Asking questions that will shape your future
No two people have identical financial circumstances, which is why it’s essential you have your own total wealth solution that meets your individual needs and goals. Planning for financial success can be complicated in today’s world. A broad knowledge of everything from complex retirement and investment products to risk management strategies and tax laws is required.
Your total wealth solution is a financial roadmap that will provide you with clarity about your future. It should detail every aspect of your vision – your hopes, fears, dreams and goals. It should also describe exactly how your future will look and help you to know exactly where you are headed and when you are likely to arrive.
Take some time and ask yourself these questions:
Q: Can I sleep comfortably knowing I’ll have enough money for my future?
Q: Do I have the security of knowing where I’m heading financially?
Q: Am I ready for life beyond work?
Q: Am I going to be able to maintain my current lifestyle once I stop working?
Q: Do I feel empowered financially to live the life I want today and tomorrow?
Q: Have I made sufficient financial plans to live the life I want and not run out of money?
Q: Do I have a complete understanding of my financial position?
Q: What is ‘my number’ to make my current and future lifestyle secure?
Q: What will my children’s future hold?
Q: How can I pass on my wealth to the next generation?
Q: Is now the right time to sell my business?
Creating your financial roadmap
Part of this process is to understand your total wealth solution ‘number’ – in other words, the amount of money you’ll ultimately need to ensure complete peace of mind in knowing your future lifestyle is secure and making sure you don’t run out of money before you run out of life.
By getting to know you and what you want to achieve, we’ll be able to provide you with a detailed action plan that is focused on you. By creating a total wealth solution for you, we can get a clear understanding of your current lifestyle, your future and the life you want to live.
Initially, creating a financial roadmap will enable you to make the right financial choices and achieve the right balance between current responsibilities and future aspirations. All of this should enable you to achieve your desired lifestyle goals and objectives over time.
Liquidity needs
This is important to fund expenditures and meet liabilities for the next two to five years. Investments should be held in stable assets with low volatility, such as cash and/or a high quality bond ladder. Failure to plan adequately for your liquidity needs could mean you have to sell assets at discount prices.
By assessing your cash flow needs over the next two to five years and setting aside funds to meet them, you are creating a buffer between cash needs and market returns, thus reducing the risk of being forced to sell assets with high return potential at the wrong time. This strategy generally involves low-volatility assets such as short-term fixed income and cash, as well as borrowing facilities.
Lifetime balance
This will enable you to meet your financial goals for the balance of your lifetime and is characteristically well-diversified across asset classes with a growth orientation. The exact composition depends on your situation, goals, financial personality and values.
These assets are designed to satisfy lifetime needs. With short-term cash needs met by your liquidity strategy, these assets can be focused on long-term growth, with an asset allocation tailored to your risk appetite and the family’s aspirations.
Future generations
These are assets in excess of what you need to meet your lifetime objectives. Your approach to your legacy strategy investment portfolio could be more aggressive and less liquid than those investments in your liquidity or longevity strategies, given that the time horizon is much longer term.
This strategy is assigned to improve the lives of others, both within your family and in society. In many cases, this will include cash flows lasting beyond your lifetime, including philanthropic goals and assets earmarked for future generations.
Given the opportunity to focus over a very long investment time horizon, this strategy has the capacity to invest in asset classes that offer an illiquidity premium, such as private equity, or investment themes that seek to profit from long-term trends in society or technology.
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