“Justin’s style of investing gives clients a high probability that they will end up in the top 25 per cent of investors without the stress.”
The late Simon McDowall
Business consultant & former MD of Goodman Fielder
I have a confession to make. Like those mechanics who don’t service their own cars, I am a financial planning professional who doesn’t have my own financial plan.
Now let me say upfront that not having my own plan is ridiculous. I have been in the industry for well over 10 years, I have access to all the resources, and I am surrounded by exceptional advisers and clients.
So why haven’t I got my own house in order? My excuse is that I am your typical 30 something. I spend all that I earn, I have debt, I am enjoying life and am not worried about the future. I believe that the biggest card I have to play is time. I have decades and decades of time on my side so why should I plan for my nest egg now?
Having said this I reached a turning point only last week when the penny finally dropped and I realised how my work could help me.
For the last 7 years I have been creating cash flow scenarios for our clients and listening to the adviser and our clients discuss cash flow assumptions and implications. Although I could see how valuable the cash flow scenarios were to our clients, I was not sold on them for myself.
The other day we had our monthly team meeting at which the benefits of using the cash flow tool for our own planning came up in the discussion. I decided to be honest about my view of the cash flow modelling and consequently I told everyone that I couldn’t see the value of it for me personally. I know that I of all people should have used the tool given that I am a natural planner and love to track against my targets. However, despite this I couldn’t accept it as a viable tool because as far as I was concerned, putting in irrelevant assumptions like earning three times my current income, was a pipedream, and therefore why should I bother?
What I realized during that open discussion was that the reason I didn’t see the value was simply because I wasn’t applying realistic, achievable and relevant assumptions that I believed in.
Now that I’ve realized this, I am ready to build my own cash flow scenarios and begin to look at questions such as: what if I didn’t make any changes and kept the status quo? What would that look like in 20 years time? Or, in the event that I was disabled and unable to work, how much would I need so that I could financially support myself?
I am amazed at how quickly my view has changed. It is actually an exciting step to know how much I need to live the life I want, and more importantly, to know how much I need in a crisis.
I now see the real value of the cash flow tool. It’s all about achieving a measure of peace of mind by knowing that I am in control of my financial situation and will be well prepared if something unexpected happens.
I hope my blog helps you to decide to take action about your cash flow, regardless of what age or stage of life you are at.
To find out more please contact Melissa Oliver on (02) 8908 5300 or firstname.lastname@example.org