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changing the way you think about 
Eighteen years ago today, on April 9th , my father died. My brother Simon, my mother and myself stood at his bedside in Intensive Care as his breathing faded. I remember the moment clearly.
 
I have talked about my father's death before and how it has helped me to understand why my work as a financial planner matters so much. Earlier today walking down a street on paving slabs made shiny by April showers, I remember he used to make concrete slabs at a yard in Walsall. This is a man in his late fifties with a heart condition who spent his working days lifting concrete slabs on and off a truck. On and off. Over and over.
 
I have a black and white photograph of him on my office wall standing in his yard. Looking straight into the camera, a benign stare as he waits for me, a photography student, to take the picture. It is one of my treasured possessions.  He was always working. Even when he was not at work, he was digging the garden, replacing the engine in my Mum's Mini or building a gazebo. He never stopped.
 
Talking to a friend about this she told me how lucky she felt to have parents who taught her how to work. She complained bitterly as a teenager that she was always expected to help out in the family business at week-ends, while her friends were off playing. Now in her early forties she is grateful to her parents for teaching her the habit of working. It has served her well helping her to be fearless and competent as she starts her own business, whilst being a Mum and running a home. Work provides her with financial security and satisfaction from doing a job well.
 
My Dad has inculcated that work habit into me and I too am grateful. Other than the fact that my children are no longer children I could not have predicted any of the things that have happened to me over the last eighteen years. The real benefit of financial planning is about planning for an unknown and uncertain future. As John Lennon sang, “Life is what happens when you're busy making other plans.”
 
The paradox is that without a plan we are tossed hither and thither with no sense of direction, no insight and no goal to strive towards. It's the striving that makes it all worthwhile. My Dad never recognised the moment to stop striving, he never had a plan to arrive. I see men and women striving upwards and onwards with no plan. It can  only end in exhaustion and disappointment. This three minute video tells my Dad's story.
 
Have you a plan for your future? Do you know when to stop striving? How do you know if you've arrived at your goal?
 
If you would like to spend an hour with Nicholas at his expense to discover how financial life planning may be able to help you, drop him a line at nlee@demontfort.biz or call 07725 784348

I_want_thatEveryone knows that money can't buy you happiness... right? Obvious! The evidence is overwhelming – lottery winners who end up in a dreadful mess despite their millions, successful businessmen and women with divorces and strained relationships despite their wealth and success... the list goes on.
 
In my experience the opposite is also true. Lack of money is equally debilitating – too much month at the end of the money, rising credit card debt, a mortgage that never seems to diminish. This leads to a corrosive sense of hopelessness which looks and feels very much like despair. Most of us have had an experience of this at some time in our lives – and none of us want to go back there.
 
Where is the balance? This is a personal challenge for all of us because there is no 'one size fits all' answer... Here are some thoughts in no particular order.
 
  • First thing is to accept the importance of money in our lives – and not ignore it, avoid it or somehow imagine it will take care of itself. It won't – trust me. Getting a grip on your finances takes time and effort.
 
  • Second, we need to acknowledge that we live in a consumerist society. There is a whole industry dedicated to creating desire and they know how to do it very well. To imagine that we are somehow immune to their clever, subliminal blandishments is naïve. We all believe that a Rolex watch, a BMW motorcar or a detached house defines our success. Just pick your example – it may not be watches or cars or houses for you…but I bet it's something that somehow enhances your sense of self. It might be qualifications conferring status. Be honest with yourself...
 
  • Third, we need to ask ourselves the right kind of questions. What makes us happy? When do we feel most at ease and relaxed? Answering these questions honestly requires courage – we have all been subjected to conditioning, so don't take your first answer as the best one. Think of a time when you felt happy – where were you, who were you with, what were you doing? These answers will give you valuable clues about to what really matters to you.
 
  • Fourth, start thinking about how you might do some more of that. Ignore the rational excuses for now – haven't got time, need to pay off the mortgage first etc. etc. Allow yourself to dream just enough to begin to sense what freedom might feel like. This is the beginning of thinking for ourselves and creating our world, not one that has been sold to us by advertisers.
 
Most of us won't do this. It's challenging and time consuming and, in my experience, we need help to get started and maintain momentum. I have two suggestions: Read 'Your Money or your Life' by Vicki Robin & Joe Dominguez (http://goo.gl/m3g9iM) and follow the 9 Steps. This will help you to understand the single most important concept in personal financial planning: our most valuable resource is time, not money. Once we understand and act on that truth the way forward becomes much clearer. And find a financial planner you can trust and work with them. We all need guidance with this, very few of us manage it alone.
 
If you would like to spend an hour with Nicholas at his expense to discover how financial life planning may be able to help you, drop him a line at nlee@demontfort.biz or call 07725 784348. More information at www.financiallifeplans.co.uk
Toby sits in the first floor window sill of our bedroom staring intently at the birds, mostly squawking gulls, across the street. Occasionally he will whimper and his tail will bang up and down in, what I imagine, is a
mixture of frustration and anticipation. He’s wanting...  and wishing. 
cat_for_blog
The gulls fly past the window. Nothing in Toby’s head connects with the impossibility of his wanting and certainly not the ludicrous nature of this endeavour. He just carries on wanting like the cat that he is, driven by some ancient instinctive part of his brain over which he has no control.

Sound familiar? Idle wanting. We all do it. One of my clients said he wants an Aston Martin. No real reason. He probably likes the shape, the shininess, the cost, maybe has some fantasy hidden deep in his psyche about being James Bond. Now he owns a very nice Jaguar and he’s quite happy. He no longer wants an Aston. It was just idle wanting.

Most of us have done this at some point in our lives. Thoughtless and greedy we want more and more...
How many of us have ‘stuff’ in our houses that we never use – books, gadgets, clothes – purchases driven by idle wanting? Surely it’s harmless... No it isn’t! Aside from the sheer waste of our money the real cost to us is the unreal nature of our wanting. We turn fanciful wanting into ‘stuff’ piling up around us simply because of the power of a credit card. This undermines the respect we must have for our money if we are ever to make any progress towards financial freedom.  We are literally frittering our lives away on idle wanting. (Have a look at my previous blog http://www.financiallifeplans.co.uk/2015/03/17/how-much-of-my-life-will-this-cost for more on this).

The financial life planning process helps us to see what we’re doing and to move forward by defining our real needs and our life purpose. This takes patience, effort, persistence and clarity of thought. It is the precise opposite of idle. And most of us won’t do it.

We’ll sit on the window sill wanting and wishing and feeling frustrated, driven by forces over which we believe we have no control.

What about you?

My first day as a 'financial adviser' was June 28th 1982, over thirty-three years ago. The eighties were the 'glory days' for financial services – on the back of her Falklands victory Margaret Thatcher was leading a Tory government committed to entrepreneurial endeavour. Making money was good – and there was plenty of that in the City of the eighties with a Stock Market boom (at least until the fateful crash of October 1987), deregulation of the Banks and everyone a shareholder with the privatisation of BT, British Gas and others. Margaret Thatcher sold the family silver and saved the nation or so we were told. 

Gordon Gekko the protagonist of the film 'Wall Street' played by Michael Douglas as a voracious trader who believed that 'greed is good' defined the zeitgeist of the era. As did Tom Wolfe's brilliant satire of the whole self indulgent quagmire in  'Bonfire of the Vanities'. 

Me? I just plodded on quietly talking to people about savings and financial protection and inviting them to make sensible decisions, rather than not. As my career progressed and my family grew I began to experience the benefits of a good income. No champagne and swimming pools but a sense of making progress, paying our bills and putting some aside. The excesses of the City were remote and faintly distasteful to me insofar as I ever thought about it.

Imagine my delight then when I read a report recently about a new movement 'Earning to Give' which encourages young people to go into the most lucrative careers their skills allow, in order to give the money to specially chosen charities which are vetted for effectiveness. This is not idle posturing – so far 200 people have signed up to 80,000 Hours, a not for profit organisation founded in Oxford in 2011. The name refers to the length of the average career. 

There are some wonderful examples of modern day philanthropy. Sacha Romanovitch is the new chief executive of accountancy firm Grant Thornton. She has limited her own wage and implemented a scheme to apportion the firm's profits amongst staff. This could boost salaries by 25 per cent. It's happening elsewhere too: Dan Price, boss of Seattle company Gravity Payments, introduced a new minimum wage of $70,000 for staff and reduced his own $1m salary by 90 per cent to the same amount.

And it's not just the youngsters. Two of the wealthiest men in the world, Warren Buffet and Bill Gates, have signed the “Giving Pledge” agreeing to give away more than half their fortunes before they die. Our own Richard Branson is a fully paid up member of this exclusive Billionaire's Club. 

A new mantra then to replace Gekko's ghastly 'Greed is Good'. 

'Giving is Good'. 

Now that sounds more like it...I could sign up to that. 

What about you?

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.


Do you want more money?We_Buy_-_We_Value
Daft question.
We immediately say yes, without thinking.
Of course.
 
If we are asked what we want to do with this money we'll probably say: go on holiday, buy a newer/ bigger car, build a conservatory, get some clothes. Tick the one that applies to you or add your own.
 
Our perspective then is to look out into the world and want more. More money to get more stuff, to feel safer because the more we have the better off we are. Easy.
 
And yet we have so much.
 
It's a fair assumption if you're reading this that you have probably got some money. You will probably have more than enough to eat as well as access to unlimited supplies of clean water. You will live in a house with lots of stuff in it – computers, TVs, clothes, I could go on...
 
Yet our first response typically to being asked if we want more money is YES! I want more!
 
I'd like to suggest a revolutionary concept. Most of us don't need more. We need to look after what we have and to think about our automatic response – give me more. When Wendy and I moved to a smaller home in 2013, we were both shocked by the amount of stuff we had. It was ridiculous.. books we'd never read, DVDS from way back that we are never going to watch again, clothes we hadn't worn for years and so on and on.
 
In my work with clients we carry out a simple audit of their income and expenditure. It helps us to get clear about exactly where they are. Two things frequently emerge from this endeavour:
 
1)Most people have more income than they 'thought' they had.
2)Aside from the obvious expenditure on mortgage / utilities, most people have no idea what happens to their income. None. It disappears. Gone.
 
So we say we want more.
 
Most of us need to clear out the clutter from our lives and get a real understanding of where our money is going, so that we can decide if that's what we truly want. Only then will we be able to decide if we want more...
 
If you'd like to know more about this go to www.theminimalists.com
 
And if you want to take a long, cool look at your finances and where your money is going, call me on 07725 784 348 or email me at: nicholas@financiallifeplans.co.uk

Regards,

Nicholas.
There it is! A simple financial plan that will never let you down. All each of us has to do is work out on a regular basis how to allocate our money between these three priorities. By doing this we learn to make choices, those sometimes uncomfortable trade-offs between ‘this’ and ‘that’, between ‘now’ and ‘tomorrow’, between the ‘right’ thing and the ‘fun’ thing. Gradually we learn to view our financial lives as a continuum not, as so many of us do, from pay day to pay day.

When do we start?

Right at the beginning of course when we are children. Here is a life-changing observation:

You can’t always get what you want.

For the Stones fans out there, the rest of the line is true too.

In his brilliant new book ‘The Opposite of Spoiled’ Ron Lieber writes:

“We parents are in the adult making business after all, and we should do everything possible to build grown up humans with 15 or 20 years of experience handling money.”

The book deserves to be read by parents who want to learn how to bring up our children to make a better job of handling money, perhaps better than we have ourselves. This is not so much about the nuts and bolts of bank accounts and savings plans, it is more about how to teach our children the art of making conscious choices while living within their means.

I particularly like one of Ron Lieber’s suggestions about allowances. After agreeing an allowance with your child, divide the money equally into three jars. It is important for your child to be able to see the money, so not a piggy bank. Then label each jar SPEND SAVE GIVE and perhaps have some fun decorating each jar.
Effectively this is a first budget because there is money for spending soon, some for people who may need it more than we do and some to keep for when we may need or want something later. As the child gets older they can begin to allocate the money themselves in whatever proportion makes sense to them. It is important that they learn so they should be allowed to spend the money on anything they want.

This system will create a simple structure around which you can have many thoughtful conversations with your child. You will be handing them control over their own money and enabling them to make their own decisions about what they want. And you will be teaching them time-honoured lessons about budgeting and self-control.

As an adult would this training as a child have helped you make a better job of handling your finances?
Me too.

Regards,

Nicholas.
Welcome to the second of my mini video blog series on Myths about Money.

Myth number two is simply “Having fancy stuff makes us wealthy.” 



Not able to watch the video today? Read the Transcripton below:

Even saying it sounds ridiculous!

Nevertheless, many of us (and I am included in this) believe that the more impressive stuff we have, the wealthier we are.

If we stop to think about it, I think we know this is not true.

My Mum had a wonderful saying, she used to say “Oh yes, we know about them – it’s all kippers and curtains”.  What she was saying was look at those people, they live in a big house, it’s all beautifully impressive. On the outside they’ve got fabulous curtains, but in fact they’re having to live on kippers because they haven’t got any money.  Their net worth, their wealth, is extremely low. 

The question is, once we get into this mindset, what do we do about it? 

My thought is that we look at the examples that are open to us: Warren Buffet is worth something in the region of $80 billion, but do you know what salary he takes? Only $100,000 a year. In fact, he lives in an ordinary suburban house, he drives a five year old Ford, he’s just an ordinary guy, but his net worth is huge – and that’s the secret!

So how do we emulate that?  How do we realise that it’s our net worth that really counts for something rather than all the impressive things we have a tendency to surround ourselves with?

Here’s a thought.  What would happen if we actually had to write our net worth on our foreheads? It’s about being a bit more public about the decisions that we make around spending money.

How can we actually create a situation where we are making buying decisions that will help us rather than hurt us?  I think to some extent one of the things that could be helpful here is talking to a financial life planner.  Somebody who can actually say “Let’s look at your situation, let’s find out exactly where you are and let’s help you to make better buying decisions – less stuff and more substance.”

I hope that’s been helpful to you, it would be great to hear from you.  Let me know what you think and if you have an opportunity, do take a look at the references below.

Regards,

Nicholas.

REFERENCES:

http://www.zenhabits.net 

http://www.theminimalists.com/