Last month I explained some of the steps that people can take in building a financial plan, but you might ask “Why should I bother with a financial plan? Can’t I just invest wisely?

I must admit that I can’t recall one client ever starting the conversation saying: “I need a financial plan, can you help me?”.

In the main it is questions such as:

  •   “I’d like to retire soon but don’t know if I can afford it?”

  • “How do I get a great return without taking (much) invest risk?”

  •   “How are my investments doing?”

  •   “I keep getting sent masses of investment paperwork, I don’t know what’s important and what isn’t?”

  •   “I have too much cash, where do I put it?”

  •   “I’d like to invest but I’m worried about the future, times are so volatile and uncertain?”

  • “How do I know my adviser is doing a great job for me?”

Here’s what I think is important:

If you don’t know where you’re going, how do you know when you’ve arrived?

At Fort Financial Planning we fervently believe that great advice starts with creating a great financial plan. Why? Because a great plan discovers:

 ·         what you want,

·         when you want it,

·         how much you need,

·         what risks you need to take,

·         what rate of investment return you need,

·         how much cash to hold,

·         what you can safely afford to give away to loved ones;

It takes into account:

 ·         the ups and downs of our uncertain lives,

·         ill-health,

·         dying too soon (or too late),

·         moving now (or later),

·         long term care,

·         changing ‘chancellor’ mandates,

·         and taxation strategies, to list a few.

A great financial plan puts you in control of where you are going and sets a date and time of arrival that you can rely on.

How do you achieve a successful investment return if you don’t know when to buy or when to sell? We know in principle that you should buy when the market is low and sell when the market is high, however, the statistics say that most of us are panicked into buying through peer and news pressure and end up selling for the same reasons.

With a great financial plan in place, you can afford to ignore the pundits, soothsayers, scaremongers and time fillers and instead you can rely on long term empirical evidence to guide you.

Happy Christmas from us all at Fort Financial Planning.

Written by Mark Salter