05 Dec Bringing a Fresh Perspective to Financial Planning & Advice – Habits of Good Financial Planning

Certain qualities have stuck out to me as vital indicators of success and forward thinking, and I hope that by sharing my findings with you, we can promote a conversation on achieving financial freedom through financial advice, for both the present and past retirement.

• Preparedness – The peace of mind you experience comes in the plans you make. I believe there to be freedom in financial planning advice as it allows you to be prepared for the challenges life may throw at you. This comes through protection in the present, and having enough in the future for spending; thus reducing the impact of risk events.
• Partnership – It is important to never face anything alone. You can always consult with family and friends about tough decisions and go to professional advisors when needed. You have connections all around you that can help you emotionally and financially.
• Perseverance – This is meeting obstacles with a firm focus and succeeding in the end through optimism. To attain a goal, you must persist past the obstacles even if you feel demotivated or as though you aren’t making progress. Have faith in the end goal and learn from your mistakes along the way.
• Consistency – Being consistent with your actions will build a habit in the present that affects your future. It is up to you, however, whether these are positive or negative habits. As such, your retirement years are directly affected by today. I want to reiterate that if you want to have a hefty sum saved at retirement you need to take the first step now, so ask yourself, are you helping yourself reach your goals?
• Adaptability – To be adaptable is to constantly review your situations and change your strategy as required. Life is hard to predict but in the present you can always make changes based on your circumstances. Many things change year to year, whether it’s your relationships, jobs, or plans but by being quick at seizing opportunity you never stay in the same place. An increase to your salary, reducing debt, or receiving an unexpected inheritance all leaves scope to readjust your financial position.

I have learnt these qualities through my internship as they are imbedded in the office at Tri Everest. They have influenced me to change my perspective into an optimistic future oriented focus towards clients in which I aim to find a unique solution to best suit their future by encouraging positive qualities that first improve livelihood, then subsequently financial plans. By considering the above traits that I believe crucial to a healthy, successful, and fulfilling life, this will help build a consistent habit that has time to adapt to your lifestyle as you age. Establishing this, any financial endeavors you undertake such as your pension plan will form naturally. I think that pension contributions are a great example of how the above traits align with financial advice since it involves a consistent and adaptable strategy planned alongside your financial advisor to help you prepare and build towards your retirement. This explores the full extent of financial advice and illustrates the benefit that long-term planning can have.

At first I considered contributions one of the most confusing parts of a pension. To put it simply, this is the fuel for your pension. This is the amount that you put into your pension, taking advantage of marginal income tax relief from 20% to 40%, lowering your tax bill. These contributions must be within an age related percent of your income. Considering this, a financial advisor would calculate this for you and would let you know if you taking advantage of your maximum permitted contributions. As well as that, your employer can contribute towards your pension, further increasing your funds. The flexibility that this offers has meant that I have seen a plan that suits everyone. This is your pension so by including these traits and habits into your lifestyle you will make your money work for you.

In the next two posts I aim to explore how to successfully implement financial advice, and what lessons we can learn from those who implemented such.

– ERNESTAS.