What is Financial Planning?

What is most important to you in life? Have you considered whether it can be achieved, protected or maintained with the capital resources you have now and will have in the future?

Your financial goals and objectives may be to:

• Retire early,
• Have your children attend private school,
• Own or build your dream house,
• Spend less time working and more time helping those less fortunate,
• Or anything that matters most to you.

Whatever your dreams and goals without a plan in place it is unlikely that they will be achieved.

For example, you may have a pension, you may be thinking about starting a pension or you may want to know where to invest this year’s ISA contributions, but have you thought why you want a pension or why you are investing in an ISA?

If you invest money without having a target you are gambling that your investment will provide sufficiently when you need it. Without knowing what income you need in retirement to maintain your desired lifestyle how do you know how much to contribute and how much investment risk you need to take?

Financial planning is vital if you are to accurately target your future financial needs and this is the essential difference between financial planning and financial advice.

Financial advice is essentially a product sale whereas Financial Planning is setting SMART goals for your finances that encompasses your current and future expected financial circumstances.

Financial advice may be an output of a financial plan but without the plan the advice becomes a financial guess.

To read more about what Financial Planning is read this blog ‘What is Finanical Planning?‘ or  click here to find out about the Financial Planning Process.

“You have a GP for your health, why don’t you have a FP for your wealth?”