A new year is always a great time to get started on new endeavours or reinvigorate your passion for old ones. If you don’t already have a personal lifestyle financial plan in place, it’s the perfect time to get started.
This does not constitute advice and advice should be sought in all instances before acting on it.
Building a plan will help you understand exactly what you’re trying to achieve and how to get there. It puts your ‘retirement magic number’ into perspective and lays out the steps you need to take.
Investing will undoubtedly play a large role in your plan as it is such an effective way to grow your wealth. Here are a few things to take into consideration when mapping out your financial plan this year.
What are your liquidity needs?
Knowing what your liquidity needs are – i.e. how much cash you need ready access to – is important so you can fund expenditures and cover any liabilities for the short-term future, usually two to five years.
For this purpose, investments should be held in stable assets with low volatility and be easily accessible, such as cash savings or a high-quality bond ladder. If you don’t have a plan for easily accessible money, then you might be forced to sell other assets at discount prices.
By working out your liquidity needs for the foreseeable future you’ll better be able to plan and provide a cushion between your cash needs and unpredictable market returns.
Providing for future generations
On the other end of the spectrum, you’ll need to consider your long-term investments, including any inheritance you want to pass on to your loved ones.
There are different ways to approach legacy planning. You could go more aggressive than your short-term plan dictates as you have a much longer lead time to achieve the desired results and have the space to make up for any bumps in the road. This is generally the strategy people employ and it greatly benefits the family that you hope to pass down your assets to. It can also benefit wider society as often people also leave money to philanthropic organisations.
Confidently build an investment plan
The advisers at Dental and Medical Financial Services provide guidance so you can confidently build an investment plan as part of your larger financial plan. We’ll help you navigate each step of the process, review your entire financial position routinely, and recommend any changes in strategy as necessary. Get in touch with us today.
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Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.