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BRANCH 23 – Tax Efficient Investment In Belgium

By Emeka Ajogbe - Topics: Belgium, Branch 23 investments, Investments, wealth management
This article is published on: 11th February 2019

11.02.19

While you are living in Belgium, you have a number of valuable investment options available to you. If you wish to maximise tax efficiency, Branch 21 or Branch 23 products are very attractive. These are life insurance products widely used in Belgium for saving and investment. While Branch 21 can provide security through guaranteed returns, Branch 23 offers access to a wide range of assets which can provide you with excellent long-term capital growth.

Branch 21 vs Branch 23
Branch 21 products provide the investor with a guaranteed return (at the time of writing, between 0.1% and 1%), with a possible bonus. However, the bonus is not guaranteed and is dependent on the insurer’s terms and conditions. This solution is popular as a pension strategy, but crucially the effect of inflation should always be taken into account when calculating the real rate of return.

By taking out a Branch 21 policy, you qualify for tax relief, which can mean a tax saving of up to 30% on the amounts invested. Currently you can invest up to €980 per year and receive tax relief on it. You can invest more, up to €2,350 per year, in the long-term savings system.

A Branch 21 policy can have a fixed term of, say, ten years, or it can be open-ended. An open-ended policy ends when the policy is surrendered, or on the death of the life assured. You are also able to take out additional guarantees, such as death or disability cover. Note that as this is a life insurance policy, there is a 2% tax on premiums unless it is a pension savings insurance policy.

If Branch 21 is the no-frills option, then its sibling, Branch 23, is the all singing, all dancing alternative that offers broader investment scope and the prospect of higher returns (with of course the increased risk that comes with foregoing a guaranteed yield). A Branch 23 policy can invest in a wide range of assets including:

1. International, multi-asset mutual funds
2. Discretionarily managed portfolios
3. Active or passive investments

Importantly, there is no maximum investment in a Branch 23 product, and for larger amounts you can also access personalised, discretionary investment management.

Returns will vary, depending on market conditions, your attitude to risk and the length of time you remain invested. With the help of a financial professional, you have the opportunity to design a portfolio to suit your personal circumstances, maximising potential returns whilst managing and understanding the principles of investment risk and reward.

The time horizon is key here ie. how long before you envisage needing access to your money. You should not be investing in a portfolio like this unless you have a time horizon of at least 5 years.

Tax efficient investment
As mentioned previously, these solutions are very tax efficient. A 2% tax is payable on premiums if it is not a pension savings insurance policy, but in addition to up to 30% tax relief enjoyed by Branch 21 investors, you will not have to pay withholding tax (based on a notional return of 4.75%) if you leave your funds invested for at least eight years. If you did not received a tax benefit on the premiums, then there is no tax to pay on the money that has accumulated.

With Branch 23, you still pay 2% on your premiums (like Branch 21), but you do not pay a withholding tax on your investments unless it has additional performance guarantees (for example, from structured products). In that case, the withholding tax will then be calculated on the actual return and not a notional 4.75%.

Other than that, there is no tax to pay on the final amount, or on any withdrawals.

Furthermore, these products can also be very useful when it comes to estate planning, since the beneficiary and the life assured do not necessarily have to be the same person. Let’s walk through an example: a parent wishes to gift a substantial amount of money to their child. The child can be designated as the beneficiary of the policy and the parent as the life assured. At the time of the parent’s death, no inheritance tax is due if the parent passes away at least three years after gifting the sum of money to the child (the beneficiary). This is a straightforward and reliable way of ensuring that your wealth is passed on to the people you care most about, without them having to pay inheritance tax on the bequest.

Additional benefits
On top of tax efficiency, estate planning opportunities and the freedom to invest in a wide range of international, multi-asset funds, if you have existing investments these can also be transferred into your Branch 23 policy, with flexible access when you need it.

Investment Categories

By Pauline Bowden - Topics: Investment Risk, Investments, spain, wealth management
This article is published on: 3rd March 2018

03.03.18

The risk scale, i.e. volatility of return, for general investment categories sorts investments from 1, least risk, to 8, highest risk.

  1. Bank Account
  2. Cash or Money Market Funds
  3. Debt Investments: Bonds and Bond Funds
  4. Common Stocks and Shares (Equities) and Equity Funds
  5. Real Estate
  6. Collectibles and Commodities ( stamps, art, gold, diamonds, oil etc)
  7. Options
  8. Futures

Categories 1 and 2 usually have returns that are near to the rate of inflation. In other words, not a good return on your investment in the long term, though they are low risk.

Category 3 usually has better returns than 1 and 2 and in most cases Bonds provide a fairly safe investment. However, there is a wide range of risk within this category; from Junk Bonds with very high risk to Treasury Bonds with lowest risk.

Category 4 is where most investment is based. In general, mixed, managed, well balanced stock markets funds are safer than individual stocks because of diversification and professional management. The professional management allows the investor to concentrate more on family, job etc. instead of having to spend large amounts of time managing a portfolio of individual stocks.

Category 5, real estate, is a very localised investment fraught with more “negatives” than most people realise and not easy to sell at short notice i.e. illiquid. However, it can be – if bought, managed and sold correctly – a great source of wealth.

Categories 6, 7 and 8 should only be considered by experts in the relative fields. The risk is too high for investors without specialist knowledge.

Before making any investment decisions, be sure of your personal risk rating, diversify your portfolio and get advice from a Licensed Independent Financial Adviser. Call Pauline Bowden on 616 743 108 or email Pauline.bowden@spectrum-ifa.com for a free, personal, confidential consultation.

Cash Is Not King….

By Chris Webb - Topics: Interest rates, Madrid, spain, wealth management
This article is published on: 23rd February 2018

23.02.18

I think that it is fair to say that the global economy has been ill for some time! Central banks throughout the developed world have tried to cure the illness in the form of ultra-low interest rates and other extraordinary measures, aimed at stimulating economic growth.

The outcome is that it has ‘dethroned cash from its former place as king’
For all of us today, wealth preservation is key to the decisions that we make regarding the investment of our financial assets. This is even more important if you are approaching retirement and no longer have the possibility of increasing your wealth by saving from disposable income.

For risk-averse investors, the traditional way of saving has usually been bank deposits, feeling this is the safest and most secure way. Understandably, when you could get a decent rate of interest – especially if index-linked – then this was often sufficient for their needs. However, today, this is no longer a viable solution, particularly if the investor needs to supplement their pension income from their investment income. Even for those who do not need to take the income from their capital, the real value of their capital is not being protected in the low-interest rate environment that we are experiencing.

I am not saying that cash is entirely bad, only that the role of cash has changed and it can no longer be depended on to provide income or protect the real value of capital
I am finding more and more that negative investor sentiment, during the last year or so, has led to a situation whereby many investors are holding too much cash, i.e. in excess of what can be considered as prudent, given the very low level of interest rates. Keeping too much cash – beyond what someone may need to meet short-term capital and emergency needs – can be disastrous for savers. The decline in income generated by deposit accounts and some other ‘perceived safe-haven’ fixed interest investments have all but completely dried up. The decline is not imaginary or hypothetical and the lost income means less money to meet the household needs. Combined with a stronger Euro, which we are also currently experiencing, this can make it more difficult for the expatriate to meet their income needs.

So how do we avoid the ‘cash trap’?
The simple answer is to invest part of your financial assets in investments that are delivering a real rate of return (i.e. after allowing for inflation).Naturally, this means taking some risk, but there are different types of risk. What is clear is that investing in cash for the long-term is not a risk-free strategy.

Cash no longer delivers a ‘risk free rate’ but instead creates a ‘rate free risk’
Hence, finding the appropriate risk strategy will depend entirely upon the investor’s individual circumstances. If you need to take income from your capital, since bank deposit returns no longer meet your requirements, you need to cast a wider net than was historically needed. This will result in a move up, not down, the risk spectrum.

For the year to the end of December 2012, Headline CPI (Consumer Price Index) in the Eurozone was 2.2%, despite the fact that the European Central Bank target is to be below 2%.With cash only earning say 0.5%, this is a negative real rate of return of -1.70%. By comparison, the FTSE 100 dividend yield was 3.7% in 2012; emerging market debt and high yield debt yielded 4.5% and 6.7%, respectively, compared to UK gilts yielding 1.8%.

Looking over a longer period, the annualised change in the dividend yield of companies included in the ‘MSCI Europe ex UK Index’, over the period from December 1999 to 2012, was 4.1%. Dividends have generated constant income over decades for investors, as well as long-term capital growth.

This can be seen in the table below, which shows the proportion of the average annualised return made on the S&P 500 Index since the 1920’s that has come from dividends and capital appreciation.

 Period Dividends % Capital Appreciation % Total %
 1926-29 4.7  13.9  18.6
 1930’s 5.4 -5.3 0.1
 1940’s 6.0 3.0 9.0
 1950’s 5.1 13.6 18.7
 1960’s 3.3 4.4 7.7
 1970’s 4.2 1.6 5.8
1980’s 4.4 12.6 17.0
1990’s 2.5 15.3 17.8
2000’s 1.8 -2.7 -1.9
2010 – 2012 2.1 8.5 10.6
1926 – 2012 4.1 5.6 9.7

So despite any short-term volatility in stock markets, which may result in a short-term reduction in the value of the capital, income can still be delivered in the form of dividends.If income is not needed and instead the dividends are re-invested, the compounding effect will increase the amount of capital growth.

For example, the FTSE 100 actually resulted in a negative return of -15% during the period from December 1999 to 2012, based on the index prices. However, where the dividends were re-invested, this resulted in a positive return of 32% over the same period. Clearly, it is not a good idea to ‘put all eggs in one basket’. Therefore, it is very important to have a diversified portfolio of investments that is structured to meet the objectives of the individual investor. Avoiding the ‘cash trap’ is an essential part of that process.

If you would like more information about investing or saving on a tax-efficient basis for Spain (whether for investing an amount of capital and/or saving on a regular basis), or any other aspect of retirement and inheritance planning, please contact me by telephone on + 34 639 118185 or by e-mail at chris.webb@spectrum-ifa.com to discuss your situation, in confidence.

The above outline is provided for information purposes only and does not constitute advice or a recommendation from The Spectrum IFA Group to take any particular action on the subject of investment of financial assets or to mitigate the effects of Spanish taxes.The Spectrum IFA Group advisers do not charge any fees for their time or for advice given, as can be seen from our Client Charter

Is lending money to a government still low risk?

By Peter Brooke - Topics: Bonds, France, Investment Risk, Investments, wealth management
This article is published on: 26th July 2017

26.07.17

If you buy a government bond, sometimes called GILTS (UK), BUNDS (Germany) or T-Bills (US), as an investment, then you are effectively lending that government money. Most portfolio managers say investors should have some bond exposure in their investment portfolios as they diversify away from other assets like shares.

How do Bonds work?
You start by buying a bond on ‘issue’ for a set issue price with a ‘promise’ to pay you back the same amount in a date in the future. In the meantime, the bond pays you a ‘coupon’ or interest in payment for you lending your money. The bonds are also traded on a ‘secondary bond market’ where the price fluctuates according to supply and demand but the coupon remains the same… this means that your interest rate changes depending on what price you pay for the bond.

You can also invest in ‘funds’ of government bonds which are managed by professional managers using new issue and secondary market bonds around the world to build a diversified portfolio… but are they as low risk as they are made out to be?

Traditionally these forms of investment have always been viewed as low risk, as governments, unlike companies or individuals can always ‘print money’ and so can always pay you back. This also means that the interest rate you receive (the coupon) will be lower than company bonds.

If we consider that RISK is the chance of loss then I would argue that these investments are no longer low risk. Right now, we are in an environment where interest rates are at all-time lows around the world, inflation is starting to bite and so the chance of an interest rate increase by central banks is high; even though the rate increases may be low.

If you are holding any bond and interest rates go up, then bond values will drop, therefore I would argue that at some point you are risking a capital loss by holding government bonds. Some analysts believe that a 1% increase in interest rates could lead to a 10% capital loss on most bonds. If this is the case are you now being compensated for this risk of loss? Well, no… interest rates on government bonds are around 1% now and so with inflation higher than 1% in most countries you are losing money on an annual basis too.

So, what can you do about it? The first option is to take a little more risk and swap your government bonds for high quality corporate bonds… the coupon will be greater and as long as the companies are in good health then they should be able to repay you at the end of the term… there are also funds of corporate bonds which diversify risk.

The corporate bond market is segmented by credit rating so be aware of the level of risk this can bring to your savings… “high yield” (Europe) or “junk bonds” (US) tend to behave more like shares.

Another option would be to diversify away from western government bonds into emerging market government bond funds… there is some extra currency risk, though this can help performance too. Finally, you can outsource the choice of the bonds you buy by using a Strategic Bond fund… this will invest in corporate, government and emerging markets bonds on a strategic basis and would be very diversified.

This article is for information only and should not be considered as advice.

THE MILLIONAIRES CLUB

By Pauline Bowden - Topics: Costa del Sol, Investment Risk, Investments, spain, wealth management
This article is published on: 24th July 2017

24.07.17

Most of us can’t join the Millionaires Club…..or can we?

So what do Millionaires do with their money? They mostly use private banking and private investment companies to manage their wealth. These institutions are usually a closed shop for the majority of investors. The private banks often want a minimum of £500,000 just to open an account!
Most of the top 100 US investment managers would expect $5,000,000 from a private investor! This same manager’s expertise can be accessed via a life assurance bond for as little as £20,000!
The Private Investment Companies are set up by very wealthy families who are willing to pay experts to manage their fortunes.
These wealthy families are guided by a philosophy of continuity. Successive generations of the family have invented investment structures to preserve and grow their wealth.

So why should we mere mortals be interested?
A few of these Private Investment Companies have opened their doors to the public, via financial institutional structures such as portfolio bonds or Life Assurance investment bonds.

This specialist investment expertise, previously denied to the likes of you and I are now allowing investments from as little as £50,000.
That may still sound like a lot of money, yet long term savings or endowment plans, the sale of a property or your tax free lump sum payable on retirement can easily exceed this amount and needs to be “preserved and grow” just like the millionaires money.

There are, of course, many tax efficient, financial instruments and structures available to suit all levels of wealth. Designed and suited to each person’s individual requirements and future financial needs.

To take advantage of this unique opportunity or to discuss this or any other financial matters, contact me for a confidential review of your personal situation.

Investments for the Cautious

By Pauline Bowden - Topics: Costa del Sol, Investment Risk, spain, wealth management
This article is published on: 28th June 2017

28.06.17

One of the largest, most well respected, financially sound Insurance/Investment companies in the UK has an investment product compliant for residents of Spain and Gibraltar.

With 25 million customers worldwide and over 309 Billion Pounds under management, clients can feel more comfortable in the knowledge that thier assets are being well cared for by a long established, successful management team.

So what is different about this Investment Bond?
It has very low risk, with gradual steady growth, giving 3.4%+ annualised net return (after annual management charges) and up to 101.5% allocation of premium to larger investors.

For the long term cautious investor wishing to mitigate against the effects of inflation and wanting up to 5% per annum penalty free income, this could well be the perfect solution. This Life Assurance Investment Bond can be accessed from as little as €30,000, 20,000 Pounds or $30,000 and has a very competitive charging structure.

As part of an overall portfolio of assets – for the cautious part of that portfolio – it would be worth a look.

If you would like more information about this product or to make an appointment to discuss your personal needs and aspirations for your capital, please contact me for a free confidential review of your financial situation.

Investing in turbulent times – presentation, Costa del Sol

By Spectrum IFA - Topics: Costa del Sol, Events, Investment Risk, Investments, spain, Spectrum-IFA Group, wealth management
This article is published on: 15th June 2017

15.06.17

The Spectrum IFA Group and Tilney Investment Management co-sponsored an excellent presentation and lunch on 13th June at the exclusive Finca Cortesin Hotel & Spa on the Costa del Sol. The Spectrum IFA Group was represented by our local adviser, Charles Hutchinson, assisted by his wife Rhona and Jonathan Goodman who attended along with Richard Brown, Lewis Cohen and Harriette Collings from Tilney.

For this event, around 25 attendees were invited and selected for this exclusive venue. They were given a very interesting interactive talk by Richard and Lewis on investing in these turbulent times, followed by a mingling lunch and refreshments in the Moroccan Room where everyone was able to personally discuss their questions with staff from both companies in a glorious and relaxing setting with gardens and fountains close by. The feedback from the attendees has been most impressive.

Spectrum was very proud to be involved with Tilney in this superb event. It is hoped this will be repeated again in the future.

Financial Advice Spain
Financial Advice Spain

Smoothing out the bumps of market volatility

By Sue Regan - Topics: Assurance Vie, France, Interest rates, Investment Risk, Investments, wealth management
This article is published on: 9th June 2017

09.06.17

In today’s environment of very low interest rates, is it wise to leave more than “your rainy day fund” sitting in the bank, probably earning way less in interest than the current rate of inflation, particularly after the taxman has had his cut…..?

In the above scenario, the real value of your capital is reducing, due to the depreciating effect on your capital of inflation. So, if you are relying on your capital to grow sufficiently to help fund your retirement or meet a specific financial goal, then you should be looking for an alternative home for your cash that will, at the very least, keep pace with inflation and thus protect the real value of your capital.

In order to achieve a better return than a cash deposit, by necessity, there is a need to take some risk. The big question is – how much risk should be taken? In reality, this can only be decided as part of a detailed discussion with the investor, which takes into account their time horizon for investment, their requirement for income and/or capital growth, as well as how comfortable they feel about short-term volatility over the period of investment.

Although inevitable, and perhaps arguably a necessity for successful investment management, it is often the volatility of an investment portfolio that can cause some people the most discomfort. Volatility often creates anxiety particularly for investors who need a regular income from their portfolio, and for this reason some people would choose to leave capital in the bank, depreciating in value, rather than have the worry of market volatility. However, this is very unlikely to meet your needs.

There is an alternative, which is to have a well-diversified investment portfolio that provides a smoothed return by ironing out the peaks and troughs of the short-term market volatility. Many of our clients find that this is a very attractive proposition.

What is a smoothed fund?

A smoothed fund aims to grow your money over the medium to long term, whilst protecting you from the short-term ups and downs of investment markets.

There are a number of funds available with differing risk profiles, to suit all investors. The funds are invested in very diversified multi-asset portfolios made up of international shares, property, fixed interest and other investments.

The smoothed funds are available in different of currencies, including Sterling, Euro and USD. Thus, if exchanging from Sterling to Euros at this time is a concern for you, an investment can be made initially in Sterling and then exchanged to Euros when you are more comfortable with the exchange rate. All of this is done within the investment and so does not create any French tax issues for you.

As a client of the Spectrum IFA Group, this type of fund can be invested within a French compliant international life assurance bond and thus is eligible for the same very attractive personal tax benefits associated with Assurance Vie, as well as French inheritance tax mitigation.

Stop Press!!! Since writing this article the UK Election has taken place resulting in a hung parliament that brings with it more political uncertainty, but also the possibility of a softer Brexit or even a second election. This makes for a testing time for investment managers and the option of a smoothed investment ever more attractive.

Why robots will never replace Investment Advice

By Chris Burke - Topics: Barcelona, Investment Risk, Investments, spain, wealth management
This article is published on: 7th June 2017

07.06.17

Particularly when markets are/have done well like recently, Stock picking (A situation in which an analyst or investor uses a systematic form of analysis to conclude that a particular stock will make a good investment and, therefore, should be added to his or her portfolio) is somewhat discredited these days, because low-cost passive fund managers argue that their tracker model delivers better value to savers by betting on an index, not individual companies.

And there is good argument to back it up

An article in The Wall Street Journal shows that between 1926 and 2015, just 30 different shares accounted for a remarkable one-third of the cumulative wealth generated by the whole market — from a total of 25,782 companies listed during that period. These statistics demonstrate that “superstocks” are what produce the true profits in the long run.

The research also calls into question the cult of equity, which has been followed by professional investors for more than 50 years. The experts argue that shares decisively outperform bonds and cash over time. But Bessembinder’s research shows that the returns from 96% of American shares would have been matched by fixed-interest instruments, which generally offer more security and liquidity, and suffer from lower volatility than stocks.

Spotting a business that can grow 10 or 20-fold over a period of years is a rare art

Of course, getting stock selection right is very difficult indeed when such a tiny proportion of shares contribute so much to total performance. It requires investors who are truly patient and at times extremely brave.

Amazon is one of the heavy hitters that delivered a quarter of all wealth creation in the stock market during the 90 years to 2015. Yet between 1999 and 2001, the online retailer’s shares fell by 95%. Many investors probably gave up then, and having been burnt once, shunned its 650-fold appreciation over the past 16 years.

While empirically that may appear to be correct, intuitively it feels questionable

Economies grow thanks to new technologies and entrepreneurs, who run a fairly small number of outstanding companies funded through private capital. Half the top 20 wealth creators referred to above are in sectors such as pharmaceuticals and computers. Identifying those sorts of promising industries is not too hard. But I do not believe there is a computer program — or robotic system — that can pinpoint the great achievers of the next 10 or 20 years.

Choosing the special businesses and executives that will create enormous value, and probably large numbers of jobs, is as much a creative undertaking as a scientific one.

Rigorous analysis must include a host of variables that artificial intelligence would struggle to understand — adaptability, trust, motivation, ruthlessness and so forth. I suspect all the best investors emphasise the importance of judging management when backing companies; I am not confident that computers can do that better than humans. In mature economies such as the UK, such sustained compound growth happens all too rarely.

To achieve it, a business should enjoy high returns on capital, strong cash generation, plentiful long-term expansion opportunities and a powerful franchise. And you need to buy the company at a sensible valuation. In a world awash with cash, such attractive businesses command very high prices. But if you believe the model can endure, they might be worth it.

Article written by Luke Johnson, who is chairman of Risk Capital Partners and the Institute of Cancer Research.
Sources: Bessembinder’s research and The Wall Street Journal

To read the article in full, click here:
Why a robot will never pick the superstocks of the tomorrow

Keeping On Track

By Chris Webb - Topics: Estate Planning, Financial Planning, Madrid, Pensions, Retirement, Saving, wealth management
This article is published on: 5th May 2017

05.05.17

Speaking with my many clients one of the most talked about topics is “I wish I had done something sooner” or “I wish I had put a plan in place”.

All too often in our younger years we race through the nitty-gritty details of our finances and neglect to focus on crucial “future proofing” in the process. In our 20’s we tend to spend, spend, spend. In our 30’s we try to save, but starting a family or purchasing property make it difficult. In our 40’s we’re still suffering the hangover from our 30’s and inevitably the work required to provide for your financial future becomes increasingly harder.

But if you adopt a marathon approach to money (opposed to a sprint – see my article on this topic), it can allow you to take a more holistic look at your overall financial picture and see how decisions that you make in your 20s and 30s can impact your 40s, 50s and into your retirement years.

It doesn’t matter how old you are, being financially healthy boils down to two things. The level of debt you have and the level of savings/investments you have. The only real difference is how you approach both subjects, as this will change with age .

Tips in your 20’s

1. Debt – Loans And Cards
It’s easy to think that making the minimal payments and delaying paying them off, to save more, is a good idea, but this strategy rarely works. The more you make the more you tend to spend, so getting round to clearing off these debts never comes any closer. As you go through the 20’s cycle, additional costs will start being considered, like starting a family or purchasing a house therefore the ability to clear your debts just doesn’t materialise.
This is why now is the time to work on breaking the credit card debt or loan cycle for good.

2. Start An Emergency Fund
While you’re busy paying down your debt, don’t forget that you should always be planning on having a “savings buffer” in the bank. To help accomplish this goal you should transfer funds straight from your “day to day” account into a deposit account. One where your aren’t likely to get access through an ATM which reduces the temptation to spend it on a whim. Ideally, you should aim to have three times your take-home pay saved up in your emergency fund.

3. Contemplate Your Future – Retirement

At this point in your life, retirement is far off, but it can be important to start saving as early as you can. Even small amounts can make a big difference over time, thanks to the effect of compound interest. Start saving a small percentage of your salary now to reap the rewards later in life. See my articles on compound interest and retirement planning to see the difference it can make.

Tips in your 30’s

During this decade, your financial goals are likely to get a bit more complicated. Some people will still be paying off credit card debt and loans, whilst still working on the “emergency account”. So what’s the secret to juggling it all? Rather than focusing on one goal you should be looking at the biggest of your goals, even if there are three or four.

1. Continue Reducing Debt
If you’re still paying down your credit card balances then considering consolidating onto one card with an attractive interest free period should be your first task. Failing that you need to concentrate on the card with the highest interest rate and reduce the balance ASAP. The most important thing to consider with debt is the interest rate, If you have low interest rates (I’d be surprised) then there’s no major rush to pay them off, as you could manage the repayments and contribute to other financial goals at the same time. If your interest rates are quite high then the priority is to clear these debts down.

2. Planning For Kids
Little ones may also be entering the picture, or becoming a frequent conversation. Once this is a part of your life you’ll start thinking about the cost implications as well. Setting aside a small amount of funds now to cater for the ever increasing costs of bringing up a child will reduce the financial stress later down the line. If you have grand plans for them to attend university, potentially in another country, then knowing these costs and planning for these costs should be part of your overall financial planning.

3. Assess Your Insurance
The thing that most people forget. Big life events such as getting married, having kids, buying a house are all trigger points for reassessing what insurance you have in place and more crucially what insurance you should have in place. If you have dependents, having sufficient Life cover is paramount. Other considerations should be disability, critical illness and even income protection.

4. Start that Retirement Plan
It’s time to stop just thinking about setting up what you call a Pension Pot, it’s time to take action. Starting now makes it an achievable goal, leaving it on the back burner because you’re still too young to think about retiring is going to come back and haunt you later in life.

Tips in your 40’s

This is the decade where you need to make sure you’re on top of your money. At this point in your life, the ideal scenario would be to have cleared any debts and to have a nice healthy emergency fund sitting in a deposit account.

1. Retirement Savings – Priority
During your 40s it’s critical to understand how much you should be saving for retirement and to analyse what you may already have in place to cater for this. In my opinion it’s now that you need to start putting your financial future/ retirement ahead of any other financial goals or “needs”.

2. Focus Your Investments
Although you may not have paid much attention to “wealth management” in your 30s, you’ve probably started accumulating some wealth by your 40s. Evaluate this wealth and ensure there is a purpose or goal behind the investments you have done. Each goal will have a different time horizon and potentially you will have a different risk tolerance on each goal. The further away the goal is the more you can afford to take a “riskier” option.

3. Enjoy Your Wealth
It’s about getting the balance right. Hopefully you’ve worked hard and things are stable from a financial point of view. You need to remember to enjoy life today as well as planning on the future. As long as important financial goals are being met there is no harm is splashing out on that dream holiday, and enjoying it whilst you can.

Tips in your 50’s

You may find yourself being pulled in different directions with your money. Do the children still require financial support, do your parents require more support than before ?, The key thing to remember is to put your financial security first, and yes I know that sounds a bit tough…….. You still have your retirement to consider and probably a mortgage that you’d like to clear down before retirement age.

1. Revisit Your Savings and Investing Goals
Your 50’s are prime time to fully prepare for retirement, whether it’s five years away or fifteen. At this point you should be working as hard as possible to ensure you reach your required amount. This means that careful management of your assets is even more critical now. It’s time to focus on changing from a growth portfolio to a combined growth, income and more importantly a preservation portfolio. What I’m saying here is it’s time to really analyse the level of risk within your asset basket.

2. Prioritise – Your Future V Kid’s Future ( It’s a tough one….)
During their 50’s a lot of clients struggle with figuring out how much they can afford to keep supporting a grown child, especially when they’re out there earning themselves. The bottom line is that although it can be tough you have to continue to put yourself. first. The day of retirement is only getting closer and unless your planning has been disciplined there’s a possibility you may need to work longer than anticipated, or accept less in your pocket than you hoped for.
You are number 1…….

3. Retirement Decisions and considerations
You should begin to revisit your estate planning, your last will and testament, power of attorney if you feel necessary and confirm that your beneficiaries on any insurance policies or investment accounts are all valid.
Once you’ve covered off the administration part then I’d suggest you sit back and look forward to the biggest holiday off your life……..have a great time !!!