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Not able to watch the video today? Why not read the transcript below:


The fifties are a little close for me as I am barely through them having reached sixty this year. I have a simple observation: we are the 'Sandwich Generation' .

We are slap bang in the middle of our children in their twenties and thirties trying to establish themselves in life with careers and partners. They need our moral support, a listening ear and often our money too if we have any spare. And sometimes even if we don't!

At the other end of life we have a responsibility for our parents many of whom are engaged in a guerrilla war of trying to maintain their independence in the face of failing health. They need varying amounts of support and sometimes that can have a financial implication too. Our role here is to be supportive without being intrusive – a delicate balance sometimes.

For all of us this is a wakeup call. We realise more than ever before that our lives are finite, time for us will not go on forever. We need a plan, we need to know that our finances make sense and we're going to be alright. This becomes especially poignant if we are watching our parents struggling with limited resources. We can see first-hand that this isn't a good place to be. Or perhaps we were quietly hoping for a decent inheritance top put things right for us and we are watching it disappear into the ever increasing cost of care facilities.

Either way we are awake to the importance of planning our finances, perhaps for the first time. Sometimes things are in such a muddle that we daren't look. As regular readers of this blog will know procrastination and avoidance are brilliant tactics. Until they're not! At some point we have to face the music.

For most of us life's path has had its ups and downs. Redundancies, re-mortgages, debts and divorce may have driven a coach and horses through the best laid plans. We find ourselves still paying a mortgage, possibly carrying some credit card debt and with a pension that is less than adequate. For some of us it's more of a muddle than a mess: pension entitlements stretching back thirty years, bits of money in ISAs and deposit accounts, some shares, a personal pension started and then paid up.

If any of this sounds familiar do not despair. It is possible to create clarity and order around your money. It's simply (notice I didn't use the word 'easy') a matter of sitting down, working out what you've got and where you are and where you want to go. For this you will need help, someone to offer guidance and to be a listening ear as you work out what makes sense to you and begin creating peace of mind around your finances.

The great Holly wood star Bette Davis said, “Old age is not for wimps...”

She was right. So turn and face the dragon. You may be surprised by how effective a long, cool look and a little ingenuity can be.


Regards,

NicholasLee

Nicholas.



Unable to watch the video today? Why not read the transcript below:

Our thirties are all about getting the balance right. Very often this is an intense period of our lives. Most of us have made long term decisions: we are in a committed relationship, we have or are intending to have children, we've bought a house and we are building a career or a business. The pace of life is fast, we are constantly busy as we move between child care, work, a social life and even (some of us) hobbies. There's no time to think and plan our finances – what we do is react and cope.Cutting_back_now
 
Where this goes wrong, or perhaps I should be more specific and say where this went wrong for me, is simply that I got the balance wrong. We had two very young children. Parents will know what that means for finances and sleep (!), our expenditure went up as I struggled to maintain our income.  If I could send my 'thirties self'  a message, it would be something like this:
 
1.The Big House Fallacy
 
Don't believe you have to move to a bigger house. You may have two or three children (we had four..)  and have convinced yourself that you need more space, bigger bedrooms, a bigger garden. Consider the possibility that you don't – a well designed extension can often do the job. And believe me your children are not going to hate you because they have smaller bedrooms than some of their friends. They'll find lots of reasons – but that is unlikely to be one of them!
 
I didn't listen to that advice and so we bought the 'big house'.. and from that moment on our finances were dominated by THE HOUSE. It needed new purpose built window frames, a new driveway, repainting and of course it came complete a huge mortgage. It consumed thousands and thousands of pounds and kept my nose to the grindstone for ten years. The ten vital years of my children growing up. I'm not saying I didn't see my children grow up, but I worked very long hours and I was often tired by the time the week-end came round.
 
Our house was very impressive but from a strategic perspective it wasn't really the brightest investment  because we had all our eggs in one basket – the residential property market. There was very little money left over for anything else. For the record we made no money at all over ten years, after deducting the cost of all the improvements. If we had not had the huge outgoing of the house our lives would have been easier, our holidays more frequent, our savings diversified and I would have had that most precious of assets – more time with my family.
 
2.Financial Protection
           
This, more than at an other time in your life, is the moment not to scrimp on life assurance, disability cover and critical illness. If you have been lucky with your health so far then it      will be relatively inexpensive and your thirties and forties are when you and your family     have the biggest financial exposure – mortgage, income, education costs. So please sit down    and make a sensible, rational assessment of what cover you actually need. Not what a      salesman tells you and not a token bit of term cover bought on the internet. Do it properly, ideally with a financial planner who will ask the awkward questions that you prefer not to ask yourself. (Take a look at my previous blog “Things We Don't Want to Talk About").
 
Our thirties are an exciting time, a time of career and personal growth. By thinking things through and getting that balance right we can set the foundations for a secure financial future.
 
If you'd like to talk through how that might work for you, do please get in touch.

Regards,

Nicholas.
 


If you don't want to watch the video today, why not read the transcription below instead?:

It's 2015, I am sixty this year and I thought it would be fun to do a series of short blogs in which I talk to my younger self in the four decades since my twentieth birthday. It's the stuff I would have told myself if I'd had the sense to listen!
 
Thinking back to my twenties I know I made plenty of mistakes which is probably what our twenties are about. The scenario is likely to look something like this: you've been to college and therefore have some debt, especially if you had a Gap Year. You are in your first or second job so have some idea where you are headed at least for the next ten years or so. By the way there are almost certainly a couple of false starts somewhere along the way, even a love affair that went wrong and may have left you feeling sad and possibly with a financial burden that won't go away easily. Welcome to your twenties!
 
You may have a clear idea of where you are going and it will be helpful if you have, but what you won't know is how you're going to get there. And that's okay. There will be many bends in the road.  Your job is to keep going and accept that's the way it is, go with the flow, do your best and learn from your mistakes.Current_Reality_-_Goal
 
Looking back I would give myself three pieces of advice:
 
1.Take money seriously - Don't ignore it (too boring), don't imagine it will turn out okay (it won't). If you don't pay attention and treat money with respect it deserves it will bite you on the bum and cause you problems for years to come.
 
2.Cut up your Credit Cards – seriously. Just do it.
 
If you need anymore convincing on this subject work out for yourself how much an interest rate of 20% on a debt of £2500 will cost you over five years. Go on. Get your calculator out and multiply 2500 by 20% x 5.
 
Yes, it's £2500 paid in nice monthly instalments of £41.66. Forty quid a month doesn't sound too bad does it... it's two and half thousand pounds! And that's only the interest, there's another £41 per month of capital to pay back as well over five years.
 
Please, save yourself the pain, cut up your credit cards! It will go on for years if you don't. And if you are in debt work out a plan to get rid of all debt (other than a mortgage on bricks and mortar) as quickly as you can. If you need help, ask for it.
 
Trust me you won't regret it.
 
3.Make a Budget – this doesn't have to be an elaborate affair, just write down on a piece of paper how much money you spend on basics – food, accommodation, travel - and see how much is left every month. Then decide what you want to spend it on. Easy.
 
Put around 10% of your income into a savings account at the beginning of the month before paying anybody anything. You're not working to keep the utility companies and the credit card companies in business, you're working for you. So start by paying yourself first.
 
We haven't talked about the 8th wonder of the world – compound interest. We'll come to that later.. think of it this way, it's the exact opposite of credit card charges – it rolls up for your benefit and nobody else...
 
If I'd just done these three things in my twenties the next thirty years would have been so much easier.
 
Tell your friends. And if you want to chat this through – call or email – I'm here to help.

Regards,

Nicholas.
In my work as a financial planner I invite people to engage in a simple three part process.
  1. To Create a Budget – so that they know what is coming in, where it is being spent and what, if anything, is left over. This process includes a complete review of their assets, income, expenditure, investments and debts. It allows them to see a financial summary of where they are. They can then begin to determine their financial priorities.
  2. To Protect what they Have – their income, assets and wellbeing – from the financial consequences of premature death or unexpected disability and illness. The information on the financial summary enables us to quantify this accurately.
  3. To Save and Invest – once we have protected where they are we can begin to save for short term goals and invest for their future and long term well being.
Put like that it all seems very simple and logical. For most people it is not, most people feel daunted by taking these steps, confused by financial jargon and unsure where to start. The vast majority of us avoid the issues all together and simply muddle through.

Muddling through definitely works in the short term. The long term reality sadly is unrealistic expectations, disappointment and a sense of regret. Most of us in our thirties and forties struggle with the demands of a growing family, and perform a high wire act between the  income that never seems to keep pace with rising prices and a vague sense that we are not managing things as well as we might. And most of us in our fifties and sixties have a sharp ‘reality check’ at some point and wish we had taken more care of our finances when younger.

With these thoughts in mind I have devised a series of short videos that address the main issues we face in each of the decades between 20 and 60. Watching them won’t put things right for you, but it might motivate you to talk to a financial planner and take control of your finances once and for all.

The videos will be shared over the next few weeks, I do hope you enjoy them. 

Regards,

Nicholas.