Find Your Money Balance

This article is a really important one and I hope it gives you some food for thought.

Some context first of all.

There are essentially two ‘stages’ when it comes to the financial journey of life.

Your lesson here is essentially the circle of life, minus lions and Elton John…

The first is often termed the ‘accumulation’ phase of wealth. That sounds a bit too stuffy and formal for me so instead let’s label this as the ‘earning and saving’ stage. This often coincides with the years of your life when you’re working and therefore have an ongoing tap of financial resources coming your way (if you’re lucky).

If you’re diligent and recognise that there will come a time when the tap runs dry, then you should be parking some of your current resources today with the intention you’ll rely on them tomorrow.

So far so good right? Pretty much the (boring) common sense you would expect a financial adviser to tell you ✅

But please bear with me.

The other stage is the ‘decumulation’ stage of wealth; the time of life when you no longer have regular income coming into your financial plan and you’re therefore reliant on using the wealth you’ve tucked away to continue to afford you the comfortable and dignified standard life you’ve become accustomed to.

Also as a small aside – for the purposes of this article when I talk about ‘savings’ I’m talking about investing some of your hard-earned wealth in the engine of your financial plan – the stock market. Savings held in cash and investing are very different things and serve very different purposes. I’ve included a link below to a previous episode of my podcast on this one in case you missed it 😊

So where am I going with all this I hear you ask?

The takeaway is that you need to strike the perfect equilibrium throughout life.

You need to find your balance.

What’s the use of saving diligently every month at the cost of denying yourself some fun and enjoyment today?

Life is not a rehearsal and sadly none of us know what’s around the corner.

How would you feel knowing that you’ve scrimped and saved between the ages of 40 – 55 just so that when retirement comes you’ve got a healthy pension to draw upon, to only suffer a health scare two years into retirement?

That’s not a win in my book.

Contrast this with someone who has found their balance throughout life and saved enough for tomorrow but not at the cost of enjoying today.

The two stages of life often present very different challenges and are by no means static and linear. What I mean by this is only you will truly know what you want your tomorrow to look like. Do you anticipate that when you stop working you’ll need more financial resources coming in because you’ll suddenly have a lot more free time on your hands?

Do you anticipate requiring the same amount of income at age 62 as you will at 85? I expect not.

Life is not a straight line and it’s not predictable, which is why aggressively saving for tomorrow is not always the most sensible plan.

I’m sorry to be bleak here but what if tomorrow never comes? Maybe Ronan Keating is onto something?

Now I’m not saying you only live once / blow the pension as you have to plan that tomorrow will come and when it does it’s reasonable to assume you’ll want a good standard of life, void of all money worries and rich in financial freedom to spend what you want with who you want.

But you can’t adopt tunnel vision all your life and focus all your efforts on ‘getting to retirement’.

I’ve found that people who focus intently on a defined future age only move the goalposts when they reach that age. You never quite reach the state of financial contentment.

Many people steer clear of financial advisers like me as they worry they’ll be told some uncomfortable truths and badgered to save more into their pension.

Well what if I told you it’s not just about that.

The most important number you should focus on is not when you want to retire. Nor is it how much you want to have when you retire.

Instead it’s about finding your perfect balance.

i.e – the financial sweet spot that permits you to enjoy the here and now and to also know that you’re doing enough to plan for tomorrow.

When you do this you find an absence of guilt that you’re not doing enough, which then allows you to truly enjoy and savour the moment.


Benjamin Mitchell

Benjamin Mitchell

I’m a chartered financial planner that can help you plan for tomorrow and also live for today.

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