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changing the way you think about 
Home_Sweet_HomeThe British have a unique and deeply neurotic relationship with property, houses especially, places we call home. We are a nation of homeowners. When house prices are rising we feel good. We feel successful. Even if our incomes do not quite meet our expectations, we comfort ourselves with the thought that we've always got 'the house' to fall back on.
 
Enabled by the massive expansion of funding from the banks and building societies in the eighties and nineties, millions of us have played snakes and ladders with the property market. For many of us it has been a saviour – rising prices have allowed us to move up the ladder and create wealth for ourselves and our children.
 
Consider these facts:
 
  • The average asking price of a home in England and Wales has broken the £300,000* barrier for the first time.
  • This means that house prices have increased by 50 per cent in a decade, far outstripping the 22 per cent rise in average wage growth over the same period.
  • The average asking price for first-time buyers rose 9.6 per cent to £185,612 in England and Wales
  • Research by Emoov showed that owning a house near a Waitrose store increases the value by an average of 6 per cent.
 
Those of us that got on the ladder twenty or more years ago buying a family home near good schools (and ideally a branch of Waitrose) and paid off our mortgage every month are sitting on a very tidy profit. We feel safe. Many of us consider it to be our best investment ever – far better than those pesky unit trusts and shares that keep going up and down. Provided we have the foresight  to 'downsize' at the right time (before we get too old to manage it) we have won the property game.
 
For the rest of us the picture is not so rosy. For many baby boomers who bought property in the early 2000s using a self-certifying mortgage (the lender didn't need proof of income) on an interest only basis (no repayment of the capital) the story is not so good. Many will have dipped into negative equity during the recession, waiting with bated breath for a rise in house prices to do its magic. Now they find themselves with a huge mortgage and the price rise has come, but not enough to enable them to downsize comfortably. They are stuck.
 
Not enough equity in their current property is compounded by the fact that, in their sixties, their earning capacity has diminished and they are unlikely to get a mortgage. And they are tired. What was a challenge in our forties becomes a trial in our sixties. We have to call on reserves of willpower and determination. We have to accept our mistakes and find a way forward. One thing is certain: in our sixties there is no room for error. The next move needs to be the right one.
 
If you find yourself in this situation and are not sure what to do next...
 
Perhaps spend an hour with Nicholas at his expense to discover if financial planning can be helpful. Drop him a line at nlee@demontfort.biz or call 07725 784348. More information at www.financiallifeplans.co.uk
 
* Index compiled by Rightmove from the asking prices of properties coming on the market from 13,000 estate agency branches listed on its website.
Being a child of the fifties I pretty much missed the 'Summer of Love'. I was twelve at the time (1967) and 'free love' was a vague (although appealing) concept to me. Reading that question right now I am embarrassed, I'd prefer not to get into that question. Let me re-phrase that: I'm not going to get into that discussion.Money_Talk
 
Turns out I am in the minority. Research conducted by University College London with 15,000 men and women found them SEVEN more times likely to discuss whether or not they'd had an affair (I'm cringing) than discuss their income. Three per cent refused to answer intimate questions (that would be me) whereas twenty per cent refused to reveal their salary.
 
We really don't like talking about money. Actually I knew that already. My working life is spent patiently (mostly!) inviting people, couples mostly, to talk about money. Rationally if possible, but talking at least. Speaking from around thirty years’ experience of doing this I can report that the hard bits are: 1) getting people into a room for the conversation and 2) inviting them to say how they feel about their relationship with money and how it impacts on their lives. The rest, all that 'advice' stuff that the regulators bang on about, is a doddle by comparison.

We really don't like talking about money and it's costing us our lives. In case you're wondering if I am overdoing this, here are some bald facts:
 
  • 40 per cent of baby boomers (me again) have not even started to make any personal savings towards their pension
 
  • The average size of private pension pots (excluding final salary schemes) in the UK is £15,000. That's the price of an average new car, never mind a Lamborghini...
 
  • People who set a plan and take advice increase their retirement income by an average of 53 per cent.
 
And from my experience the youngsters (thirties and forties) are not doing much better. Overwhelmed by credit card debt and the struggle of bringing up young children with both partners working, the last thing on their minds is making provision for the future. The future is the end of the week. (Take a look at past blog 'On The Edge') 
 
I believe our way forward is to have a conversation with a qualified financial planner. What I don't understand is why most of us won't be doing that. Is it fear about the cost? Shame at what a mess we've made of things so far? Apathy? Fear that we've left it too late?
 
If any of this resonates with you I'm here to help.
 
If you would like to spend an hour with Nicholas at his expense to discover how financial 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

When was the last time you sat down and methodically went through your finances? Do you know what you are worth? What you owe? How much tax you pay? Do you know how much your pension is worth? Do you have a pension? When did you last check how much life assurance you own? If you were ill how would you pay your bills? Have you made a will?

If the answer to any of those questions was a slightly sheepish 'No.' Don't worry, don't beat yourself up, you're in good company... but DO something! Take action!

Gather your information together and go and speak to a financial planner – somebody who is qualified to help you get a grip on your financial situation and provide you with objective and independent guidance. There is tremendous value in simply making an audit of where you are financially speaking. Nobody will do this for you. Here comes a terrible truth: nobody else cares if you're still paying your mortgage off in your sixties or doing night shifts at B&Q in your seventies in a desperate attempt to eke out a state pension. Each of us must take responsibility for our financial future.

And most of us don't. We pay the bills (mostly), we rely on credit cards to see us through and we buy things we don't need because we 'deserve it'. And this isn't confined to a small section of our society, this is most of us. We work hard, we do our best and we want the best for our children – the best education, the best opportunities and we'll do whatever it takes to get it for them. So if that means moving to a 'better area' for schools we'll take on a huge mortgage and work hard to pay for it.

Many of us are too tired to take control of our finances, we simply keep going and hope for the best. Many of us are relying on an inheritance at some indeterminate future date to put everything right. Some of us admit that to ourselves and some of us don't. And most of us haven't realised that an inheritance can be decimated by care fees - £30,000 pa for an ordinary care home can soon make a pile of cash look, well, a much smaller pile of cash.

This paints a bleak picture. There has to be a better way. There is. It's called financial planning. Working with a good financial planner will help you to take control of your finances, establish clear priorities and install the disciplines needed to work methodically towards achieving them. Boring but true. And gradually as time passes we begin to get ahead of the curve – we're ready for life's challenges. We've got some money in an emergency fund to pay for the unexpected expense. We've paid our mortgage off as quickly as possible and we're now investing the payments into an education plan for our children or topping up a pension. We have no outstanding debt. And, all being well, we know when we can expect to reach that magic moment – financial independence.

Do you know how many people are on target to achieve the retirement they want? Eight per cent! That should be eighty per cent! But it isn't. Come on we can do better than this....

If you would like to spend an hour with Nicholas at his expense to discover how financial 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



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.
Most people don't, alas. Where_do_you_want_to_go

There are three big life changes when people usually think about speaking to a financial professional:

1. When they need a mortgage to buy a house
2. When they retire or take benefits from a pension
3. When they inherit some money.

The rest of the time we steer clear of financial advisers. It's tempting to believe that this is primarily because people don't trust financial advisers. To be fair our image is down there with estate agents and journalists... That said I believe that many people avoid talking to a financial adviser because they don't want to talk about the mistakes they have made. This is very understandable and, after all, denial is a good strategy... for a while. But it gets you in the end.

“Most people have been taught how to work for money, they have not been taught how money works.” - Tom Barrett, Dare to Dream and Work to Win

I believe that financial planning is for everyone, not just so called 'rich people'. Everyone from college students to young professionals, young families, business owners and 'retired' people can all benefit from having a proactive, positive relationship with money and the guidance of a trusted advisor.

A good financial planner will help you to avoid making daft decisions (we've all done it!). As Carl Richards describes it in his book, The One-Page Financial Plan, a good advisor will stand between you and The Big Mistake.

He will also help you to 'behave'.. for a very long time. Behaving means doing all the things we know we should do: budgeting properly, paying down debt, saving every month, not buying stuff without thinking and so on. Getting this right for a long time means we end up achieving our financial goals and acquiring the freedom and ease around money that seems to elude so many of us.

And it all starts with a conversation... ideally with a financial life planner, someone who will take the time to understand you, what you want, and where you want to be, so that together you can create a plan that works for you.

Regards,
Nicholas.

You know all those daft things we do with money, all those seemingly innocent peccadillos that if left unchecked spell big trouble sometime down the line. All that money we spend satisfying our little wants (often describing them to ourselves as 'needs'): clothes, phones, coffees, pampering (I deserve it!), not to mention our spectacular lack of interest in saving, planning and budgeting. Well it's okay folks because it's not our fault. We were born that way!


Dr Stephen Siegel of the University of Washington writes in the Journal of Political Economy: “Each individual is borne with a genetic predisposition to a specific savings behaviour, an effect that is found not to disappear later in life.”
 

The evidence is compelling. Dr Siegel examined data from Sweden on 30,000 identical and fraternal twins. Using information from their tax returns he worked out how much they saved. Twins with identical DNA were found to share twice as much of their tendency to save (or not) as fraternal twins born from separate eggs.


How can this fascinating information help us? Well for those of us born with a spending genetic pre-disposition this is not a license to spend without compunction. That always ends in tears... believe me, I've seen it too many times. It means that we have to adopt some sensible strategies. One simple strategy is to automate our savings with standing orders and to spread it between short and longer term investments. To ensure we have an adequate emergency fund so that we're not taken by surprise when something inevitably goes wrong. Some of us may need to be a little more drastic and cut up our credit cards.
 

For most of us we need an 'outside' influence to help combat our natural tendency to spend. Someone who will hold our feet to the fire when it's needed, someone to whom we can be accountable for our behaviour. This can be a spouse or a friend as well as financial planner. We all need people around us whom we trust and who understand our weaknesses without being judgmental.
 

And for the savers, and you know who you are, keep up the good work and help your less fortunate friends. You were born to do this work.


Regards, 

Nicholas.




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

I just wanted to say thank you very much for watching my Baby Boomers series. I hope very much that you found it to be helpful in organising your thoughts about the sort of things you should be doing (or we should be doing!) now that we are in our sixties and seventies.

If you recall, we covered the five main areas of this age: the financial consequences of death, the financial consequences of dementia, debt, the importance of having a discussion between yourselves so that you know what’s going on with your finances, and we talked about downsizing, which I think is a very important part of everybody’s financial planning if you happen to own a house.

By definition all I can do is talk about this stuff in a very sort of simple way on a video.  If you have some more detailed questions or if you would like to have a conversation with me, then please do get in touch

To watch any of the videos again, you can click the titles below: 

Episode 1: Death
Episode 2: Dementia
Episode 3: Discussion
Episode 4: Downsizing
Episode 5: Debt

Thanks for watching,

Regards,

Nicholas.
 
Sara Cutting was 47 when she was diagnosed with cancer. To raise £10,000 for Macmillan cancer support she has published a photograph of herself on Twitter every day since her diagnosis in October 2014 wearing something outrageous on her bald head. Head gear has included a vintage radio, a teapot, purple orchids donated by celebrity hatter Philip Treacy and a fascinator donated by her Mum. Cutting regularly exhorts her thousands of followers to, “now go check your tits.” (You can follow Sara - @fizzysnood)

There will be 2.5 million people living with cancer in UK in 2015 according to Macmillan Cancer Support. The majority of these people will survive five years. Most of these people will face significant financial hardship . Some will lose their homes and their businesses, many will never recover their financial equilibrium.

According to Robert Watkins of Macmillan, four in five (83%) of cancer patients are hit with an average cost of £570 per month as a result of their illness – comparable to a mortgage payment. Additionally one in three (33%) are losing an average of £860 per month in earnings because they are unable to work or have to cut down their hours.

Everyone of those 2.5 million people would benefit from having appropriate insurance to draw on in their hour of need. There is no doubt that financial worries contribute to the appalling stress and trauma that a cancer diagnosis brings. One patient says:

“I had everything ripped away from me. I lost my business, I lost my home – all because of my cancer diagnosis. I didn’t know what I was going to do. I spent sleepless nights alone worrying about where the money was going to come from for basic living. It was very scary.”

The hardest part of this is that there is very little a financial planner can do to protect people who have already been diagnosed with cancer, other than help them to minimise the damage to their finances. It is only those who are not yet affected who can truly protect themselves from these consequences.

But we don’t want to think about it... do we?

I’m pretty sure everyone of those 2.5 million people wish they had.

Protection from the financial consequence of serious illness and disability should always be the foundation of a financial plan. It’s so easy to arrange now, so difficult to find when it’s too late.

Regards,

Nicholas.
 



Can't watch the video today? Why not read the transcript below:


Welcome to the penultimate video of The Baby Boomer Series; today we’re discussing debt.

Let’s get straight down to the bottom line - debt does not die with you.

Many of us have been through a tough period during the recession. Those of us in our late 50s are still working, and some of us following a redundancy because of the recession, have started our own small business. We may have re-mortgaged the house to put more money into the business. If so It is very important for you to understand that it is a debt, and if you were to die unexpectedly you would leave that debt to your dependents, principally your spouse or partner. I have heard people say, “Well it wouldn't be a problem. He / she could just sell the house and move on.”

Is that really what you want your spouse to have to do in those circumstances?

It really is worth thinking that through and seeing what you can do to plan appropriately. The most obvious thing of course is to remove the debt as quickly as possible, but this is always a little bit harder to do and takes time. It may be appropriate to think about life insurance to ensure that, in the event of your unexpected death, the debt is repaid.

This episode really has the same message that runs throughout the whole Baby Boomer Series, which is talk to each other - talk to your family, talk to your business partners and work out what’s going to be the best way for all of you.  

Regards,

Nicholas.

Welcome to the fourth video in the Baby Boomer Series – this week we’ll be looking at the issue of downsizing your home.

Downsizing a large family home is becoming a very popular option for releasing capital and reducing living expenses. Many Baby Boomers find themselves owning a huge home thanks to the housing boom of the last thirty years. By huge I refer to the amount of space it takes up and the money it takes to run it. My suggestion is that you talk to your family about downsizing and whether it's right for you and your loved ones.

Let’s think about this: suppose you have a house that’s worth £300,000. If you need some capital released from the  house, now is the time to do it, while you’re vigorous and able to make decisions. If you wait until you are in your seventies it won’t be as easy and will become a much bigger hurdle. Once the hurdle becomes too big, the option of equity release begins to look attractive.

In my opinion, equity release is not the best solution: interest rates are much higher on equity release mortgages (because they are fixed) and the interest charged rolls up over the years. A £25,000 loan can easily become £100,000 over twenty years. If you downsize earlier, you have the opportunity to take the money out of the house, invest it and use it provide income. You also have the option of making gifts to children and grandchildren to help with education costs or providing a deposit to get them onto the property ladder themselves. Or if you prefer you can use the 'SKI'(Spend the Kids' Inheritance!) plan. At least it’s being used for someone’s benefit rather than to a mortgage company.

So what is your action point from today? I suggest that you sit down with the family and have a conversation about downsizing. If you’re hesitant to talk to the family, then start by talking with your other half. The two of you can discuss how you feel about the prospect of downsizing, and how you could go about it cleverly.

And never forget.. your financial planner is always available to help you do just that – make plans that help you to get what you want!

Regards,

Nicholas.

Welcome to the third video in my series for Baby Boomers.



Cant watch the video today - why not need the transcript below?
 
This time we are lightening the mood just a little bit and talk about talking!
 
Most couples find financial planning is helpful in getting them to talk to each other about their finances. People tend to need prompting to do this!
 
With most couples there is a tendency for one person to take responsibility for the money.  Although there is nothing the matter with this, what tends to happen is that the other person ends up not knowing anything.  Inevitably somebody, usually the person who is responsible for it all, dies, and the other individual is left just not knowing what on earth is going on.  This is a recipe for disaster!
 
So how do we fix this? Very easily!
 
Start by making a list of everything - assets, income, bank accounts etc.  Sit down together around the kitchen table and talk! Do this once every six months or so. Talk about what you are spending money on, talk about your assets, the income that you are getting, simply have a conversation. This may sound incredibly simple but you would be amazed how the vast majority of us just don’t do that. 
 
If you feel that you can’t, whether you can’t get yourself around to it, it just doesn’t seem to work or the conversation is not as productive as you would like then maybe talking to a financial planner would be helpful to you. 
 
So please, when it comes to your finances, Baby Boomers please talk to each other!

Regards,

Nicholas.

Welcome to the second video of the Baby Boomer Series - Today we are looking at the subject of dementia.





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


Although dementia is a topic we would all probably prefer not think about or address, unfortunately it is a huge reality of old age

The purpose of this video is simply to give you some information about the financial consequences of dementia. 

If someone close to you, your family, your spouse, is unable to look after their own financial affairs it can create chaos. It may not be possible to access a bank account or do something as simple as renewing a car insurance policy. You cannot make decisions on a person’s behalf unless you have a Power of Attorney.  The point of course is that a Power of Attorney is a legal document which enables whoever you appoint to act on your behalf if you are unable to do so yourself.

My mother is now 90 years old and unfortunately is unable to do anything for herself since suffering a stroke. Luckily, we had arranged and put in place a Power of Attorney many years ago when she was much younger and able to make those kinds of decisions.  It has meant my brother and I have been able to deal with her financial affairs, her house and car, paying her bills – relatively easily.

The emotional impact of dealing with someone close to you who is suffering from dementia is huge. It's a relief not to have to worry about the money side of things. Although my Mother’s situation was slightly different in that she had a stroke rather than suffering dementia, I have been very grateful for that power of attorney.

If you don’t currently have a Power of Attorney, may I suggest that you take a few minutes to please research them. If you’re not really sure where to start or to look, send me an email and I can give you some more information.

Regards,

Nicholas.

Welcome to Episode 1 of my Baby Boomer series.



Not able to watch the video today? Why not read the transcript below instead:
 
We are going to be starting right at the end by looking at ‘Death’.  Essentially, this is a subject that I talk a great deal about with clients because it is a key to the way in which we plan our finances.
 
Benjamin Franklin said “The only thing that’s certain in life is death and taxes” and of course, to an extent, he is right! 
 
Death is an emotional subject - I have my own experiences around this and all I can offer you is just some very simple basic ideas on what you should be thinking about around death.
 
Remember, by looking at this subject you are setting things up for your dependants, for your spouse and for your children and I’m sure you’ll agree, there can be nothing more important than that!
 
So what are the issues that we need to consider? Clearly you need a Will, as well as needing to think about (quite carefully!) whom you would appoint as Executors. If you have assets in excess of £500k (and most of us have these days the way in which house prices have increased) then you need to be thinking about a Trust. You’ll need to give some thought to protecting your assets from potential nursing care costs in the future. And if you have grandchildren, you might want to think about making gifts to them and therefore hopping over a generation.
 
There really is quite a lot to think about, and some important decisions to be made!
 
The real issue is getting our heads around this difficult subject; the worst thing you can actually do is bury your head in the sand and not directly deal with it.
 
Just think, none of us have go to this Baby Boomer age without having experienced death in our own lives.  Think of the effect and the emotions around your experiences and think of how you want so much to help your children and your dependents at that very difficult time. 

So, let’s have the conversations now, let's take the actions we need to take now, ideally with the guidance of a caring financial planning practitioner. Then we can get on and  enjoy the 'best years of our lives' with the peace of mind of knowing we've done the right thing.

Regards,

Nicholas.
Happy New Year and welcome to the first video of the Baby Boomers series!

In this series of video blogs we will be talking about some of the important issues that, as Baby Boomers, we need to be addressing – it’s going to be a kind of mental spring clean!




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

As baby boomers in our early sixties we’ve reached the point where we have accumulated some money and now, hopefully, have some time to do some of the things we want to do. This series of videos is about prompting you to attend to the 'housekeeping' issues that we'd all prefer to avoid.

These are:
  • The financial consequences of death
  • The potential effects of dementia.
  • The effect of debt on your estate.
  • The importance of talking about these issues rationally and constructively.
  • When and how to downsize your home.
Each video will provide some information designed to prompt you to begin sorting out these difficult issues and, if you feel it is appropriate, seek the advice of a good financial planner.

Talking to one of my clients the other day she explained to me that she was very worried about her ageing parents. One of them is suffering from dementia and there are issues around care and money and what is best. Now well into their eighties and having not made any plans or provision for this situation, they are finding it difficult to cope, and my client understandably feels responsible for them.

As I listened  to her I realised how very important it is that we, as baby boomers in our sixties, make plans for whatever situation we may face in twenty years time. We owe this to ourselves and to our children.

So, let’s have the conversations now, let's take the actions we need to take now, ideally with the guidance of a caring financial planning practitioner. Then we can get on and  enjoy the 'best years of our lives' with the peace of mind of knowing we've done the right thing.

Regards,

Nicholas.