So you met with your financial planner and between the two of you, you designed a wonderful financial plan that you believe will see you through for the rest of your life. If that were true then a lot more of us would be able to retire financially independent.
The truth is that the financial plan which you implemented a year ago was just a snap shot of where you were then. Let’s just reflect on some of the happenings or what may have happened over the past twelve months.
- You may have married.
- You may have purchased a new home or car.
- You may have had a child.
- You may have moved or started a new job.
- There have been many changes in tax legislation.
- You may have felt the effects of the recession in your personal and professional lives.
As you can see a lot may have happened over the past twelve months and each of these events will affect your financial plan. The only constant is change and thus one’s financial plan should be reviewed on a regular basis to assess the impact of these changes on one’s plan. Even small changes like a change in the way an investment is taxed can have a material effect on your plan in the long term.
Both you and your financial planner have responsibilities towards making your plan work. Before you meet with your financial planner you should review your budget, reassess your financial goals and reflect on any changes in your life that may affect your plan. Your financial planner should in turn inform you of any legislative changes or economic conditions and advise you on how these may affect your plan.
As Robert Burns so aptly says, “The best laid plans of mice and men often go astray”. Ultimately, you are the captain of your ship. The speed and pleasantness of your journey will be based on the accuracy of your route, making changes to your route when necessary and having good crew (a financial planner) to help you stay en route and keep emotions from distracting you from achieving your end destination.
Colin Long CFP®
Director KZN
*** Consolidated is a national financial planning practice with offices in Cape Town, Johannesburg, Tshwane, Eastern Cape and KwaZulu-Natal. Colin is based in KZN.
