From learning how to budget to asking for help, building the right financial foundation requires good advice and a clear vision of the future. Here are our founders’ top tips on how to build financial security.
Start with the basics
It should sound obvious but when you’re in any sort financial difficulty, don’t be tempted to make high-risk financial decisions. High-risk investment trends like Bitcoin are highly unlikely to pay off, especially if you haven’t put the basic work into your own financial management. At Headway Wealth, we always advise our clients to start with the basics. Put money aside, budget well and have clear visibility of where your money’s going. Build up a financial cushion and good financial habits and then look at the next steps. If, however, you’re not on top of debts or you’re hoping for a quick buck after watching a YouTube star, you’ll likely lose money. If everybody knew to put aside a minimum of 20% or 25% of their income, they’d have absolutely no money problems in life.
Don’t invest in anything you don’t understand
Any investment that you don’t understand is a high-risk investment. With new apps and investment trends on social media, it’s easier than ever to invest, but it leads to unrealistic expectations and poor decisions. It doesn’t help that the glamorous lifestyles we see online make us think we’ll be sailing on a yacht with just one smart tip, but that’s not the reality. You don’t achieve huge goals without putting huge effort in, so ignore the self-proclaimed experts and get the basics right – and only invest your money when you’re confident you’ve got enough information and have done the reading.
Understand what your ‘legacy’ means
We love to speak to business owners about their vision for the future and of course, most of the time it’s all about their children. They’ve worked for years to build something up that they care about and they want to pass it onto the next generation, but sometimes though, they actually find their children have little interest in the business. This is why it’s really important to think not about the business itself, but about what it can unlock for you, and how that helps you leave a legacy that affords more freedom. So, building a legacy could be building a pot of money for your children so they can do what they love doing, whether that’s in sport or art or music – anything at all. It doesn’t always have to mean a career or house or wedding; sometimes leaving a legacy means gifting the freedom to explore without worrying about financial returns.
If you have dependents, you should have insurance. If you have debt, you should have insurance. It might seem like an unnecessary overhead, but a fundamental principle of financial planning and building future security is preparing for the unexpected. We can’t control everything life throws at us, but we can make sensible, responsible choices that make sure that the people we care about are taken care of, no matter what. The earlier you get insured, the cheaper it is, so don’t put it off.
Build your future today
Retirement feels like years off – even for people in their forties and fifties – but it’s not something you should ignore. The earlier you start thinking about it, the more security you can give yourself in later life. For young people especially, the benefits of a pension plan aren’t always explained to them when they start that first job or apprenticeship. It might even seem like a waste of money to put aside a significant portion of a pay cheque for some unknown time in the future. When we’re young, we all think we’ll be millionaires or marry rich, but that future is near, and we shouldn’t put off thinking about it.
We encourage our clients to frame the future as if it’s today. The easiest way to do this is to look at your retirement as being a certain number of pay cheques away. So, if you’re 35 and looking to retire by 55, you have 240 monthly paydays until that date. How far can you stretch those pay cheques? What can you put aside? And what’s a realistic lifestyle you want to uphold when you retire? You need to make sure that you’re visualising that future with every financial decision you make in the present, whether it’s basic budgeting or long-term investments.
Find out what the experts think
In our Wealth Lens Video Podcast series, we explore a range of topics related to Financial Planning, Pensions & Retirement, Savings & Investing, Mortgages and more. Our team of knowledgeable experts, highlight their past experiences and give valuable advise concerning those, who wish to know more about the complex nature of the financial world.
If you are curious about the financial planning process, our Podcast series is a good place to start understanding the basics. There you will learn more about some delicate details of the process and receive some helpful insights, that could be applicable to your specific situation.
FOR MORE DETAILS, LISTEN TO our LATEST Wealth Lens Video Podcast:
Ask for help – from an expert
To get the best out of life, you need experts taking the helm – or at least giving you advise – at the right moments. Yet when it comes to finances, people don’t always realise how much a wealth management expert can transform their entire approach and help them build a future they’d only dream about. A lot of people did not receive any financial education and can even be afraid to ask for help when they need it. If you’re in charge of your family’s finances or are responsible for supporting a household, you might feel shame if at any point you start struggling. Especially for men, it can be seen as a weakness – and yet you wouldn’t think twice about calling a plumber to fix a leak or a dentist for toothache.
We recommend speaking to an expert.
We’ve helped clients who’d previously thought they were in poor financial positions see how just the slightest adjustment can help them achieve things they’d never imagined and enable them to live life on their terms, have life their way.
Need help? Our financial advisers can help you with just that and more. Contact us today to get started.
*Capital at risk.Your home may be repossessed if you do not keep up with repayments.