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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

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.

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.

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.

As part of my Lenten journey this year I spent five days living in a Benedictine Monastery at Worth Abbey.  I have always been drawn to the simplicity of a monastic way of life and this was an opportunity to experience it. The rhythm of the day is determined by ‘offices’ or services beginning with Vigil at 6.20am, progressing through the day with Lauds (Morning Prayer) Midday Prayers, Vespers (Evening Prayer)  and finally Compline (Night Prayer) at 9.00pm.

Breakfast, lunch and supper are eaten in silence.

It occurred to me that the rhythm of the monastic day is a perfect metaphor for our lives. At the dawn of our lives, we emerge reluctantly from the darkness of the womb into the world. And so it is for the monks as they rise before dawn and make their way to church to begin chanting psalms and reciting prayers. As we grow and engage with the world, we find our way and lose our way and find it again. Each of us needs an anchor, a rhythm we can rely on as we are buffeted by the 'slings and arrows of outrageous fortune'.

The patience and commitment of the monks (several have been there for fifty years), their faith and sense of purpose are an example to us of how to build a life. By surrendering to a rhythm they move through their days with discipline, doing what's necessary and remaining steadfast in their purpose.

The monks pay little heed to the distractions of the outside world with its noise and chatter. Yet they remain intimately connected to their community and the care of individuals within it. With patience and charity they build schools, teach children and offer guidance and protection to all who need it. This is surely a metaphor for each of us with a family as we teach and guide our children.

Is not money our means of achieving this? Isn't financial discipline actually about understanding the underlying rhythm of our lives, the importance of providing and saving and caring for others? By committing ourselves to a plan we create a measure of certainty in a changing world and give ourselves the best chance of fulfilling our lives' purpose.

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.
 
Walking down a cobbled street with expensive looking shops on either side I can see a young man sitting on the pavement. There are a few coins in the bowl in front of him. I lean down and drop two coins into the bowl. He looks up. His face is pale, his eyes are dull and there is no expression in his voice as he says, “Thank you.”
 
I walk away. A middle class man living in a 'prosperous' university city. My two coins have... what? Salved my conscience, helped him momentarily? Both perhaps...and they have made me feel okay for a moment because I was able to put those coins in his bowl without worrying. I could afford it. Today.
 
Tomorrow.. who knows?
 
I sit talking to my friend Peter Roper (www.thefamilybusinessman.co.uk). We are drinking expensive cups of coffee in a four star hotel. He tells me he is going home via the supermarket to fill up the boot with food and provisions. He can afford it. It was not always so – there was a time when there was no food in the fridge and no money to buy anything. He was broke, literally. His memory of that time is painful, so much so that he takes nothing for granted today. I too can easily remember a time when I struggled every month to make ends meet, relying on credit card debt to see us through.
 
We both know how near we came to being that young man on the street. How easily that can happen to any of us. Each of us daily negotiates our relationship with money. It grants us survival, status and, if we are lucky, peace of mind. For most of us though we continue the struggle closer than we think to sitting beside that young man on the street.
 
Some Facts
 
  • On average the UK has a 'deadline to the breadline' of 18 days before the money runs out to pay bills in the event of a financial disaster.
 
  • Most 25 -44 year olds have only enough money put by to survive 7 days in the event of a financial disaster.
 
  • 35 per cent of households have no strategy in place for dealing with financial hardship because they have no savings at all.
 
Source: Legal and General's Deadline to the Breadline Report.
 
We are blessed. We are lucky. Or maybe we've just worked hard and pushed ourselves to ensure that we have good jobs and incomes. Whatever our route to this place, isn't now the moment to take the steps to manage our money well, build financial protection around ourselves and those we hold most dear and plan for a future where we can feel safe and secure? Isn't now the moment to look at good financial planning, not simply financial advice but real planning? And isn't now the moment to look for the right financial planner to help you?
 
Because tomorrow ...........?

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 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.