Financial Planning truths – and what cute puppies can teach us

We are all suffering from various degrees of shell shock now that the ‘New Reality’ has sunk in a bit. We’ve come to realise that nothing about it is, or will be, ‘normal’ again. You will be forgiven for feeling alone in this. It is easy to shut down and scroll Facebook endlessly, alternating between doom scrolling and searching for pictures of cute puppies.

In this article I want to talk about some of the enduring truths, or universal principles, in terms of financial planning that still apply and always will. YES, life is tough, but if there is one thing that my 35+ years in the financial services sector has taught me it is that nothing stays the same – good and more predictable times will return. At some time in your life, you will face challenges again. The truth, though, is that you can plan for it to a higher degree than you might think, and by doing so, you will thrive again.

The truth about dogs

The education gurus tell us that the best way to understand and retain information is by linking it to something familiar. In the pandemic, many people realised how important pets are. They have been our constant, loyal and sometimes maddeningly positive companions. They bring comfort and joy and peace to a household.

In the title, I promised you puppies – they are, after all, (hu)man’s best friend. Let us look at financial planning and how your Financial Advisor can be your Best Friend in a time of need.

Being a Very Good Boy

As a Financial Planner, I am not exactly a Fluffy Fido! Whilst my job is to provide you with peace of mind about your financial future and those of your loved ones, should you fall away, I will ALSO help you understand what that means and how you can achieve the best outcomes.

I believe each one of my clients have a different set of circumstances, priorities and challenges. I do not judge. I do believe that my clients should be empowered to make the best decisions for them. I also often succeed in brokering peace between clients, their spouses, or children when it comes to making decisions about their finances as a family and provide a neutral party to mediate when emotions get fired up!

Being a Very Bad Boy

Pets can also be the destructive forces that lead you down the path of endless DIY projects and redecorating the lounge! We are often surprised and confused about what urged our animals to chew on the Persian carpet, when there are a hundred ‘dog-appropriate’ chew toys available.

Sometimes, when I listen to the feedback from new clients about previous service providers, I am reminded that if your goals are not in line with that of your financial advisor, you can find your savings being chewed up and you may feel confused and frustrated at the lack of communication and inscrutable financial decisions and gobbledygook that some advisors are fond of using to explain their actions.

Life is about choices – pets, partners and financial advisors

Consider your lifestyle, your aspirations, and your budget. If you are particular about your fashion sense, a mutt that loves mud puddles and enthusiastically jumps up on you will ruin your look. If you are a couch potato who only wants a dog to watch Netflix with you, a grey hound won’t be the best option. If you have a tight budget, a Husky will eat you out of house and home.

Make sure you know why you want a financial service provider by your side, what you want out of your relationship, and that it is affordable. This means taking both a short-term and a longer-term view.

Don’t make permanent decisions for temporary situations. The SPCA bemoans the fact that many people adopted animals whilst working from home during COVID-19 – and often to amuse bored kids who weren’t in school. They found that they had to return them once they returned to work.

Whenever you engage with a new commission-based service provider, you may find that they will try to sell you a new product to replace a perfectly good one. They do this because they do not earn money when servicing a policy that they did not sell you. They will upsell the ‘new and improved’ benefits and downplay the penalties and administrative fees you will have to pay. You may find yourself being charmed into buying products you don’t need and will be locked into a contract, which means you will pay penalties, should you later change your mind.

Careful about choosing immediate gratification over the longer-term consequences. Dipping into your savings or taking on more debt to cover daily obligations, or buying things on impulse, can lead to a heavy debt burden that can haunt you for many years. Unlike a rescue dog, you can’t give your debt back.

Surprise! Jack turned out to be Jacqueline. You may think you, and your dog, are young now so there may not be immediate health risks, but your youth may make you more vulnerable to unexpected babies/puppies or accidents. This is equally true of teenagers that think they can drive and puppies that aren’t used to electronic gates.

Having adequate emergency funds should be built into your financial plan. This can form part of growing your wealth, if managed correctly. A savings account is often not enough to counter inflation, your changing needs, and the rising cost of living. Off-the-shelf products may be insufficient, and your medical aid and insurance may not always cover everything.

Final words from someone who has been around for a long time (who has many pets)

Dogs may not understand the world, much. But they do know who they can trust. It pays to listens to those who know more than you and who will ‘Sit!’ ‘Stay!’ And ‘Wait!’ by your side through the hard times and the good ones. My experience as a Financial Advisor has taught me quite a few things about the world and how this can affect your bottom line. I invite you to take the long walk to financial freedom with me.

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