there is no such thing as no risk; even if your money is sat in the bank, it is still at risk from erosion by inflation. Everyone’s attitudes, preferences and tolerances to risk will be different, and as you move through life these will change. It’s vital to regularly review these, so you don’t blow up the plan later on!
- Diversify. Diversification is often regarded as the secret ingredient to investment success. The old adage ‘don’t put all of your eggs in one basket’ couldn’t be truer here! A diverse range of investments can help to boost your wealth, giving you more flexibility and financial security for the future. The split of your investments is so important; it is shown to drive between 80-90% of the returns you receive.
- Reduce Tax. Alongside diversification, tax efficiency is the key component to a successful investment strategy. There are some taxes that you must pay, but equally there are many solutions available to you that will help to reduce this figure, therefore boosting the returns you get, and again, maybe allowing you to retire earlier or tick off more of that bucket list.
- Have a Plan. The question we get asked more than any other is ‘will I have enough’, often by people who have a financial adviser! That’s because they are receiving financial advice but have no financial plan. If you don’t have a Lifetime Cash-Flow Forecast, you don’t have a plan, which means you don’t know where you are going. On a journey as important as your financial future, it’s important you can see the road ahead of you, so you can make the right turns today to ensure you get there as quickly and safely as possible.
If you want peace of mind for your financial future, you need to know you are getting the best return possible for a level of risk you are comfortable with, and that you have a clear plan to achieve what is important to you and your loved ones. If you are failing to plan, you are planning to fail!