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We are constantly bombarded about financial planning and the need to get our affairs in order. Often life is so busy that we put off these important tasks, which are much simpler to complete than we might think.
Throughout our working lives we are encouraged to save a certain percentage of our earnings every month. As we get closer to retirement, or when we retire, we realise the importance of having financial visibility and peace of mind that our investments, income, and financial affairs are all safely positioned and will provide for our desired lifestyle.
In this newsletter, we answer common questions about what a financial plan entails, what a plan gives you, the key benefits of having a financial plan, and the easy steps to put one in place for yourself.
What is a financial plan?
A financial plan is a working document that shows your financial position today and looking into the future. It provides you with important visibility of the lifestyle you may afford in retirement. The plan will include your long-term monetary goals, as well as various strategies to achieve those goals. Our state-of-the-art financial planning models will use your personal financial details to illustrate future financial outcomes for you.
A financial plan is tailormade to your needs and circumstances and should reflect your personal and family situation, tolerance for investment risk, and future expectations (such as future spending and lifestyle goals).
Our financial planning models include assumptions for inflation, taxation, investment performance and fees, resulting in accurate and comprehensive planning outcomes.
What does a financial plan give me?
A comprehensive financial plan will present:
- Your net worth today and into the future, in the form of a graph known as a “whale graph”
- How certain changes to the structure of your investments can increase the longevity of your plan.
- Your monetary goals, such as travel and other lifestyle goals:
- Your future living expenses, increasing by inflation, and including taxation:
- Your liabilities and when they are expected to be paid off, considering interest rates and monthly repayments:
- Your overall portfolio is split between liquid investments (such as savings and unit trusts) and non-liquid investments (such as retirement funds and fixed deposits). This split is important to ensure you provide enough accessible money to pay for your monetary goals.
How does a financial plan help me?
Financial visibility
Our financial planning model visually illustrates your portfolio growth, cash flows (such as income, tax, and expenses) and liquidity.
Liquidity analysis
We provide analysis and recommendations to ensure that there is sufficient accessible capital in your financial plan to pay for your lifestyle goals, holidays, and emergencies.
The right investment strategy
We ensure that your financial plan is matched with the appropriate investment strategy and portfolio asset allocation.
Tax efficiency
We can assess and model different solutions to reduce tax on income and growth, by considering different ways of drawing your income in retirement and various investment vehicles.
Scenario planning
We will model different scenarios and see their effects on your financial future.
Identifying problem areas
Going through your financial plan can help identify problem areas such as contributing to the wrong type of investment, future tax problems, estate issues etc.
Peace of mind
Rest assured knowing your financial plan and investment portfolios are structured and managed by our highly qualified Investonline professionals.
How to get started
Step 1: Discovery
You need to provide your personal information, such as your expected retirement date and who your dependents are, as well as details on your assets, liabilities, incomes, and expenses. These details will be used to create a profile for you in our financial planning model.
We have a simple-information gathering tool on our website (called Asset Map) that connects you to a series of questions you can answer. Your answers will help us better understand your financial situation, especially who is important to you, your current financials, and your lifestyle goals moving forward.
Step 2: Asset Map
Once you have completed the Asset Map questionnaire, we will provide you with a one-page detailed breakdown of your financial position.
See an example of an Asset Map summary below:
Step 3: Meeting
Thereafter, we will schedule a financial planning meeting with you in person or using screen sharing such as Zoom or MS Teams. During this session, we will model different financial scenarios with you.
Step 4: Review and Implement
After the meeting you will receive your full financial planning report, recommended investment strategy and structure.
You can get started with your financial plan today by completing our secure online questionnaire.
Or click here to speak with one of our qualified Client Portfolio Managers.