You can’t turn back the clock!

13 Nov 2013

By Chris Youssef

"Better three hours too soon than a minute too late."

William Shakespeare

If you're like most people, chances are you will only seek financial advice when there is a specific need in your life. This is often triggered by an event or a change in your circumstances such as receiving a redundancy, an inheritance, going through a separation, deteriorating health or perhaps the realisation that retirement is just around the corner.

But is this really the best time to seek financial advice? Or should you already have a plan in place to provide you with financial security regardless of your circumstances?

Let's look at some of the many reasons why taking a proactive approach to your finances sooner rather than later will put you in a much better position to achieve your lifestyle goals:

Are you on track to achieve the things that are most important to you?

Understanding and writing down your short, medium and long-term goals is an important first step in helping you focus on achieving them. Consider for example, the lure of a holiday or a new car. It's likely you will make changes to your spending habits to allow you to achieve these purchases. Without having these goals in place, you may not necessarily accumulate the necessary funds.

When it comes to more significant expenses such as owning your own home or having enough money to live comfortably in retirement, these goals take time and often decades to achieve. Without starting early enough with the right plan, you may in fact run out of time and never achieve them. Ask yourself - will you be happy to settle for less if the numbers don't stack up for you simply because you left planning too late?

What about your family and loved ones should something happen to you?

Most people like to believe they are bullet proof, subscribing to the adage 'that will never happen to me'. There is nothing wrong with optimism, providing you make adequate provisions for your loved ones should the worst case scenario actually eventuate.

It goes without saying that health is your most important asset; it allows you to care and provide for yourself and your family. If you were unable to work, required full time care or weren't around anymore, would your family be able to maintain the lifestyle you intended for them? Could they afford to keep the family home? Would your children still be able to have the same education?

A person who reactively seeks advice when they experience the death of a spouse, or when they are diagnosed with an illness, can find themselves at a significant financial disadvantage if adequate insurance cover isn't already in place. While we can't prevent disaster, we can certainly protect ourselves and our loved ones by insuring against it.

What position would you be in had you started planning earlier?

Let's suppose you had a strategy in place that allowed you to effectively manage your tax and that you invested the tax savings that you made over a one year period.

Now let's assume you proactively obtained financial planning advice 30 years earlier (perhaps prompted by a similar article you had read). How would the results differ?

You don't have to do the numbers to understand which of the two examples will have the better outcome. This may sound like common sense, but it is amazing how many people do not take advantage of such a relatively straight forward and effective strategy. The difference between these examples might be the reason why you can't afford to retire at age 60, or why you can't achieve your desired lifestyle in retirement.

Unfortunately there is no crystal ball with all the answers. However, taking a proactive approach with your finances and obtaining the right advice earlier rather than later will put you in a better position to achieve the things that are important to you.

Your reason for seeking financial advice doesn't have to be because you have or would like to accumulate millions of dollars. It can simply be to ensure that you can maintain your current or desired lifestyle moving forward, and that your loved ones are provided for in your absence.

Remember, there really are no disadvantages to proactively seeking advice early from a professional financial planner to achieve the things that are important to you. However, the same cannot be said for those who don't.

To learn more about Chris, view his online profile​.

If you are seeking financial advice please contact us on 1300 308 440 or enquire online.

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