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October 23, 2019

My life on a chart: a client’s view of cashflow modelling

A client’s view of cashflow modelling

I’ve just had a life-changing experience.

I didn’t go swimming with crocodiles in Australia, or bungee jump off a cliff in New Zealand and I didn’t trek the Himalayas.

I went to see my financial advisers, Sutherland Independent, up the road from me in Edinburgh.

I know what you’re thinking: that doesn’t sound very life changing! Well I can explain.

I’ve never been to see a financial adviser before, but I’d been meaning to for a while. Like many people, it’s one of those things I’d been putting off, but it had been nagging away at me for a long time.

The main reason I wanted to see an adviser was to get my pension (or lack of it) sorted out

I’ve been self-employed for over two years and haven’t been contributing during that time. I was worried about the impact that might have on my future (I’m a sprightly 43) and what drastic measures I might need to take to remedy it. In fact, I didn’t know anything much about what I’d already saved.

I knew that I’d had some good employer contributions from most of my previous jobs, and that I’d been adding to these, but I didn’t know how much this amounted to, and whether that was a good number for my life stage and career.

As the questions mounted, I became more and more reluctant to have them answered – in case it was bad news. But I knew that facing it head-on would eventually make me feel much better.

And it did. But feeling better about my pension was just a tiny piece of the puzzle…

Financial planning, not financial advice

A client’s view of cashflow modelling

I was introduced to Sutherland’s approach to financial advice, which is actually financial planning. This differs in terms of financial advice in that it doesn’t focus on products, it focuses on the person – the products come second.

My adviser explained that our first meeting would concentrate on me and where I want to be in life. They’d find out what really mattered in order to create a vision and strategy for my financial future. Only after that would we discuss the money part.

This sounded great – I love talking about myself, who doesn’t? But it sounded more akin to therapy and I wondered if I’d need the tissues that I’d spotted in the corner of the room (apparently I might).

Fortunately, I got to answer the questions in advance of the meeting – and there was a lot to think about. They started gently by asking me to think about how I’d live life if I was completely financially secure?

This sounds like a liberating question, the ‘What would you do if you won the Lottery?’ idea, but it’s actually quite hard to make your imagination run wild when you’re so used to thinking in terms of not being able to afford to doing things. But I soon got into it.

The other questions were harder and were about making me think about the things I really wanted to do in order to whittle down the list until I had a shortlist. This was a great way to think more consciously about all those things that are on ‘that would be nice’ list and consider which are in fact the most important ones. But it was more about how to bring those things forward, into the present. Afterall, if they’re that important, why wasn’t I doing something about them now?

The meeting itself was split into two parts

In initially we discussed the answers to my questions in depth and my adviser challenged me to think about ways I could bring my lifelong ambition to write a book into the here and now. The second part of the meeting brought everything together. And this is where I saw my financial life unfold on the big screen.

My adviser had taken the information I’d given about my current finances – income, expenditure, pensions and Isas – and entered it into a piece of software called Cashflow Modelling. He combined it with the answers to the three questions above so that together my money was arranged in a way that enabled me to live the life I really wanted to live.

It was quite magical.

He’d had developed an achievable savings strategy that would enable me to live life comfortably well into old age. I could see how much money I’d have throughout my life, I could see when I could retire and how much I’d have to live on, I could also see how this would be impacted if I saved more (or less) or if something unexpected happened (good or bad). And I could also see that I’d have a financial cushion in a ‘worst case scenario’.

I’d never thought about using my money in this way before and suddenly I could feel the options opening up in front of me. It made my money seem more real. It linked it with a purpose, and that purpose was to live a life I wanted to live, rather a life that just ‘happened’. This made me feel much more in touch with my future, more informed and in control. And also more excited about where I was now going.

That’s why it was so moving.

So if anyone’s unsure about where they’re heading in life or wondering what their money is doing, or what it’s all for, I would advise going to see someone like Sutherland Independent. It will enable you to explore what you really want to do, and find out how you can do it. You’ll see your life unfold in front of you – from now until 100, which is a very comforting feeling. And how often can you say you’ve seen that?

 

October 23, 2019